ABSTRACT
Reform of the regional structure of the Chinese economy since the late 1970s is, most broadly interpreted, directed against the highly bureaucratized and over-centralized systems of the command economy. The seeming paradox between too much success of one part of the program and pitfalls encountered by the other is resolved by a key principle of the Chinese political economy, the endemic local particularism and economic localism that delimit the link between periphery and center. Beginning in the late 1970s, the Chinese leadership set out to reform the structures of productive and transactional activities. This chapter explains that probably the most significant dimension of decentralization was a restructuring of fiscal relations. It discusses the organizational changes in commercial activities are not unprecedented in the People's Republic. The chapter describes the zones for regionally based growth that are probably the most far-ranging element in the strategy stressing comparative advantage.
