This chapter argues that China's central leaders have begun to reverse the decentralization of the social welfare regime that occurred early in the reform period. It focuses on the recent recentralization processes as manifested in several social policy areas, including basic education, public health, pension insurance, and public housing. Based on these policy changes related to social welfare recentralization, the chapter also argues that a series of problems has emerged from the disconnect between the continued decentralization of the local fiscal system and the recentralization of the administration of social welfare. In most cases, reform of the social welfare system in China followed the logic of efficiency in economic reform, in which decentralization became dominant. The policy proposed to more reasonably divide the responsibilities of central and local governments for social welfare provision and financing, and to promote the gradual reform of the transfer payment system.