Abstract: The reform of China fiscal decentralization mainly takes place in the central authorities and provincial governments, while the local governments below the provincial level make their own adjustments to the 'central and provincial' regulation. This paper analyzes the determinants of fiscal decentralization on the basis of China county data. Resultsshow that 1) 'double grant dependency' brings over-centralization to local government; 2) compared with county-level government, power and resources of provincial government are easily coveted by regional elites, which increases the 'windfall effect' and 'voracity effect'; 3) as the mobility of factors of production is higher in the province than that of inter-province, county-level government receives higher incentive to compete for economic growth in decentralization; 4) the policy of 'county under direct provincial control' can not stimulate the economic growth in county and is not an ultimate solution to its fiscal embarrassment. Therefore, application of mandate model to establishing fiscal decentralization is recommended.