Essay On Economic Decentralization

645 Words2 Pages

As these economic reforms led to China's accelerating economic growth, they also led to increasing political and economic decentralization where local regional governments made economic decisions, used tax revenue for local projects and received less financial support from the central government(Goldman & Mcfarquhar 2000, p.8). As explained by social scientist Gordan White, he characterized the social changes in post-Mao economic reforms as 'fragmented and fragmenting' (Goldman & Mcfarquhar 2000, p.17) The introduction of market forces as well as political and economic devolution of power to the local governments had produced serious social unrest to the Chinese's society. For example, the economic decentralization of the central government to the local government contributed to the alliances between the local officials and local enterprises. Although it improved the standard of living, this kind of alliance gave rise to corruption and enrich the local officials with power, giving them ultimate control ( Goldman & Mcfarquhar 2000, p.17). Due to economic interest of local authorities, they ignore the central government warning against corruption, labour exploitation and taxes overcharges. For example, due to the dual-price policy in products, it provides opportunities for people who have access to state-controlled goods and materials to make huge profits by buying them at an officially-fixed low price and reselling them at free market at a higher price (Minami 1994 , p.21). This shows that local government do not obey government rules and corruption in government is evident and inevitable. The central government failed to realise that although economic and political decentralization did improve market economy, it would on the ot... ... middle of paper ... ...h. This can be supported by a study in the Chinese Academy of Social Sciences where the average per capita GNP was 4754 yuan whereas the per capita GNP of Shanghai, Beijing and Tianjin was 18943 yuan (Mok 2000 , p.29). Thus, this supports the publication made by the World Bank where only the coastal area have a better living standard. Furthermore, in addition to income inequality and regional disparities, economic growth also contributed to the disparity of educational development in different regions. Due to economic decentralization in education, poorer communities lacked the funding in ensuring a quality education. Furthermore, even in Guangzhou which is one of the richest provinces in China, faces education disparity because secondary school in GuangZhou are classified from key-point schools in the city all the way down to low achievers school (Mok 2000 , p.31).

More about Essay On Economic Decentralization

Open Document