Study On The Financial Competition Ways Between Mid-China Regions

The competition between the levels of the main body is indispensable in complete and efficient economies, but also inevitable, including the competitions between horizontal bodies, the competitions between longitudinal bodies and mixed competitions. Countries have competition, the same, there is competition between the governments in a country, but the purpose of their competition, the method of choice, that effects can be reached is not the same. Have their own independence and unity of the responsibilities in a federal, state, local governments and the federal government, the federal government and financial privileges and expenditure responsibilities to local governments without too much intervention is only responsible for the lead role, and therefore in the federal state, can be used to increase public spending by improving government efficiency, reduce the marginal effective macro tax burden between local government facilities, improve the investment environment and provide the level of public services and other means to attract elements (including labor, capital, technology) into so as to achieve a higher output, promote regional development. Local government authority in non-federal countries generally are more restricted, means it may be more difficult to take such extreme cases, factors even can not flows, the development of local government is basically dependent on the central government’s macro-rationing. China belongs to the non-federal states, the early implementation of the planned economy, the local government is basically no right to speak, entirely by the central government macro configuration, with the local, the implementation of rationing, there is no question of competition between the local government, with the implementation of the devolution of power as well as the tax system, the local government began to have a certain degree of autonomy, the corresponding naturally have the distinction of rights and responsibilities and criteria, how to better develop the local economy began to become a competition between local governments fuse. Due to the special circumstances of the country, local governments can only cross the river by feeling the stones, the competition in the respective financial weak case generated a lot of problems, so how to correctly analyze the understanding of the local government competition for the help of local government recognize the situation and take reasonable and effective means of allocation of resources so as to achieve the desired target is an important issue worthy of in-depth research.This article discusses the competitive behavior of local governments mainly in factor mobility choice, through the establishment of a two-region economic model theoretically-depth analysis of local government in the face of fiscal competition issues factor mobility should choose the manner in which its overall economic impact; specifically through the flexibility of macro tax burden public services and government spending on mobile elements analysis of fiscal competition between local governments in China, which is the innovation of this paper.