Provincial deficits and political centralization: evidence from the personnel management of the Chinese Communist Party

Abstract The political autonomy of Chinese provinces derives from their economic independence. After the 2008 economic crisis, budget deficits increased significantly in most Chinese provinces, making them more reliant on financial support from Beijing. Provinces suffering high deficits will lose their political clout in both local and national politics. Therefore, provinces with large deficits tend to be less resistant to the enforcement of the law of avoidance and underrepresented in the Central Committee of the Chinese Communist Party. We find that in provincial standing committees, the members who are native or have more birthplace ties are more likely to be ranked behind the outsiders, especially so in provinces with a high level of deficits. We also find that provincial-standing-committee members from high-deficit provinces have a low possibility to obtain seats in the party's Central Committee. These findings confirm the close relationship between economic independence and political autonomy of Chinese provinces. In addition, we find that the logic of economic independence cannot depict the whole picture and that regional pluralism is also an important concern when the party manages its provincial leadership teams.