【摘要】This paper makes an investigation to China's fiscal competition from hiding tax in private sector and separating equilibrium of tax policy.We find substantial empirical evidence that is supportive of the notion of China's vertical fiscal competition and horizontal competition.We also find the unification of indirect tax of 1999 didn't reduce the gap of value-added tax burden between stare-owned enterprises and non state-owned ones,the coefficient of variation of budgetary revenue among provinces has increased and the coefficient of variation of budgetary expenditure has decreased since 1998.Furthermore,we find that the taxation reform of 1994 made a contribution to avoid the hiding tax in private sector of local governments.Our results,therefore,have potential implications for public policy in the wake of the fiscal equalization and enhancing the monitor efficiency of governmental decision-making.