IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v47y2013icp16-29.html
   My bibliography  Save this article

Rising Regional Inequality in China: Fact or Artifact?

Author

Listed:
  • Li, Chao
  • Gibson, John

Abstract

China’s local populations can be counted in two ways: people with hukou household registration from each place, and people actually residing in each place. For most of the first three decades of the reform era the hukou count denominated per capita GDP figures. Output and living standards were overstated in coastal provinces and understated in the interior. The distortion grew bigger as the non-hukou migrants increased to over 100 million. Much of the apparent increase in inter-provincial inequality is a statistical artifact caused by this distortion. The recent switch to using the resident count to denominate GDP introduced new distortions.

Suggested Citation

  • Li, Chao & Gibson, John, 2013. "Rising Regional Inequality in China: Fact or Artifact?," World Development, Elsevier, vol. 47(C), pages 16-29.
  • Handle: RePEc:eee:wdevel:v:47:y:2013:i:c:p:16-29
    DOI: 10.1016/j.worlddev.2013.02.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X13000545
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Holz, Carsten A., 2004. "Deconstructing China's GDP statistics," China Economic Review, Elsevier, vol. 15(2), pages 164-202.
    2. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    3. Huang, Jikun & Zhi, Huayong & Huang, Zhurong & Rozelle, Scott & Giles, John, 2011. "The Impact of the Global Financial Crisis on Off-farm Employment and Earnings in Rural China," World Development, Elsevier, vol. 39(5), pages 797-807, May.
    4. Xiaobo Zhang & Kevin Honglin Zhang, 2002. "Regional Inequality," Chapters,in: The Globalization of the Chinese Economy, chapter 8 Edward Elgar Publishing.
    5. Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 87-106, February.
    6. John Gibson & Bonggeun Kim, 2010. "Non-Classical Measurement Error in Long-Term Retrospective Recall Surveys," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 72(5), pages 687-695, October.
    7. LAN, Yuexing & SYLWESTER, Kevin, 2010. "Does the law of one price hold in China? Testing price convergence using disaggregated data," China Economic Review, Elsevier, vol. 21(2), pages 224-236, June.
    8. Robert J. Hill, 2004. "Constructing Price Indexes across Space and Time: The Case of the European Union," American Economic Review, American Economic Association, vol. 94(5), pages 1379-1410, December.
    9. Gregory Chow, 2006. "Are Chinese Official Statistics Reliable?," CESifo Economic Studies, CESifo, vol. 52(2), pages 396-414, June.
    10. Dapeng Hu & Masahisa Fujita, 2001. "Regional disparity in China 1985-1994: The effects of globalization and economic liberalization," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 35(1), pages 3-37.
    11. Gustafsson, Bjorn & Shi, Li, 2002. "Income inequality within and across counties in rural China 1988 and 1995," Journal of Development Economics, Elsevier, vol. 69(1), pages 179-204, October.
    12. Brandt, Loren & Holz, Carsten A, 2006. "Spatial Price Differences in China: Estimates and Implications," Economic Development and Cultural Change, University of Chicago Press, vol. 55(1), pages 43-86, October.
    13. Rawski, Thomas G. & Xiao, Wei, 2001. "Roundtable on Chinese Economic Statistics Introduction," China Economic Review, Elsevier, vol. 12(4), pages 298-302.
    14. Terry Sicular & Yue Ximing & Björn Gustafsson & Li Shi, 2007. "The Urban-Rural Income Gap And Inequality In China," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 93-126, March.
    15. Scharping, Thomas, 2001. "Hide-and-seek: China's elusive population data," China Economic Review, Elsevier, vol. 12(4), pages 323-332.
