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Geography, Economic Policy, and Regional Development in China

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Author Info
Sylvie Démurger (Centre National de la Recherche Scientifique (CNRS) Centre d'Etudes et de Recherches sur le Dévelopment international (CERDI))
Jeffrey D. Sachs (Center for International Devlopment (CID) Harvard University)
Wing Thye Woo (Economics Department University of California, Davis)
Shuming Bao (China Data Center University of Michigan)
Gene Chang (Economics Department University of Toledo)
Andrew Mellinger (Center for International Development Harvard University)

Additional information is available for the following registered author(s):

Abstract

Many studies of regional disparity in China have focused on the preferential policies received by the coastal provinces. We decomposed the location dummies in provincial growth regressions to obtain estimates of the effects of geography and policy on provincial growth rates in 1996-99. Their respective contributions in percentage points were 2.5 and 3.5 for the province-level metropolises, 0.6 and 2.3 for the northeastern provinces, 2.8 and 2.8 for the coastal provinces, 2.0 and 1.6 for the central provinces, 0 and 1.6 for the northwestern provinces, and 0.1 and 1.8 for the southwestern provinces. Because the so-called preferential policies are largely deregulation policies that have allowed coastal Chinese provinces to integrate into the international economy, it is far superior to reduce regional disparity by extending these deregulation policies to the interior provinces than by re-regulating the coastal provinces. Two additional inhibitions to income convergence are the household registration system, which makes the movement of the rural poor to prosperous areas illegal, and the monopoly state bank system that, because of its bureaucratic nature, disburses most of its funds to its large traditional customers, few of whom are located in the western provinces. Improving infrastructure to overcome geographic barriers is fundamental to increasing western growth, but increasing human capital formation (education and medical care) is also crucial because only it can come up with new better ideas to solve centuries-old problems like unbalanced growth. Copyright (c) 2002 Center for International Development and the Massachusetts Institute of Technology.

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Article provided by MIT Press in its journal Asian Economic Papers.

Volume (Year): 1 (2002)
Issue (Month): 1 ()
Pages: 146-197
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Handle: RePEc:tpr:asiaec:v:1:y:2002:i:1:p:146-197

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  6. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
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  1. Wing Woo, 2004. "Some Fundamental Inadequacies of the Washington Consensus: Misunderstanding the Poor by the Brightest," Development and Comp Systems 0411021, EconWPA. [Downloadable!]
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  2. Solanko, Laura, 2003. "An empirical note on growth and convergence across Russian regions," BOFIT Discussion Papers 9/2003, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
  3. Xubei Luo, 2004. "The role of infrastructure investment location in China's western development," Policy Research Working Paper Series 3345, The World Bank. [Downloadable!]
  4. Wu, Yanrui, 2008. "Comparing Regional Development in China and India," Working Papers RP2008/13, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  5. Laurence J. Kotlikoff, 2007. "Staticide - America's Suicidal Healthcare Status Quo," Boston University - Department of Economics - Working Papers Series WP2007-014, Boston University - Department of Economics.
  6. Robert C. Feenstra & Gordon H. Hanson, 2004. "Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm," NBER Working Papers 10198, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  7. Sudip Ranjan Basu, 2005. "Correlating Growth with Well-Being during Economic Reforms Evidence from India and China," Development and Comp Systems 0509010, EconWPA. [Downloadable!]
  8. Alyson C. Ma, 2006. "Export Spillovers to Chinese Firms: Evidence from Provincial Data," Journal of Chinese Economic and Business Studies, Taylor and Francis Journals, vol. 4(2), pages 127-149, July. [Downloadable!] (restricted)
  9. Bihong HUANG & Feng DING, 2009. "Spillover Effect Of Infrastructure And Regional Gap In China," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 9(2). [Downloadable!] (restricted)
  10. Russell Pittman, 2002. "Chinese Railway Reform and Competition: Vertical or Horizontal Restructuring?," Development and Comp Systems 0204004, EconWPA. [Downloadable!]
  11. Curran, Declan & Funke, Michael & Wang, Jue, 2007. "Economic growth across space and time: subprovincial evidence from Mainland China," BOFIT Discussion Papers 21/2007, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
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  12. Hasan, Iftekhar & Wang, Haizhi & Zhou, Mingming, 2009. "Do better institutions improve bank efficiency? Evidence from a transitional economy," BOFIT Discussion Papers 28/2008, Bank of Finland, Institute for Economies in Transition. [Downloadable!]
  13. Derek C. Jones & Cheng Li & Ann L. Owen*, 2003. "Growth and Regional Inequality in China During the Reform Era," William Davidson Institute Working Papers Series 2003-561, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
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  14. Nicolaas Groenewold & Guoping Lee & Anping Chen, 2006. "Inter-Regional Output Spillovers of Policy Shocks in China," Economics Discussion / Working Papers 06-26, The University of Western Australia, Department of Economics. [Downloadable!]
  15. Laura Solanko, 2003. "An empirical note on growth and convergence across Russian regions," Macroeconomics 0308005, EconWPA. [Downloadable!]
  16. Sudip Ranjan Basu, 2007. "Comparing China and India: Is dividend of economic reforms polarized?," HEI Working Papers 01-2007, Economics Section, The Graduate Institute of International Studies. [Downloadable!]
  17. Dollar, David & Hallward-Driemeier, Mary & Mengistae, Taye, 2004. "Investment climate and international integration," Policy Research Working Paper Series 3323, The World Bank. [Downloadable!]
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  18. Zhao Chen & Yu Jin & Ming Lu, 2005. "Economic Opening and Industrial agglomeration in China," Industrial Organization 0511012, EconWPA. [Downloadable!]
  19. Alyson Ma, 2006. "On the choice of in-house production versus outsourcing by multinationals," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 15(2), pages 231-254, June. [Downloadable!] (restricted)
  20. Nicolaas Groenewold & Guoping Lee & Anping Chen, 2006. "Inter-Regional Output Spillovers in China: Disentangling National from Regional Shocks," Economics Discussion / Working Papers 06-25, The University of Western Australia, Department of Economics. [Downloadable!]
  21. Boyreau-Debray, Genevieve, 2003. "Financial intermediation and growth - Chinese style," Policy Research Working Paper Series 3027, The World Bank. [Downloadable!]
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