4.1 Structure ofGovernment in China,2003

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Procuratorial. The people’s procuratorates are state organs for legal supervision.The Supreme People’s Procuratorate,headed by the procuratorgeneral,is the country’s highest procuratorial organ.

The government ofChina has a five-tier hierarchical structure,with the central government in Beijing,the capital,at the apex (figure 4.1).The second tier comprises jurisdictions that have provincial status.These jurisdictions consist of22 provinces;4 municipalities (Beijing,Chongqing,Shanghai,and Tianjin);5 autonomous regions (Guangxi,Inner Mongolia,Ningxia,Tibet, and Xinjiang);2 special administrative regions (Macao and Hong Kong, China);and Taiwan,China.

Provinces and autonomous regions are divided into autonomous prefectures,counties,autonomous counties,and cities.Counties and autonomous counties are divided into townships,nationality townships, and towns.Municipalities directly under the central government and otherlarge cities are divided into districts and counties.Autonomous prefectures are divided into counties,autonomous counties,and cities (seearticle 30,Chinese constitution).Practically speaking,there are four tiers oflocal government:provincial-level government,headed by an elected governor and reporting to the State Council;prefecture-level government, the administrative division between province and county;county-level government,the basic administrative division;and township-level government,the basic administrative division in the vast countryside.Village-level

22 provinces (average pop: 55.6 million)

Central government

4 municipalities (average pop: 17.7 million)

333 prefecture-level units (average population: 3.8 million)

5 autonomous regions (average pop: 19.7 million)

2,861 county-level units (average population: 441,000)

44,067 township-level units (average population: 29,000)

Source: Ministry ofFinance ofChina.

FIGURE 4.1 Structure ofGovernment in China, 2003

140 Baoyun Qiao and Anwar Shah

organizations in China also provide public services but are considered community units instead ofgovernments.

Currently,under the constitution,the National People’s Congress and the State Council exercise the functions and powers to approve the establishment (article 62) and the geographic division (article 89) ofprovinces, autonomous regions,and municipalities directly under the central government.The State Council exercises the functions and powers to approve the establishment and the geographic division ofgovernments at the prefecture and county levels.The provincial government determines the establishment and the geographic division ofthe township governments (see article 107, Chinese constitution).

Although this power is not specified in the constitution,provincial,prefecture,and county governments can be dissolved by the central government,and township governments can be dissolved by the provincial governments.In addition,the central government has the authority to annul local regulations or decisions ofthe organs ofstate power ofprovinces, autonomous regions,and municipalities directly under the central government that contravene the constitution,the statutes,or the administrative rules and regulations.It also has the power to alter or annul decisions and orders issued by local organs ofstate administration at different levels(article 67 and 89,Chinese constitution).

According to the constitution,the People’s Congress and people’s government at the province,prefecture (or city),county,and township levels represent the local organs ofstate legislative power and the executive organs ofpower.The Communist Party at each level ofgovernment provides oversight functions by having a party committee for each governmental unit. Local leaders ofthe party are appointed by and directly report to the party’s committee ofthe next-higher level ofgovernment.Higher-level governments are also empowered to nominate the members ofthe executives and councils ofthe lower-level governments.However,the local congress must ratify such nominations.Members ofthe local congress are elected by universal adult franchise.

The fiscal system ofChina has five levels,corresponding to the government structure.The central government sets the policy direction.Local governments are responsible for designing and implementing local policies that fit local needs,as long as local policies are not in conflict with the central government’s policy.Various local governments also enjoy significant local autonomy in setting priorities;for example,all local governments have independent budgets that are approved by the local people’s congress.

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The central government determines the fiscal relation between the central and provincial governments.There are direct fiscal relations between the central government and the provincial governments,1 but no such relations with subprovincial governments.Under a unitary tax system,revenue bases are assigned to the central and subnational governments by the central government.The central government also determines the assignment ofexpenditure responsibilities between the central and the subnational governments. Subprovincial fiscal relations are ordered at the discretion ofthe provincial government.Although there are many practices,the subnational fiscal system in China can be categorized into two models:

1. “Province managing county”model. The provincial government directly manages the prefectures and counties.There are direct intergovernmental relations between the provincial government and the prefecture governments,and between the provincial government and the county governments,in revenue assignment,expenditure assignment,intergovernmental transfer and subsidies,borrowing,and budgetary allocations and adjustments.This model is a more decentralized one,and there are no fiscal relations between the prefecture governments and the county governments.The model is implemented in Anhui,Fujian,Hailongjiang,

Hainan,Hubei,Ningxia,Zhejiang provinces,as well as in Beijing,Shanghai,Tianjin,and Chongqing,the four provincial-level cities,and in

Dalian,Ningbo,Qingdao,Shenzhen,and Xiamen,the five separately planned cities where no prefecture government existed at the end of2005. 2. “Prefecture managing county”model.There are intergovernmental fiscal relations between the provincial government and the prefecture governments in revenue assignments,expenditure assignments,intergovernmental transfers,borrowing,and budgetary allocations.However,there are no fiscal relations between the provincial government and county governments.All provinces except those that apply the “province managing county”model implement this model.

The central government ofChina encourages the “province managing county”model,and it is expected that more provincial governments will adopt it in the near future.The majority oftownship governments have their own independent budgets.However,some counties practice a “county replacing township”model,which is encouraged in poorer jurisdictions by the central government to improve government efficiency by decreasing management layers.Under this model,the township government is no