This paper calculates the value of China's provincial circular economy performance of from 2007 to2016 by using principal component analysis and efficiency coefficient method, and tests the impact of Chinese-style fiscal decentralization and local government competition on circular economy performance based on thedynamic generalized spatial model. The research shows that, the impact of Chinese-style fiscal decentralizationon circular economy performance is negative, and this negative impact further reduces circular economyperformance through the "spillover effect" between different regions. The impact of the local governmentcompetition on circular economy performance has the characteristic of inverted-U type. Chinese-style fiscaldecentralization, local government competition's comprehensive effect on circular economy performance isunstable by using different spatial weight matrix. Finally, this paper puts forward some policy suggestions onhow to improve circular economy performance in China.