Regional Decentralization, Fiscal Incentives and Privatization of Public-Owned Enterprises

I. IntroductionThe regional decentralization reform, which was initiated in China in the early 1980s, hasgreatly heightened the enthusiasm of local governments to develop the local economy.This is mainly because decentralization transferred some of the power from the centralgovernment to local governments, which, as a result, began to shoulder the function oflocal economic management. The central government is also restricted from too muchintervention in local economic affairs. Meanwhile, the…