China’s fiscal system is a governing system that is a combination of the centralization of fiscal legislation and fiscal policy decision with decentralization of fiscal determination.In fact,China’s fiscal system reform is a long-term game between the Central government and the local government with the adjustment of rights of fiscal expenditure,revenue share and fiscal transfer with the distribution of revenue and expenditure as the core of the reforms.The theoretical model analysis shows that the fiscal reforms and fiscal decentralization that is composed of the decentralization of fiscal revenue,expenditure and fiscal transfer,impose really complicated effects on the central government revenue,the local government revenue,the total revenue and their structure,and the effects of the fiscal reform and fiscal decentralization dependent on a series of factors such as market economy development,decentralization of government administration,the portfolio of fiscal decentralization,the marginal product of central government fiscal expenditure and local government fiscal expenditure,investment marginal overflow between state sector and private sector,marginal costs and taxing costs.So,there ought to be diversification of central-local fiscal decentralization.