6min chapter

Pekingology cover image

The Political Logic of Taxation in China

Pekingology

CHAPTER

Zhu Luongi and the Provincial Leaders Faced Many Challenges

When Zhu Luongi became a member of the Standing Committee of the Politburo, he talked to Jiang Zemin and said we needed to decentralize the physical power. So what they needed to do was to borrow money from the local government. And then Shanghai knows that when you get the money, you're not going to pay me back. The central government actually was borrowing huge amount of these taxes from the provinces. By the same time, both the central government and the law governments didn't realize that the tax reform would improve their economies rapidly.

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