Abstract: This paper focuses on the theoretical framework of the division between the intergovernmental fiscal responsibilities and expenditure liabilities and takes Shanghai as a research sample to assess the division effect of the fiscal responsibilities and the expenditure liabilities in urban areas. The findings show that the city government actually assumed 43.85% of the total expenditure liabilities from 2007 to 2016 in average relative to the nominal expenditure. Of the 3 kinds of fiscal responsibilities, the proportions of the actual average assumption of the city government in the order of high to low are social expenditure (40.13%), maintenance expenditure (37.42%) and economic expenditure (34.42%) respectively. Among the selected 8 items of the key fiscal responsibilities, there is a certain degree of dislocation for the different proportions of the actual average assumption of expenditure. Thus this paper offers the following reform suggestions: to encourage the city government to take back part of the fiscal responsibilities and expenditure liabilities, to draw lists of the division between the urban fiscal responsibilities and expenditure liabilities, and to construct the mechanism to match the urban fiscal responsibilities with the urban expenditure liabilities.

Key words: inter-governmental financial relationship; urban fiscal responsibilities; urban expenditure liabilities; structural expenditure; functional expenditure