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Are there industrial and agricultural convergence clubs in China?

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  • Jenni Pääkkönen

Abstract

This paper discusses the growth differentials between Chinese provinces geared to agricultural activities and those that have focused on industrial production over three decades of economic reform. Following Hansen and Prescott's (2002) model, we suggest that the differences between regions stem from the resource allocation in place at the beginning of the reform process. We show that provinces with high initial shares of industrial production (the industrial club) have converged, and that agricultural provinces that have shifted to industrial production have been catching up with provinces that were industrialized at the outset. Provinces that have clung to an agricultural strategy (the agricultural club) show no evidence of convergence and appear to have been left behind in terms of economic development.

Suggested Citation

  • Jenni Pääkkönen, 2012. "Are there industrial and agricultural convergence clubs in China?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 10(1), pages 1-13, June.
    • Handle: RePEc:taf:jocebs:v:10:y:2012:i:1:p:1-13
    DOI: 10.1080/14765284.2012.638458
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