    16. Jr-Tsung Huang & Chun-Chien Kuo & An-Pang Kao, 2003. "The Inequality of Regional Economic Development in China between 1991 and 2001," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 1(3), pages 273-285.
    17. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," NBER Working Papers 7828, National Bureau of Economic Research, Inc.
    18. Fan, Shenggen & Kanbur, Ravi & Zhang, Xiaobo, 2008. "Regional Inequality In China: An Overview," Working Papers 51157, Cornell University, Department of Applied Economics and Management.
    19. Benjamin, Dwayne & Brandt, Loren & Giles, John, 2005. "The Evolution of Income Inequality in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 53(4), pages 769-824, July.
    20. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
    21. Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2012. "On the Road: Access to Transportation Infrastructure and Economic Growth in China," CEPR Discussion Papers 8874, C.E.P.R. Discussion Papers.
    22. David C. Parsley & Shang-Jin Wei, 1996. "Convergence to the Law of One Price Without Trade Barriers or Currency Fluctuations," The Quarterly Journal of Economics, Oxford University Press, vol. 111(4), pages 1211-1236.
    23. Harry X. Wu, 2007. "The Chinese GDP Growth Rate Puzzle: How Fast Has the Chinese Economy Grown?," Asian Economic Papers, MIT Press, vol. 6(1), pages 1-23, Winter.
    24. Dwayne Benjamin & Loren Brandt & John Giles, 2011. "Did Higher Inequality Impede Growth in Rural China?," Economic Journal, Royal Economic Society, vol. 121(557), pages 1281-1309, December.
    25. Yukon Huang & Alessandro Magnoli Bocchi, 2009. "Reshaping Economic Geography in East Asia," World Bank Publications, The World Bank, number 2590.
    26. Ma, Hengyun & Oxley, Les & Gibson, John, 2009. "Gradual reforms and the emergence of energy market in China: Evidence from tests for convergence of energy prices," Energy Policy, Elsevier, vol. 37(11), pages 4834-4850, November.
    27. Max Lu, 2002. "Forging Ahead and Falling Behind: Changing Regional Inequalities in Post-reform China," Growth and Change, Wiley Blackwell, vol. 33(1), pages 42-71.
    28. Rawski, Thomas G., 2001. "What is happening to China's GDP statistics?," China Economic Review, Elsevier, vol. 12(4), pages 347-354.
    29. Fan, Shenggen & Kanbur, Ravi & Zhang, Xiaobo, 2010. "China’s Regional Disparities: Experience and Policy," Working Papers 57041, Cornell University, Department of Applied Economics and Management.
    30. Kai-yuen Tsui, 2007. "Forces Shaping China'S Interprovincial Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(1), pages 60-92, March.
    31. Masashi Hoshino, 2011. "Measurement of GDP per capita and regional disparities in China, 1979-2009," Discussion Paper Series DP2011-17, Research Institute for Economics & Business Administration, Kobe University, revised Apr 2011.
    32. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1091-1135.
    33. C. Simon Fan & Xiangdong Wei, 2006. "The Law of One Price: Evidence from the Transitional Economy of China," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 682-697, November.
    34. Roberts, Mark & Deichmann, Uwe & Fingleton, Bernard & Shi, Tuo, 2012. "Evaluating China's road to prosperity: A new economic geography approach," Regional Science and Urban Economics, Elsevier, vol. 42(4), pages 580-594.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gluschenko, Konstantin, 2015. "‘Williamson’s Fallacy’ in Estimation of Inter-Regional Inequality," MPRA Paper 71075, University Library of Munich, Germany, revised 03 May 2016.
    2. Elliott, Robert J.R. & Zhou, Ying, 2015. "Co-location and Spatial Wage Spillovers in China: The Role of Foreign Ownership and Trade," World Development, Elsevier, vol. 66(C), pages 629-644.
