On Division of Economic Power Between Central and Local Levels

In economics, economic mechanism is synonymous with economic system. The crux is how resources are allocated and how income is distributed. The current so-called deep-level contradiction is precisely the inner contradiction of these two elements. Superficially, they are manifested as troublesome problems of the economic system. First, who holds decision-making power? Second, where does national income go? Central decision-making power is often eroded by lower levels; as the saying goes: "The central levels make decisions; the lower levels make counterdecisions." Local levels feel a lot of central interference; enterprises feel a lot of administrative interference from both the central and local governments, including different kinds of levies. Every level feels a lack of power. Who, then, really holds decision-making power? The proportion of budget revenues in national income has dropped every year. Both the central and local fiscal departments are feeling a crunch, but still expenses borne by enterprises and undertakings are increasing. Employee incomes are increasing, but statistics show that the real annual increase has been only 3 percent, lower than the GNP increase. Every income-receiving department and level feels a shortage of funds. Where, then, has the national income gone? To whom has it been distributed?