Recent literature on environmental governance in China frequently ascribes blame for China's environmental problems to sub-national governments' lax environmental enforcement. Such research implicitly assumes that more central control would lead to better results but, as yet, the role of the centre in environmental governance remains underresearched. In the context of the current phase of recentralization, this article studies central and local interests, capacities and interactions across policy issues and government agencies. By “bringing the centre back” into the study of central–local relations in China, we examine both where such recentralization has in fact occurred and whether such recentralization efforts have improved environmental outcomes. We argue that centralization does not improve outcomes in every case. Further, central and local levels of governance are not as different as they might seem. Indeed, there are significant areas of overlapping interests and similar patterns of behaviour, both positive (enforcement) and negative (shirking), between central and local administrations. The results draw an empirically and theoretically rich picture of central–local relations that highlights the innate complexity of China's environmental governance patterns during the current phase of recentralization.

This article examines the so-called “central State Owned Enterprise (SOE) problem” in China's environmental governance system, namely central SOEs' defiance of environmental regulation. We present evidence showing that, in the last decade, central SOEs have been the source of a large number of serious pollution incidents and have often failed to comply with environmental guidelines and regulations. Central SOEs in the electricity generation and oil and gas industries are particularly culpable, with six firms alone accounting for 62 per cent of all 2,370 reported violations (2004–2016). We argue that a combination of “central protectionism” of state-owned national champions and insufficient regulatory capacity in the environmental bureaucracy have provided state firms under central management with both incentives and opportunities to shirk on environmental regulations. Yet, while the institutions of central protectionism are deeply rooted, countervailing forces within the complex Chinese state are also gaining momentum. In spite of the considerable regulatory challenges, officials in the environment bureaucracy display increasing resolve and ingenuity in trying to strengthen their enforcement capacity.

Decentralized environmental governance theory suggests that decentralization can produce better environmental performance mainly because lower-level governments are closer to the people and environmental issues and are considered more legitimate than the national government. However, China's decentralized system of environmental governance has been often regarded as a key factor in creating pollution problems rather than in solving them. To explain this puzzle, this article, using Blame Avoidance Behaviour in government theory as a theoretical framework, examines how blame avoidance behaviour shapes China's decentralized system of environmental governance from three perspectives: first, actors and the chain of blame shaped by the hierarchical power structure among environmental policymakers and implementers; second, the strategies of discursive domination and decentralization for blaming environmental problems on local officials; and lastly, the contextual factor of “hierarchical governmental trust.” Drawing on documentary discursive analysis and extensive fieldwork, this article suggests that the dysfunction of China's decentralized environmental governance structure may in fact be an outcome of a blame-shifting game between central and local governments.