ABSTRACT
This chapter presents the major issues and the scope of central-provincial fiscal relations. It explores a historical recounting of crucial developments in the policy area since 1980. The chapter summarizes the major findings, offers a succinct exploration of the likely changes ahead after the 18th Congress of the Chinese Communist Party (CCP), and highlights new avenues for research in the future. The chapter also explores some parties' behaviors and consequences of the competition over the distribution of fiscal revenues and expenditures, to measure their relative power. It examines the broader power implication beyond the central-provincial competition, in the light of the idea of fiscal power as an instrument to promote national development, where the center and provinces count on each other in a principal-agent relationship. The tax-sharing system (TSS) policy package contained expenditure requirements in selective issue areas, exemplified by the desired budgetary growth specified in the national laws governing agriculture, education, and science and technology.
