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Balance through Agglomeration: A Race between Geography and Policy in China's Regional Development

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  • Yali Liu
  • Ming Lu
  • Kuanhu Xiang

Abstract

Changes in regional income gaps in China reflect the role of both the market and the government in the Chinese economy. Since 2003, government policies have aimed to distribute more resources to less developed areas. Although this process is accompanied by a narrowing interregional income gap, it does not represent real “convergence” between regions. From the perspective of spatial–political economics, the free movement of people is helpful to realize regional economic balance through agglomeration, while investment policies that deviate from the comparative advantage of less developed regions may lead to spatial misallocation of resources and unsustainable economic growth. In order to achieve further integration and development in the Chinese economy in the future, restrictions to the flow of production factors must be alleviated so that the market can truly become a decisive force for the allocation of resources.

Suggested Citation

  • Yali Liu & Ming Lu & Kuanhu Xiang, 2018. "Balance through Agglomeration: A Race between Geography and Policy in China's Regional Development," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(6), pages 72-96, November.
    • Handle: RePEc:bla:chinae:v:26:y:2018:i:6:p:72-96
    DOI: 10.1111/cwe.12262
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    References listed on IDEAS

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    1. Ming Lu & Kuanhu Xiang, 2016. "Great Turning: How Has the Chinese Economy Been Trapped in an Efficiency-and-Balance Tradeoff?," Asian Economic Papers, MIT Press, vol. 15(1), pages 25-50, Winter/Sp.
    2. Liang, Wenquan & Lu, Ming & Zhang, Hang, 2016. "Housing prices raise wages: Estimating the unexpected effects of land supply regulation in China," Journal of Housing Economics, Elsevier, vol. 33(C), pages 70-81.
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    Cited by:

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    2. Ning Jia & Huiyong Zhong, 2022. "The Causes and Consequences of China's Municipal Amalgamations: Evidence from Population Redistribution," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(4), pages 174-200, July.
    3. Zhipeng Gao & Zhenyu Wang & Mi Zhou, 2023. "Is China’s Urbanization Inclusive?—Comparative Research Based on Machine Learning Algorithms," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    4. Hongwei Xu & Wenquan Liang & Kuanhu Xiang, 2022. "The Environmental Consequences of Place‐Based Policies in China: An Empirical Study Based on SO2 Emission Data," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(4), pages 201-229, July.
    5. Scott Rozelle & Yiran Xia & Dimitris Friesen & Bronson Vanderjack & Nourya Cohen, 2020. "Moving Beyond Lewis: Employment and Wage Trends in China’s High- and Low-Skilled Industries and the Emergence of an Era of Polarization," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(4), pages 555-589, December.
    6. Pengfei Li & Ming Lu, 2021. "Urban Systems: Understanding and Predicting the Spatial Distribution of China's Population," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 29(4), pages 35-62, July.
    7. Hongjun Sun & Zuoxiang Zhao & Ding Han, 2024. "Growth Models and Influencing Mechanisms of Total Factor Productivity in China’s National High-Tech Zones," Sustainability, MDPI, vol. 16(8), pages 1-19, April.
    8. Xu, Mengmeng & Tan, Ruipeng & He, Xinju, 2022. "How does economic agglomeration affect energy efficiency in China?: Evidence from endogenous stochastic frontier approach," Energy Economics, Elsevier, vol. 108(C).

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