Counties are currently undergoing a round of decentralization.
In July, Hunan issued an implementation plan for “delegating authority to counties.”
Thirteen provincial-level administrative licensing items were delegated to economically strong counties, and it was recommended that an additional 20 municipal-level authorities be concurrently delegated to the county level.
Similarly, Sichuan, Guangdong, Henan, and Hubei have all taken similar steps in recent years.
From the perspective of county-level investment promotion, this development warrants closer examination.
Approval authority for the implementation of industrial projects is being devolved from the provincial and municipal levels to the county level.
The intent behind this devolution is straightforward: to empower county-level investment promotion efforts to become self-sustaining.
And it all starts with faster project implementation.
01 Provincial-level administrative matters have been delegated to the county level
In county-level investment promotion, signing a contract is often just the beginning.
From signing the contract to breaking ground, an industrial project must navigate numerous hurdles.
Project filing, land allocation, environmental impact assessments, energy assessments, followed by construction and fire safety inspections—each step is a statutory procedure.
In the past, approval authority for many of these steps rested with provincial and municipal authorities.
Submitting materials upward and waiting for approvals to trickle down meant project developers incurred significant time costs.
Changsha County conducted a pilot test.
In December 2025, Changsha County obtained the authority to approve forest land use. As one project manager put it:
“It used to take one or two months of back-and-forth trips to the provincial capital, but now we get the approval in just a few days.”
This round of decentralization across multiple provinces targets precisely these procedures and generally falls into two categories.
The first involves delegating approval authority directly to the county level.
Among the 20 items Hunan Province has proposed to delegate from the municipal level, energy efficiency reviews for fixed-asset investment projects (excluding high-energy-consumption and high-emission projects), fire safety inspections, and the issuance of food production licenses are all mandatory approvals required for industrial projects to commence construction and begin operations.
In September 2023, Guangdong transferred 60 provincial-level administrative powers to relevant prefectures, cities, and counties (cities, districts) for implementation, covering areas such as investment, land use, and forest land use. This marked the first systematic “bulk devolution” of powers from the provincial level to counties; an additional seven items were added by the end of 2024.
In October 2021, Henan delegated 255 economic and social management powers to counties (cities) in a single batch, including administrative approvals and project applications; another 86 were delegated the following year. By the end of January 2022, counties (cities) across the province had processed more than 190,000 cases using the delegated powers.
Hubei, meanwhile, has granted the nation’s top 100 counties (cities) economic and social management authorities equivalent to those of cities under direct provincial administration since 2021.
Another category involves clearing the way for factor support.
When it comes to implementing industrial projects, the bottlenecks are often hard constraints such as land use quotas, energy consumption quotas, and environmental capacity.
Hunan’s recent delegation of authority for the review of forest land occupation (for areas under 1 hectare) specifically addresses land-use constraints when project sites involve forest areas.
Among the 266 support measures provided by Sichuan to its 29 pilot counties (cities) with expanded authority, the province explicitly guarantees provincial-level coordination and support for factors such as land use plans, energy consumption quotas, and environmental capacity. It also supports the existing economic and technological development zones in these pilot counties in their efforts to establish provincial-level high-tech zones.
Hunan officials have defined the delegated matters quite directly: they are high-frequency, key issues that constrain industrial development at the county level. The principle outlined in the plan is that any matter not prohibited by laws and regulations and that county-level authorities can effectively handle should be delegated to the fullest extent possible.
Looking deeper, the significance of this initiative extends beyond mere “speed.”
For enterprises, the speed at which projects are implemented is the most tangible measure of the business environment.
If the same project can break ground in three months in one county but requires a six-month wait in another, regional considerations for investment allocation will naturally tilt toward the former.
Hunan’s plan also clearly states its objectives: to enhance county-level autonomy and decision-making capacity in coordinating economic and social development, and to improve the efficiency of government services and the quality of the business environment.
Decentralizing approval authority and opening up channels for production factors—these are key competitive advantages for county-level investment promotion.
02 Bottlenecks in Project Implementation: The Root Cause Lies in the Mismatch Between Authority and Responsibility
So why delegate authority and allocate resources?
The county negotiates the projects, provides the land, and handles the implementation services, yet decision-making authority for many approvals along the implementation chain lies with the provincial and municipal levels.
While counties commit to a timeline for enterprises to set up operations and begin production, since approvals for certain stages lie at the provincial and municipal levels, the progress is not entirely within the county’s control.
This is one of the most common bottlenecks in county-level investment promotion: contracts are signed quickly, but implementation is slow. Project developers may be able to wait, but market opportunities may not.
The significance of administrative levels is supported by verifiable data. A comparison frequently cited by policy researchers shows:
Counties directly administered by the province have an average GDP 2.18 times higher than those administered by cities, general public budget revenue 2.33 times higher, and the number of industrial enterprises above designated size 2.07 times higher.
While these disparities certainly cannot be attributed entirely to administrative levels, they do at least illustrate that bypassing one administrative tier in the approval process and resource allocation significantly enhances a county’s efficiency and confidence in undertaking projects.
The wording used at the Central Economic Work Conference can be viewed as an official response to this issue:
Prioritizing the delegation of authority and empowerment, granting county-level governments management powers commensurate with their responsibilities, expanding county-level autonomy, and promoting the decentralization of resources.
The phrase “commensurate with their responsibilities” is worth reading again. The very fact that it calls for commensurability indicates that there was a mismatch in the past. While attracting investment is the county’s responsibility, the corresponding authority and resources were not fully under the county’s control.
