ABSTRACT
This chapter discusses the different institutional imperatives or fundamental challenges that the top leadership needs to address in an entirely new political and socioeconomic context featuring social media and civic activism. In the 1980s, local governments were granted a certain degree of fiscal autonomy including independent budget expenditure planning and sharing of budget revenues as proposed by the central government. China’s pervasive corruption is closely related to institutional flaws within the Chinese Communist Party (CCP) bureaucracy. The top leadership has realized that to win a full-scale war on corruption, the Party has to rely more on institutional improvements rather than on high-handed campaigns to make the regime more accountable, transparent and responsive. Corruption poses a serious threat to the image and legitimacy of the new leadership under Xi Jinping, who regards preventing the escalation of large-scale corruption as imperative in order to win public support.
