Chapter IIntroduction

I.Background

II.Purpose

III.Limits and Assumptions

IV.Data Analysis

V.Outline and Synopsis

Chapter IIAn Overview of the Chinese Tax Law System

I.Introduction

II.Historical Development of the PRC Tax Laws

2.1.Pre1978

2.2.The Economic Reform Period 19781992

2.3.1994 Tax Reform 

2.4.PostWTO Accession

III.Framework of the Chinese Tax System

3.1.Sources of the Chinese Tax Laws

3.2.Basic Factors Affecting Chinas Tax Law System in General 

IV.Policy Considerations and the Reform of the Tax Law

4.1.A Capitalist Profit Motive?

4.2.Economic Efficiency and Tax Equity 

V.Chinas Tax Law Reform and Fiscal Decentralization

5.1.Overview

5.2.Overview of Fiscal Decentralization 

5.3.Impact of Fiscal Decentralization 

5.4.Challenges raised by fiscal decentralization 

5.5.Summary

VI.Conclusion

Chapter IIIThe Rule of Law and Legal Reform in China

I.Introduction 

II.The Western Rule of Law Rhetoric

2.1.The Contested Definition—Instrumental vs.Substantive

2.2.Rule of Law in Positivism and Natural Law

2.3.“Thin vs.thick” categorizationan overasserted dichotomy 

2.4.The Rule of LawDevelopment Rhetoric

2.5.Summary

III.The Establishment of the Socialist Rule of Law with Chinese

Characteristics

3.1.Socialist Legal Theorems

3.2.Development of Socialist rule of law

3.3.Summary

IV.The Implication of Rule of Law Conception to Contemporary China

4.1.Legal Reform in the Past Three Decades

4.2.Rule of Law vs.Rule by law 

4.3.Reviewing Chinas legal system

4.4.Summary

V.Prospects and Implications for Chinas Socialist Rule of Law

5.1.Is There a Necessity to Locate a Rule of Law Model for China?

5.2.Prospects for Chinese Legal Reform

VI.Summary

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Chapter IIntroduction

I Background

Economic globalizationSee Vito Tanzi, Globalization, Tax Competition and the Future of Tax Systems (IMF, Working Paper No141, 1996), summarizing the benefits of economic globalization as: (a) world resources are better allocated and output and standards of living rise; (b) individuals enjoy a greater range of choice in goods and services because of the greater access to foreign goods; (c) individuals are able to visit faraway places because the cost of travel has fallen significantly; (d) the amount and range of information available to individuals has increased enormously while the cost of getting information has fallen dramatically promises and fuels growth and success in development of the international communityThere has been a huge increase in transnational economic activity such as foreign direct investment, and the international flows of capitals and labor in global financial markets are enormousEconomic globalization has been realized not only through supranational legal regimes such as the World Trade Organization (WTO), but through reforms to regulatory regimes and national laws advocated by international institutions including the World Bank and International Monetary FundThese reforms have furthered deliberate policy choices to liberalize trade and capital mobility, deregulate markets, increase commercial participation, and eliminate crossborder transactional barriers

The postWorld War II development strategy of many developing countries or transitional economies has included a special roleSee Dharam Ghai, Introduction to the IMF and the South: the Social Impact of Crisis and Adjustment (DharamGhai ed, 1991), noting that states use tax reform to manage the process of economic growth, giving high priority to the goals of industrialization, diversification, and modernization  for tax policy, which is employed as a means of intervention into the economy and a catalyst for economic developmentSee id, stating that in part the tax policies meant tariff protection for domestic industry, input subsidies, and favorable domestic tax regimes (containing tax concessions or incentives) for industryThe agricultural and mineral sectors are highly taxed through mechanisms such as export taxes, heavy taxation of mining surpluses, and low expenditures)All types of taxes, particularly trade related taxes, are legitimate tools of states in monitoring the development processToday, tax reformsof almost all countries mainly aim to establish a diversified, well designed mix of taxes that encourage savings and capital investment in open market economies, because development priorities have shifted from promoting selfsufficiency and subsidizing domestic industry to encouraging exportled, deadministration growth and improving participationinthe global marketMeanwhile, driven by the need to fund government activities and reduce debt or governmental spending deficits, another key focus of tax reform has been tax revenue growth and socially conscious wealth redistributionSee Malcolm Gillis, Tax Reform in Developing Countries 1617 (Malcolm Gillis ed, 1989) ［hereinafter Tax Reform (Gillis)］ In particular, following the epidemic debt crisis in the 1980s, developing countries were forced to achieve and maintain a fiscal surplus or strong fiscal edge in order to clear their debts to international financial institutions and other creditorsSee Glenn PJenkins, Tax Reform: Lessons Learned in Reforming Economic Systems in Developing Countries at 29395 (Dwight HPerkins & Michael Roemer eds, 1991) as well as strive for improved healthy economic settings

A key feature of modern tax reforms is the prioritization of tax administration including resident registration, computerized compliance systems, stricter collection efforts, tax auditing, evasion control and tax law enforcementSee Vito Tanzi & Howell HZee, Tax Policy for Emerging Markets: Developing Countries, 34 (IMF Working Paper No35, 2000),  http:wwwimforg/external/pubs/ft/wp/2000/wp0035pdf Therefore, tax reforms have been regarded as a subcategory of public finance or economic policyAt the same time, legal system reforms typically involve transplanting legal theories and institutions across bordersTax governance, with its focus on institutional reform and (re)construction, has been a focal point to facilitate legal system construct

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