Abstract: The Vertical Intergovernmental Relations (VIGRs) are the core of governance in China. Since the Reform and Opening in the late 1970s, Chinese VIGRs have become a dual structure of political centralization and economic decentralization, in the tide of devolution in the area of economic and administrative affairs. This paper discusses the institutional performance of Chinese vertical power allocation in four dimensions: anti-corruption, market integration, social stability and governmental innovation. It studies the system roots of corruptions, local protectionism, the paradox of stability maintenance and the lack of governmental innovations in contemporary China, and suggests that Chinese VIGRs should be legalized in future, on the basis of power inter-dependence.