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Centralizing Treasury Management in China: The Rationale of the Central Reformers

Public Administration & Development, Vol. 29, pp. 263-273, 2009

11 Pages Posted: 27 Mar 2012  

Yuen Yuen Ang

University of Michigan at Ann Arbor - Department of Political Science

Date Written: July 24, 2009

Abstract

The Chinese central government, spearheaded by the Ministry of Finance, launched a bold reform of the treasury management system in 2001, centralizing the disbursement of budgetary funds. This article analyzes the rationale of institutional reform from the perspective of the central reformers. Traditionally, governmental bank accounts in China were fragmented between and within levels of government, hindering budget implementation and intergovernmental transfers, as well as fomenting corruption. The centerpiece of China’s treasury reform is the establishment of the Treasury Single Account (TSA), which serves to both strengthen expenditure controls and improve cash management. However, while the treasury reform promises to make significant strides in improving fiscal control and countering the misuse of public funds, its implementation remains imperfect and incomplete.

Keywords: anti-corruption, fiscal control, intergovernmental transfers, treasury reform, China

Suggested Citation

Ang, Yuen Yuen, Centralizing Treasury Management in China: The Rationale of the Central Reformers (July 24, 2009). Public Administration & Development, Vol. 29, pp. 263-273, 2009. Available at SSRN: https://ssrn.com/abstract=2028083

Yuen Yuen Ang (Contact Author)

University of Michigan at Ann Arbor - Department of Political Science ( email )

Ann Arbor, MI 48109
United States

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