The Chinese government has vowed to change its style of governance by reducing the administrative approval procedures and delegating some powers to lower bodies in order to create a favorable environment for further economic development. Departments under the State Council such as the National Development and Reform Commission, the Ministry of Industry and Information Technology and the Ministry of Finance have also accelerated the pace of their reforms in line with the strategic choice that the Central Committee and the State Council have made to meet the country's changing situation.

Under such circumstances, how local governments accelerate reform and innovation to build service-oriented governments that satisfy the public has become a task of top priority.

The transformation of local government functions and institutional reform is a significant part of the central government's reform program. The function of local governments is to satisfy people's needs, alleviate social conflicts, and distribute social resources among different groups. With the development of society and the economy, local governments bear more responsibility for providing public services, such as employment, poverty relief, social welfare and the construction of infrastructure.

There is a tremendous demand for public services, and rural citizens have demands for public services that are different from urban citizens. The demand for public services from urban residents is mainly focus on employment, care of the aged, children, adolescents and low income households; while the demand for public services in rural areas is focused more on senior citizens, recreational activities, children, adolescents, low income households and disabled people. Thus local authorities should make policies according to local situations.