The China Quarterly · 2004 · 151 citations · 0 references
Public AffairsPublic FinancePublic PolicyFiscal PolicyLocal GovernmentTaxationFiscal EqualizationFiscal ReformLocal Tax PolicyRural FinanceTax ReformTax ReliefAgricultural Tax ReformFinancial SponsorshipFiscal Burdens On PeasantryIntergovernmental Fiscal RedistributionLocal Government TaxationLocal Taxation ReformPeasant RightsRural Governance Reform
Tax‑for‑fee reform is promoted as a remedy for excessive local fiscal predation, yet the crisis stems from systemic discrimination against peasants and a financing deficit that the central government must acknowledge. The article critiques the current fiscal response to rural stability and argues that eliminating structural bias against peasants is the ultimate solution. The reform temporarily eases peasant burden but relies on central sponsorship, making it unsustainable, and without fiscal redistribution reform it would actually harm the poorest peasants.
This article questions the effectiveness and viability of the fiscal response to rural stability adopted by the Chinese state. Tax-for-fee reform ( feigaishui ) has been heralded as a possible solution to the cancer of excessive fiscal predation by local government. While the experiment may have achieved in relief of peasant burden, the success is simply based on central government financial sponsorship and is thus hardly sustainable as a national programme. And unless there is fundamental reform of fiscal redistribution, the new scheme will technically hurt rather than help the poorest peasants. Putting all the blame on local cadres is politically expedient, but the central government needs to admit that the present crisis is a result of the systemic discrimination against peasants and the consequent deficit in financing rural governance. The ultimate solution entails a full-scale eradication of structural bias against the peasantry.