The power pendule between central and local government

China Law Blog points at a remarkable analysis at the China Leadership Monitor by Dr. Barry Naughton. Key argument, the central government is getting more cloud over local government by asserting more influence on real estate, the major source of income for governments in China:

Since the beginning of the 2006 round of macroeconomic contraction, central government officials have evinced a willingness to directly criticize and confront local government officials over economic issues. As we noted in the previous issue of CLM, the State Council openly rebuked the government of Inner Mongolia for failing to mplement macroeconomic policies at an early stage of the contractionary policies.

This assertiveness has continued throughout the policy changes in land regulation, with a persistent willingness to state that the targets of increased regulation and oversight are local government officials.

Of course, the fall of Shanghai's party secretary Chen Liangyu plays an important part in his argument.
In short: I do not buy his argument and would rather see a central government that has so many priorities on its political agenda, its success depends very much on a negotiated balance it can strike with local governments rather than sheer power play. Local governments will never allow the central government to get too much influence in real estate, since much of the power of the local governments depend on that income from real estate.