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Opening up, Market Reform, and Convergence Clubs in China

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  • Rui Hao

Abstract

This paper evaluates the relationship between initial government policies and the emergence of convergence clubs in post-reform China. We test the structural stability of a global convergence equation using China's provincial data over the period 1985-2000. We find that the provinces cluster around two basins of attraction defined by initial opening-up. Domestic market reform exerts a positive and significant influence on provincial economic growth but has no threshold effect. The two convergence clubs exhibit strikingly different growth behaviors, suggesting that the roles of some growth-promoting factors, such as human capital and infrastructure, depend on whether an openness threshold is passed. Copyright 2008 The Author. Journal compilation 2008 East Asian Economic Association and Blackwell Publishing Ltd.

Suggested Citation

  • Rui Hao, 2008. "Opening up, Market Reform, and Convergence Clubs in China ," Asian Economic Journal, East Asian Economic Association, vol. 22(2), pages 133-160, June.
  • Handle: RePEc:bla:asiaec:v:22:y:2008:i:2:p:133-160
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    Cited by:

    1. José Villaverde & Adolfo Maza, 2012. "Chinese per Capita Income Distribution, 1992–2007: A Regional Perspective," Asian Economic Journal, East Asian Economic Association, vol. 26(4), pages 313-331, December.
    2. Cheong, Tsun Se & Wu, Yanrui, 2013. "Regional disparity, transitional dynamics and convergence in China," Journal of Asian Economics, Elsevier, vol. 29(C), pages 1-14.

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