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The Inequality of Regional Economic Development in China between 1991 and 2001

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Author Info
Jr-Tsung Huang
Chun-Chien Kuo
An-Pang Kao
Abstract

This paper measures the unequal development of the regional economies in China and investigates the primary factors leading to the inequality. The official data on China's regional GDP and the regional GDP of three industrial sectors from 1991-2001, as reported in the China Statistical Yearbook and A Statistical Survey of China, are adopted to calculate and decompose the Gini coefficient for each year. The primary finding is that the levels of inequality in China's regional economies clearly showed a slight upward trend after 1991. The inequality of the overall GDP is primarily attributed to the between-group effect rather than to the within-group effect. It is also found that the regional inequality of the secondary industry sector's development accounted for half of the overall inequality. Thus, this study suggests that it is crucial for China to formulate and adhere to policies that will help it to develop the economy more equally among all areas and to develop the secondary industry sector among all regions/provinces in order to overcome the important issue of the inequality in regional economic development.

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Article provided by Taylor and Francis Journals in its journal Journal of Chinese Economic and Business Studies.

Volume (Year): 1 (2003)
Issue (Month): 3 (September)
Pages: 273-285
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Handle: RePEc:taf:jocebs:v:1:y:2003:i:3:p:273-285

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Related research
Keywords: China; Economic Development; Gini Coefficient Decomposition; Inequality; JEL Classifications: D39; O10; R12;

References listed on IDEAS
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  1. Dennis Tao Yang, 1999. "Urban-Biased Policies and Rising Income Inequality in China," American Economic Review, American Economic Association, vol. 89(2), pages 306-310, May. [Downloadable!] (restricted)
  2. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April. [Downloadable!] (restricted)
  3. C. Cindy Fan, 1997. "Uneven development and beyond: regional development theory in post-Mao China," International Journal of Urban and Regional Research, Blackwell Publishing, vol. 21(4), pages 620-639, December. [Downloadable!] (restricted)
  4. Yao, Shujie, 1997. "Decomposition of Gini Coefficients by Income Factors: A New Approach and Application," Applied Economics Letters, Taylor and Francis Journals, vol. 4(1), pages 27-31, January. [Downloadable!] (restricted)
  5. Max Lu, 2002. "Forging Ahead and Falling Behind: Changing Regional Inequalities in Post-reform China," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 33(1), pages 42-71. [Downloadable!] (restricted)
  6. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December. [Downloadable!] (restricted)
  7. Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-27, September. [Downloadable!] (restricted)
  8. Lee, Jongchul, 2000. "Changes in the source of China's regional inequality," China Economic Review, Elsevier, vol. 11(3), pages 232-245. [Downloadable!] (restricted)
  9. Fei, John C H & Rainis, Gustav & Kuo, Shirley W Y, 1978. "Growth and the Family Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 17-53, February. [Downloadable!] (restricted)
  10. Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21. [Downloadable!] (restricted)
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  11. Paglin, Morton, 1975. "The Measurement and Trend of Inequality: A Basic Revision," American Economic Review, American Economic Association, vol. 65(4), pages 598-609, September. [Downloadable!] (restricted)
  12. Yao, Shujie & Liu, Jirui, 1996. "Decomposition of Gini Coefficients by Class: A New Approach," Applied Economics Letters, Taylor and Francis Journals, vol. 3(2), pages 115-19, February. [Downloadable!] (restricted)
  13. Tsui Kai-yuen, 1993. "Decomposition of China's Regional Inequalities," Journal of Comparative Economics, Elsevier, vol. 17(3), pages 600-627, September. [Downloadable!] (restricted)
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