ABSTRACT
China is widely known for its economic growth in the past two and a half decades. Less well known, however, have been the numerous efforts undertaken, especially in the past decade, to reform its governance system. Many of these governance reform efforts have sprung from the realization that in order to sustain economic growth in the long run and to maintain political order, it is necessary to develop a strong governance system that can provide the institutional support for an effective market economy. Recent reform efforts have been targeted at various widely known problems in the existing governance system. For instance, despite the increasing size of the market-based economy, many government entities have engaged in collecting various types of fees and fines and setting them aside as extra-budgetary items for exclusive, and sometimes dubious, use by agency personnel, with little transparency or accountability (Tsui and Wang, 2004). Another common practice has been for government entities, and most noticeably the military during the 1990s, to engage in various business and profit-making activities, creating breeding grounds for corruption as well as conflicts of interest, especially for agencies that have regulatory responsibilities (Yang, 2004).
