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Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness

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Author Info
Kanbur, Ravi
Zhang, Xiaobo

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Abstract

This Paper constructs and analyses a long run time series for regional inequality in China from the Communist Revolution to the present. There have been three peaks of inequality in the last fifty years, coinciding with the Great Famine of the late 1950s, the Cultural Revolution of the late 1960s and the 1970s, and finally the period of openness and global integration in the late 1990s. Regional inequality in China in 1999 exceeds the level experienced at its peak in the Cultural Revolution, and is near the peak level of inequality experienced during the Great Famine. Econometric analysis establishes that regional inequality is explained in the different phases by three key variables—the ratio of heavy industry to gross output value, the degree of centralization, and the degree of openness. Inequality has increased alongside spectacular performance in growth and poverty reduction. As China enters the WTO, pro-active measures encouraging liberalisation and investment in the inland regions may be required to promote more equitable growth in the future.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2887.

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Date of creation: Jul 2001
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Handle: RePEc:cpr:ceprdp:2887

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Related research
Keywords: chinese economy; decentralization; industrialization; inequality; openness; polarization;

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Find related papers by JEL classification:
D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects

References listed on IDEAS
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Mitra, Pradeep & Yemtsov, Ruslan, 2006. "Increasing inequality in transition economies : is there more to come?," Policy Research Working Paper Series 4007, The World Bank. [Downloadable!]
  2. Cao, Heping & Ligon, Ethan & Meng, Xiangyi, 2006. "Can Growth Compensate Inequality and Risk?---a welfare analysis for Chinese households," 2006 Annual meeting, July 23-26, Long Beach, CA 21458, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  3. Reuter & Ulrich, 2004. "The Effects of Intraregional Disparities on Regional Development in China: Inequality Decomposition and Panel-Data Analysis," Econometric Society 2004 Far Eastern Meetings 716, Econometric Society. [Downloadable!]
  4. Zhang, Yin & Wan, Guanghua, 2005. "Why Do Poverty Rates Differ From Region to Region? The Case of Urban China," Working Papers RP2005/56, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  5. Kaushik Basu, 2007. "Participatory Equity, Identity, and Productivity Policy Implications for Promoting Development," Working Papers id:1122, esocialsciences.com. [Downloadable!]
    Other versions:
  6. Chotikapanich, Duangkamon & Prasada Rao, D.S. & Tang, KamKi, 2006. "Estimating Income Inequality in China Using Grouped Data and the Generalized Beta Distribution," Working Papers RP2006/134, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
    Other versions:
  7. Anderson, Kym & Huang, Jikun & Ianchovichina, Elena, 2004. "Will China's WTO Accession Worsen Rural Poverty?," CEPR Discussion Papers 4196, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  8. Kanbur, Ravi & Zhang, Xiaobo, 2003. "Spatial Inequality in Education and Health Care in China," CEPR Discussion Papers 4136, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  9. Yang, Ling & Lahr, Michael/L, 2008. "Interregiona;Decomposition of labor productivity differences in China, 1987-1997," MPRA Paper 8313, University Library of Munich, Germany. [Downloadable!]
  10. Sylvie Demurger & Jeffrey D. Sachs & Wing Thye Woo & Shuming Bao, Gene Chang & Andrew Mellinger, 2002. "Geography, Economic Policy, and Regional Development in China," NBER Working Papers 8897, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Maasoumi, Esfandiar & Wang, Le, 2006. "Economic Reform, Growth and Convergence in China," Departmental Working Papers 0602, Southern Methodist University, Department of Economics. [Downloadable!]
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  12. Anderson, Kym & Huang, Jikun & Ianchovichina, Elena, 2003. "Long-run impacts of China's WTO accession on farm-nonfarm income inequality and rural poverty," Policy Research Working Paper Series 3052, The World Bank. [Downloadable!]
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