A Study On Reform Of The Financial System At County Level Of China

Tax Sharing System stimulates economic development of local governments andpromotes sustained and rapid growth of the local revenue. It has preliminarilyrationalized the financial allocation between the central government and localgovernments. Nevertheless, undefined explanation for the governments at the levelsbelow province and a nonstandard Transfer Payments system distribute to mismatchbetween fiscal power and administrative authority. Financial difficulty pervades incounties and township. To solve these problems, reforms of local financial systemshould be advanced to improve Tax Sharing System at all levels.This thesis applies the theories of Public Administration, fiscal administration, taxadministration, and political economics to further analyze the roots of the problems ofthe existing local financial systems, modeling the financial situation of Panyu District ofGuangzhou. Based on the implementation of the provincial government managing thecounties’ finance, this thesis promotes that the provincial government manage thedistricts’ finance, which simplify the financial layers and improve the Transfer Paymentssystem, in order to balance the fiscal power and administrative authority.