    3. Ben Westmore, 2017. "Sharing the Benefits of China’s Growth by Providing Opportunities to All," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(03), pages 1-33, October.
    4. Huimin Xu & Hutao Yang & Xi Li & Huiran Jin & Deren Li, 2015. "Multi-Scale Measurement of Regional Inequality in Mainland China during 2005–2010 Using DMSP/OLS Night Light Imagery and Population Density Grid Data," Sustainability, MDPI, Open Access Journal, vol. 7(10), pages 1-31, September.
    5. Kanbur, Ravi & Wang, Yue & Zhang, Xiaobo, 2017. "The Great Chinese Inequality Turnaround," IZA Discussion Papers 10635, Institute for the Study of Labor (IZA).
    6. Chao Li & John Gibson, 2013. "Spatial Price Differences and Inequality in China: Housing Market Evidence," Working Papers in Economics 13/06, University of Waikato.
    7. Chao Li & John Gibson, 2014. "Spatial Price Differences and Inequality in the People's Republic of China: Housing Market Evidence," Asian Development Review, MIT Press, vol. 31(1), pages 92-120, March.
    8. Almås, Ingvild & Johnsen, Åshild Auglænd & Kotsadam, Andreaa, 2014. "Poverty in China Seen from Outer Space," Memorandum 11/2014, Oslo University, Department of Economics.
    9. John Knight, 2014. "Inequality in China: An Overview," World Bank Research Observer, World Bank Group, vol. 29(1), pages 1-19.
    10. repec:bla:jecsur:v:31:y:2017:i:4:p:905-922 is not listed on IDEAS
    11. repec:spr:anresc:v:59:y:2017:i:1:d:10.1007_s00168-017-0818-5 is not listed on IDEAS
    12. Omgba, Luc Désiré, 2015. "Why Do Some Oil-Producing Countries Succeed in Democracy While Others Fail?," World Development, Elsevier, vol. 76(C), pages 180-189.
    13. Felipe, Jesus & Mehta, Aashish & Rhee, Changyong, 2014. "Manufacturing Matters...but It’s the Jobs That Count," ADB Economics Working Paper Series 420, Asian Development Bank.
    14. John Gibson & Chao Li & Geua Boe-Gibson, 2014. "Economic Growth and Expansion of China’s Urban Land Area: Evidence from Administrative Data and Night Lights, 1993–2012," Sustainability, MDPI, Open Access Journal, vol. 6(11), pages 1-16, November.
    15. repec:eee:wdevel:v:96:y:2017:i:c:p:591-598 is not listed on IDEAS
    16. Shi, Yingying & Guo, Shen & Sun, Puyang, 2017. "The role of infrastructure in China’s regional economic growth," Journal of Asian Economics, Elsevier, vol. 49(C), pages 26-41.
    17. Chao Li & John Gibson, 2014. "Agglomeration Economies in China: Locations and Effects," Working Papers in Economics 14/02, University of Waikato.
    18. Jeffrey Zax, 2016. "Provincial valuations of human capital in urban China, inter-regional inequality and the implicit value of a Guangdong hukou," ERSA conference papers ersa16p693, European Regional Science Association.
    19. repec:gam:jsusta:v:9:y:2017:i:4:p:633-:d:96026 is not listed on IDEAS
    20. John Gibson & Chao Li, 2017. "The Erroneous Use Of China'S Population And Per Capita Data: A Structured Review And Critical Test," Journal of Economic Surveys, Wiley Blackwell, vol. 31(4), pages 905-922, September.
    21. Shi, Hao & Huang, Shaoqing, 2014. "How Much Infrastructure Is Too Much? A New Approach and Evidence from China," World Development, Elsevier, vol. 56(C), pages 272-286.
    22. repec:gam:jsusta:v:9:y:2017:i:9:p:1644-:d:112375 is not listed on IDEAS
    23. Chao Li & John Gibson, 2016. "Pareto's Law and City Size in China: Diverging Patterns in Land and People," Working Papers in Economics 16/09, University of Waikato.
    24. Greaney, Theresa M. & Li, Yao, 2017. "Multinational enterprises and regional inequality in China," Journal of Asian Economics, Elsevier, vol. 48(C), pages 120-133.

    More about this item

    Keywords

    inequality; growth; regional development; population; China; Asia;

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:47:y:2013:i:c:p:16-29. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.