Are there industrial and agricultural convergence clubs in China?
AbstractThis paper discusses growth differentials of Chinese provinces geared to agricultural activities and those focusing on industrial production over three decades of economic reform. Following trade theory and endogenous growth theory, we suggest that the fundamental differences between regions arise from their resource allocations at the start of reforms. Thus, capital-abundant regions have tended to specialize in industrial production, while the labor-abundant regions have concentrated on labor-intensive production (agriculture). Many of China's agricultural provinces suffer from oversupplies of labor, which has led large numbers of people to migrate within the country to work in non-farming sectors of economy. We show that provinces with high shares of industrial production (the industrial club) have converged, and that agricultural provinces shifting to industrial production have been catching up to initially industrialized provinces. Provinces that have stayed with an agricultural strategy (the agricultural club) show no evidence of convergence and appear to have been left behind in terms of economic development.
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Bibliographic InfoPaper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 15/2009.
Length: 28 pages
Date of creation: 21 Oct 2009
Date of revision:
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Phone: + 358 10 831 2268
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growth; agriculture; convergence;
Find related papers by JEL classification:
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- O57 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
This paper has been announced in the following NEP Reports:
- NEP-AGR-2009-10-31 (Agricultural Economics)
- NEP-ALL-2009-10-31 (All new papers)
- NEP-DEV-2009-10-31 (Development)
- NEP-TRA-2009-10-31 (Transition Economics)
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