Before reform and open up, the finance and banking in Mainland China were highly centralized and unified. After reform and open up, economic rights were released to lower levels. The situation became “being led by central government while being managed at different levels”. The central and local finances were divided as if “serving meals to different diners from different pots”. Although local governments’ financial authority has been expanded, Banks are still owned by the central government. In order to collect funds, local governments have been developing their local economics, and trust and investment corporations are therefore founded. In Mainland China, trust and investment corporations have been developed for over 20 years. They finally went on the right track slowly after going through approximately 4 development periods and 5 reorganizations. This study analyzes the influences of the central government on local ones and explores the changes of central-local relations according to the development history of trust and investment corporations in Mainland China and the processes of these corporations’ rises and falls.
