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Fiscal decentralization and personnel decentralization do not fully explain China's continuing expansion of local autonomy and economic growth. Administrative decentralization is a separate and important element in the restructuring of vertical intergovernmental relations in China after 1978. By delegating socioeconomic decision‐making and management powers to local governments in a gradual manner, the central government has successfully promoted economic growth without taking too much risk. The case study of the expansion of county government powers in Zhejiang Province demonstrates how administrative decentralization can be implemented independently of fiscal and personnel decentralization, and can also effectively expand local autonomy and stimulate regional economic growth. The case study of administrative decentralization in China not only adds to our understanding of decentralization in the former centrally‐planned command economy, but also offers a possible model for other transitional countries to initiate market reform...
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