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Geography, Economic Policy and Regional Development in China

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Author Info
Sylvie Demurger
Jeffrey D. Sachs
Wing Thye Woo
Shuming Bao
Gene Chang
Andrew Mellinger

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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.

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Paper provided by Harvard - Institute of Economic Research in its series Harvard Institute of Economic Research Working Papers with number 1950.

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Date of creation: 2002
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Handle: RePEc:fth:harver:1950

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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. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  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. Fleisher, Belton M. & Chen, Jian, 1997. "The Coast-Noncoast Income Gap, Productivity, and Regional Economic Policy in China," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 220-236, October. [Downloadable!] (restricted)
  4. Wing Thye Woo, . "Chinese Economic Growth: Sources And Prospects," Department of Economics 96-08, California Davis - Department of Economics. [Downloadable!]
  5. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  6. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
  7. Hong Li & Zinan Liu & Ivonia Rebelo, 1998. "Testing the Neoclassical Theory of Economic Growth: Evidence from Chinese Provinces," Economic Change and Restructuring, Springer, vol. 31(2), pages 117-132, May. [Downloadable!] (restricted)
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  8. Jahangir Aziz & Christoph Duenwald, 2001. "China's Provincial Growth Dynamics," Development and Comp Systems 0012004, EconWPA. [Downloadable!]
  9. Francoise Lemoine, 2000. "FDI and the Opening Up of China's Economy," Working Papers 2000-11, CEPII research center. [Downloadable!]
  10. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University. [Downloadable!]
  11. Jahangir Aziz & Christoph Duenwald, 2001. "China's Provincial Growth Dynamics," IMF Working Papers 01/3, International Monetary Fund. [Downloadable!]
  12. Tao Zhang & Heng-fu Zou, 1996. "Fiscal decentralization, public spending, and economic growth in China," Policy Research Working Paper Series 1608, The World Bank. [Downloadable!]
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  13. 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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  14. Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March. [Downloadable!] (restricted)
  15. 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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  1. Wing Woo, 2004. "Some Fundamental Inadequacies of the Washington Consensus: Misunderstanding the Poor by the Brightest," Development and Comp Systems 0411021, EconWPA. [Downloadable!]
  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. 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.
  5. 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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  6. 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)
  7. Russell Pittman, 2002. "Chinese Railway Reform and Competition: Vertical or Horizontal Restructuring?," Development and Comp Systems 0204004, EconWPA. [Downloadable!]
  8. 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!]
  9. 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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  10. 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!]
  11. Laura Solanko, 2003. "An empirical note on growth and convergence across Russian regions," Macroeconomics 0308005, EconWPA. [Downloadable!]
  12. 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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  13. Zhao Chen & Yu Jin & Ming Lu, 2005. "Economic Opening and Industrial agglomeration in China," Industrial Organization 0511012, EconWPA. [Downloadable!]
  14. 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)
  15. 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!]
  16. Wing Woo, 2004. "Some Fundamental Inadequacies of the Washington Consensus: Misunderstanding the Poor by the Brightest," Development and Comp Systems 0411020, EconWPA. [Downloadable!]
  17. Boyreau-Debray, Genevieve, 2003. "Financial intermediation and growth - Chinese style," Policy Research Working Paper Series 3027, The World Bank. [Downloadable!]
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