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Convergence or divergence? Debate on China's regional development

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Yingqi Wei
Xiaming Liu

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Abstract

This paper investigates the evolution of regional disparity over the period 1980-2001, reviews the debate on its causes, discusses future development strategies, and draws relevant conclusions for policymakers. Our study confirms that overall regional disparity declined in the 1980s but increased in the 1990s. The gap between the inland and coastal regions was the dominant contributor to the overall regional disparity. There was no club convergence within the inland and coastal regions. Economic, geographical and historical factors put the coast in a better position than the inland for growth. Regional development strategies and policies, globalisation and economic liberalisation, and factor market distortions, which are closely linked with each other, have played an important role in regional disparity. It will be a long-term task to significantly reduce regional disparity. The Chinese central government needs to (1) allow a similar degree of openness and economic liberalisation across regions; (2) work out detailed procedures to remove barriers to the movement of factors of production; (3) provide industrial development guidelines; and (4) help the establishment of better infrastructure in the inland and especially the west, and encourage resource allocation based on comparative advantages

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Paper provided by Lancaster University Management School, Economics Department in its series Working Papers with number 000245.

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Date of creation: 2004
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Handle: RePEc:lan:wpaper:000245

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  5. Song, Shunfeng & Chu, George S. -F. & Chao, Rongqing, 2000. "Intercity regional disparity in China," China Economic Review, Elsevier, vol. 11(3), pages 246-261. [Downloadable!] (restricted)
  6. Herrmann-Pillath, Carsten & Kirchert, Daniel & Pan, Jiancheng, 2002. "Disparities in Chinese economic development: approaches on different levels of aggregation," Economic Systems, Elsevier, vol. 26(1), pages 31-54, April. [Downloadable!] (restricted)
  7. 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)
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  10. Chen, Aimin, 2002. "Urbanization and disparities in China: challenges of growth and development," China Economic Review, Elsevier, vol. 13(4), pages 407-411, December. [Downloadable!] (restricted)
  11. Dagum, Camilo, 1997. "A New Approach to the Decomposition of the Gini Income Inequality Ratio," Empirical Economics, Springer, vol. 22(4), pages 515-31.
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  17. Renard, Mary-Francoise, 2002. "A pessimistic view on the impact of regional inequalities," China Economic Review, Elsevier, vol. 13(4), pages 341-344, December. [Downloadable!] (restricted)
  18. Stéphane Mussard & Françoise Seyte & Michel Terraza, 2003. "Decomposition of Gini and the generalized entropy inequality measures," Economics Bulletin, Economics Bulletin, vol. 4(7), pages 1-6. [Downloadable!]
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