This article firstly present a systematic overview on national tax regime by classifying China’s tax regime into three broad phases in context of underpinning market-oriented institutional development during last two decades and, then, in supplement to previous literatures that largely stop at provincial level, unveil the complex and obscure local tax regime based on sub-provincial field research in Zhejiang and Jiangsu province. The authors observed dual existing tax regimes: the hard and standardized state tax regime under central custody versus de facto soft and flexible local tax regime under local promotion and argue that despite central persisting initiatives in unifying tax regime and recentralization, local variation and divergence continue to play indispensable role in implementation of central reform due to China’s sheer size, geographical, cultural and resource endowment disparity as well as local state’s self-interest seeking inevitably induces localized adaptation of central policy and, consequently, calls for further decentralization.

China, belastingstelsels, decentralization, tax regime, transition economy
Multinational Firms; International Business (jel F23), Taxation, Subsidies, and Revenue: General (jel H20), Business Administration and Business Economics; Marketing; Accounting (jel M), Corporate Culture; Social Responsibility (jel M14), Public Economics (jel P35)
ERIM Report Series Research in Management
Erasmus Research Institute of Management

Zhu, Z, & Krug, B. (2004). Central Unification versus Local Diversity: China’s Tax Regime, 1980s-2000s (No. ERS-2004-089-ORG). ERIM Report Series Research in Management. Retrieved from