Indicators of the Persistence of County Control

As a formal level of government, the county has numerous measures for influencing local urbanization. It controls the taxation process, including the income tax for rural industries, a new value-added tax, as well as construction and commercial taxes available for infrastructural development; and since it can impose its own taxes, it can negotiate tax breaks in return for various concessions. Through its branch offices that are "nested" in the towns and townships—including the tax office, grain station, supply and marketing co-op, post office, market management committee, local police station, local branch of the Agricultural Bank of China or credit co-op, and middle school (Barnett 1965, 352–57)—it can directly and indirectly influence local development. Similarly, counties own factories, mines, forests, and other productive enterprises located within the spatial domain of county-towns or townships. Because of the

[18] During a January 1989 visit to Wuxi county I was told by the director of Meicun town that the "financial responsibility system" made his town more independent; after it paid its taxes, the town could determine how to allocate the rest of its funds. Dongting town, also in Wuxi county, is undergoing a major urban expansion program, and when all current projects are completed the town will be more modern and bigger than Jiangpu county's county seat.

shortage of funds for town development and the major role taxes and profits from productive units play in local development, control over these enterprises gives the county significant leverage when dealing with town and township officials. Also, county investments in town development helps them control outcomes in their own favor. Other mechanisms include labeling designated towns, drawing up development plans, controlling land usage, making loans, and particularly in the case of the county seat, exercising direct administrative control.