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Regional Development in China: Interregional Transportation Infrastructure and Regional Comparative Advantage

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  • Lining He

    (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA)

  • Faye Duchin

    () (Department of Economics, Rensselaer Polytechnic Institute, Troy NY 12180-3590, USA)

Abstract

Significant economic disparities among China's Eastern, Central, and Western regions pose unequivocal challenges to social equality and political stability in the country. A major impediment to economic development, especially in the poor, remote Western region, is the shortage of transportation infrastructure. The Chinese government has committed to substantial investment for improving the accessibility of this vast, land-locked region as a mechanism for promoting its development. The paper examines the impacts of the intended transportation infrastructure buildup on the Western region's comparative advantage and its interregional trade. The World Trade Model is extended to represent this investment and applied to determine interregional trade in China based on region-specific technologies, factor endowments and prices, and consumption patterns as well as the capacities and costs of carrying goods among regions using the interregional transportation infrastructure in place in the base year of 1997 and that planned for 2010 and 2020. The model is implemented for 3 regions, 27 sectors, and 7 factors. The results indicate that the planned infrastructure buildup will be cost-effective, will increase benefits especially for the Western region, and that it can conserve energy overall at given levels of demand but substitute oil for coal. Based on these and other model results, some recommendations are offered about strategies for regional development in China.

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Paper provided by Rensselaer Polytechnic Institute, Department of Economics in its series Rensselaer Working Papers in Economics with number 0705.

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Date of creation: May 2007
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Handle: RePEc:rpi:rpiwpe:0705

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  1. Faye Duchin, 2005. "A world trade model based on comparative advantage with m regions, n goods, and k factors," Economic Systems Research, Taylor and Francis Journals, vol. 17(2), pages 141-162.
  2. Anders Hammer Str�mman & Edgar G. Hertwich & Faye Duchin, 2005. "Shifting Trade Patterns as a Means to Reduce Global CO2 Emissions: Implications for the Aluminium Industry," Rensselaer Working Papers in Economics 0508, Rensselaer Polytechnic Institute, Department of Economics.
  3. Faye Duchin, 2003. "Household Lifestyles: Ideas for a Research Program," Rensselaer Working Papers in Economics 0310, Rensselaer Polytechnic Institute, Department of Economics.
  4. Roxana Julia & Faye Duchin, 2005. "World Trade as the Adjustment Mechanism of Agriculture to Climate Change," Rensselaer Working Papers in Economics 0507, Rensselaer Polytechnic Institute, Department of Economics.
  5. Anders Hammer Str�mman & Faye Duchin, 2005. "A World Trade Model with Bilateral Trade Based on Comparative Advantage," Rensselaer Working Papers in Economics 0509, Rensselaer Polytechnic Institute, Department of Economics, revised Jun 2006.
  6. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
  7. Leontief, Wassily, 1977. "The future of the world economy+," Socio-Economic Planning Sciences, Elsevier, vol. 11(3), pages 171-182.
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Cited by:
  1. ince, meltem, 2011. "Financial liberalization, financial development and economic growth: An empirical analysis for Turkey," MPRA Paper 31978, University Library of Munich, Germany, revised 05 May 2011.
  2. Christian Keuschnigg & Peter Egger, 2010. "Innovation, Trade and Finance," University of St. Gallen Department of Economics working paper series 2010 2010-08, Department of Economics, University of St. Gallen.
  3. Astrid Winkler, 2007. "Sheffield City Report," CASE Reports casereport45, Centre for Analysis of Social Exclusion, LSE.

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