ABSTRACT
The years 1981–1983 saw Shanghai’s first “fiscal slippage” (caizheng huapo), a term that came into official discourse only in the middle 1980s, especially during the second slippage after 1986. Shanghai’s high-tech industries, in which the crucial input was skilled labor, fared better in mid-1980s inflation than did the state’s old tax producers. So the materials crisis ironically forced a new structure in the city’s economy that the bureaucracy did not plan. This reform was unintended. Beijing (e.g., Jiang Zemin as Minister of Electronic Industries) did not favor Shanghai for “silicon” investments. The city’s extraordinary remittances went down by 1987, when the state did less to guarantee factor prices. In the post-Tiananmen 1990s, tax collectors garnered more for the state, reviving fiscal controls at least down to the size of counties. Takeuchi shows that the authoritarian central regime cared more about political threats than about failures of governments to provide public goods, even as the supply of private goods soared. Tables in the text compare remittances from Chinese cities over time and geography, noting differences between provincial capitals and other large cities.
