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With rapid development of urbanization after China’s reform and opening up, the transfer payment system has been reformed and improved constantly since it was implemented in 1995. But through empirical analysis on the implementation effect in this article, we find that the objective of China’s transfer payment system is not effective realized. After further discussion on the current transfer payment system and problem analysis, we find there still are defects in the structure setting, measuring system, capital allocation method and other aspects. As a result, the article takes factor method as the breakthrough point to further reform and optimizes the current transfer payment system, and gives the corresponding countermeasures and suggestions to promote the healthy development of China’s urbanization.

Study on Fiscal Transfer Payment System Reform in China—Based on the Perspective of a New Road to Urbanization