Competition among local governments under transition of economic development models

Since 1978 of reform and opening up policy, China's economy achieved an average annual 9.67 % growth rate. It's well known as the "China miracle". What are the factors relating to China's economic miracle? Taking such basic conditions as natural resource, human capital and R&D, China has no obvious advantage which compared to other countries. In recent years, more and more scholars think that the competition among local governments is a major cause of China's economic growth. Competition is inevitable under scarcity. Currently, China's development faces a crucial period of transition, Which effects competition to the economic transformation. Does the existing mode of competition sustain? The purpose of this paper is to make competition among local government into a good mode by promoting government's capacity. This paper attempts to discuss the behavior of local government in change of economic development models. This paper could be divided into four parts. The first part introduces the background and significance of the research. The second part discusses the active and negative effects brought by the competition to economic development. The third part analyzes how local governments adjust their objectives, behavior, method and model in the competition. The last part gives some suggestions about constructing new local government competition.