China’s Urban Future: Can Inclusive Services Be Delivered Under Fiscal Decentralization?

Conference: AAS-in-Asia2020 (AAS-in-Asia2020)
Title: China’s Urban Future: Can Inclusive Services Be Delivered Under Fiscal Decentralization?
Stream: Urban Studies
Presentation Type: Panel Presentation
Lei Yu, Asia Institute, University of Melbourne, Australia (organizer, presenter, chair)
Xiao (Monica) Tan, School of Social and Political Sciences, University of Melbourne, Australia (presenter)
Suping Lou, Shandong University, China (presenter)


Since the turn of the century, the Chinese government has vastly increased funding for social welfare programs, with the share of expenditure on social services rising to 40% of a budget that has grown 5-fold over this period. This has been aimed at reversing rising income and regional inequalities, as well as boosting domestic consumption and rebalancing the economy. It also reflects the need to accommodate the increasingly urban and diversified society.

The improvements in services have been extraordinary. Average education attainment for the population aged 15 and above has risen from 5.3 years in 1982 to 9.6 years in 2017. Virtually every citizen is covered by a medical insurance scheme and a public pension program, albeit benefit levels vary. Since 2007, the government has vowed to ensure that every person has adequate housing by launching massive programs of public rental housing construction and shantytown renovation.

However, there are significant gaps in the delivery of outcomes. This panel of three papers provides insights into these gaps, focusing on the government’s efforts in the provision of affordable housing and essential public health services for migrant workers, and the role of residence permits in facilitating access. In examining the evolution of policy and practice across localities, these papers highlight the role of fiscal decentralisation, incentive mechanisms and governance institutions in explaining the considerable challenge ahead in China’s efforts to build a social welfare system for all.