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New public management (NPM) paradigm plays an increasingly important role in contemporary public management practices throughout the democratic world. This article argues that the driving force behind NPM reform in China at the local level is the competitive pressure to improve administrative performance. In China, where there is no electoral democratic regime, local governments face pressure in competition with counterparts over economic performance and consequent promotion opportunities for their leadership. The introduction of NPM can make local governments more effective and efficient in providing public services, which can result in local governments attracting more investments and enhancing competitiveness. The administrative licensing reform with public service outsourcing in Heping District, Tianjin City, China, is an example of NPM reform driven by competition among local governments. Keywords: new public management • local governments • administrative licensing • public service outsourcing • China
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