Financial resources are equally strained. Local land sale revenues are projected to drop from a peak of 8.7 trillion yuan in 2021 to 4.15 trillion yuan in 2025—a decrease of approximately 4.6 trillion yuan over four years.
The shrinking of county-level coffers directly impacts their capacity to support investment promotion. Standardized factory buildings, infrastructure, and on-site services—all require funding.
The “funding based on tasks” approach being promoted in many regions—where financial and human resources are allocated according to the number of tasks undertaken—serves as a safety net for county-level investment promotion.
The consequences of this imbalance are being felt at both ends of the spectrum.
On the one hand, economically strong counties—which possess both industry and talent, with a queue of projects waiting to be launched—lack sufficient approval authority, resulting in a situation where “a big horse is pulling a small cart.”
This also explains why provinces have, almost in unison, chosen to delegate authority based on merit: Hubei grants it to the top 100 counties, Hunan to major economic counties, and Sichuan to 29 pilot counties. The faster a county moves, the tighter the “garment” of authority becomes.
On the other hand, counties with weak foundations face the exact opposite problem. In addition to limited authority, policies are poorly tailored to their needs, leaving them unable to attract high-quality projects or address their development shortcomings.
The broader context is that the share of the county-level economy in the national economy is declining.
The share of county-level GDP in the national economy fell from 54.9% in 2012 to 39.8% in 2020.
Looking specifically at Hunan, the province’s 86 counties (and cities) account for 90 percent of its total area, 70 percent of its population, and more than 50 percent of its total economic output—the vitality of county-level investment promotion directly determines the quality of a province’s economy.
Therefore, the intent behind this round of decentralization is clearly articulated in an official interpretation from Hunan: “Empowering those closest to the market with decision-making authority.”
Deregulation is merely a formality; the实质 is to enable county-level investment promotion to develop the capacity to sustain itself.
As for the direction of this self-sustaining growth, a May essay in the People’s Daily titled “Letting County-Level Economies Thrive” provided specific guidance:
Building on strengths in resources, industries, and culture, counties should identify their unique competitive niches—focusing on agriculture where appropriate, industry where suitable, and commerce where feasible—to avoid a “one-size-fits-all” approach across all counties.
When it comes to investment promotion, this means tapping into distinctive industries, pursuing differentiated development, and adapting to local conditions. The central government’s document also describes county-level economies with the phrase “each with its own distinctive characteristics.”
03 Effective delegation of authority means being able to receive and utilize it well
Delegating authority merely opens up policy space.
The real test lies ahead: Can the counties effectively assume these responsibilities? Can they utilize them well?
Hunan requires recipient counties to formulate implementation plans within 30 days; for highly specialized matters, a transition period of no more than six months is established. The entire devolution process is managed through a full-chain approach: “needs assessment—feasibility study—delegation—operational monitoring—evaluation—adjustment.”
Note the word “adjustment”—if a county cannot handle the delegated authority, it can be reclaimed.
Henan’s approach is called “training first, then handover”; before transferring authority, provincial and municipal departments first train local officials on the relevant operations. Setting such detailed safeguards precisely demonstrates that the risk of “failure to assume authority” was factored into the plan from the very beginning.
For county-level investment promotion, this test is very concrete.
Approvals such as energy efficiency reviews and fire safety inspections—which were previously overseen by specialized departments at the provincial and municipal levels—must now be handled by the counties’ own staff and technical resources.
While approvals may be faster, oversight must not be relaxed. If projects attracted through investment promotion fail to meet safety, environmental protection, or energy consumption standards, it is the county’s reputation for a favorable business environment that suffers.
The process of assuming these authorities essentially represents an upgrade of the county-level capacity to support investment promotion; professional talent, operational capabilities, and technical support must all be honed through the implementation of each individual project.
We must also recognize that while the devolution of authority addresses issues of jurisdiction, it does not resolve underlying industrial infrastructure issues.
He Xuefeng, a scholar who studies county-level issues, has publicly stated that the core of the county economy is modern manufacturing, which requires a minimum scale that most counties in central and western China do not possess; if we forcefully expand authority and strengthen counties without regard for these conditions, it may actually lead to an even more dispersed industrial layout.
Looking even further ahead, reshaping the boundaries of regulatory oversight may prove more difficult than the devolution of authority itself.
One detail worth noting is that among the 60 powers in Guangdong, 30 were delegated for implementation, while only 20 were directly devolved.
“Delegation” and “decentralization”—a difference of just one character. Legal liability for delegated matters remains with the provincial government. Behind this distinction lies a question that has yet to be fully resolved: How can the provincial government fulfill its end-to-end regulatory responsibilities without overstepping its authority? How can regulatory boundaries between cities and counties be clarified without leaving any gaps?
There are no ready-made answers to these questions; they can only be calibrated step by step through practice.
In Closing
Delegating and expanding powers to the county level adjusts the structure of authority; it cannot alter the industrial foundation or compensate for capacity gaps.
The “15th Five-Year Plan” Outline proposes developing county-level economies with distinctive characteristics.
Within this framework, counties with different circumstances will follow divergent paths.
Counties with small populations will focus on institutional reform and cost reduction—one approach; economically strong counties will prioritize expanding authority, empowering local governments, and boosting vitality—another.
Now that those closest to the market have been granted decision-making authority, the quality of those decisions will be the next critical factor.
