Abstract：In the past decade,budgetary reform in China has focused on technical innovation,such as zero-based budgeting,procurement management,treasure management,etc.However,in modern society,the more basic fundamental budgeting issue is how to deal with the relationship between budgeting and democratic governance.This study describes the process of the 2006 deliberative discussion on budgeting in Xinhe,a town in Zhejiang province.Deliberative discussion on budgeting is a significant innovation in public budgeting in Chinese local government.It reconstructures the relationship between citizens and state and enhances democratic budgeting management,thus promoting democratic governance at local governments.The paper argues that deliberative discussion on budgeting is the result of the impacts of social change on state governance in China.
