As a huge country with a high population, a vast territory and imbalanced economic development across various regions, China has both the advantages and disadvantages of all large nations, particularly in terms of politics. This means that a careful balance between central and local relations is critical, especially under the governance of a single party. China deals with central-local relations using two initiatives, having learned that one initiative leads to improper handling. Mao Zedong believed that a combination of central and local initiatives was the key to success. In essence, this refers to the formation of a mechanism for incentive compatibility, through which each initiative can play its proper role, and national strength can be united to focus on state affairs.