ABSTRACT
One of the most significant consequences of China's rural reform in the 1980s was the rise of localism. It explains how the political and economic processes of rural reforms prompted the rise of localism in the context of the overall reform. The first stage of Chinese rural reform was the process of restoring family farming. The marketization stimulated by rural economic growth interrupted the normal "reform cycle", which in later stage often leads to recentralization in socialist economies. The most fundamental impact on the development of localism came about through the process of marketization. Localism was fostered not only by the resources generated by marketization, but also by newly-established relationships through marketization. Chinese history shows that localism can never be significant as long as provincial leaders are loyal agents of the central authorities. One of the important impacts of rural reforms was that it broke the inter-provincial economic balance and thus boosted the behavior of localism at provincial levels.
