ABSTRACT
In this and the next chapter, I will focus on the analysis of the multiple mechanisms and agents underlying China's regional development, especially the central state, local states and factors, and foreign investment. Centralized fiscal and investment systems, in which central governments controlled resource allocation, were critical to socialist development policies. The failure of the orthodox socialist system prompted socialist countries to reform their fiscal and investment systems. Fiscal and investment reforms are among the major components of reforms, and exert a great impact on regional development in China.
