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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.

Suggested Citation

  • Lining He & Faye Duchin, 2007. "Regional Development in China: Interregional Transportation Infrastructure and Regional Comparative Advantage," Rensselaer Working Papers in Economics 0705, Rensselaer Polytechnic Institute, Department of Economics.
    • Handle: RePEc:rpi:rpiwpe:0705
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    References listed on IDEAS

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    1. Sylvie Démurger & Jeffrey D. Sachs & Wing Thye Woo & Shuming Bao & Gene Chang & Andrew Mellinger, 2002. "Geography, Economic Policy, and Regional Development in China," Asian Economic Papers, MIT Press, vol. 1(1), pages 146-197.
    2. Faye Duchin, 2005. "A world trade model based on comparative advantage with m regions, n goods, and k factors," Economic Systems Research, Taylor & Francis Journals, vol. 17(2), pages 141-162.
    3. Anders Hammer Strømman & Faye Duchin, 2006. "A world trade model with bilateral trade based on comparative advantage," Economic Systems Research, Taylor & Francis Journals, vol. 18(3), pages 281-297.
    4. Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
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    6. Anders Hammer Strømman & 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.
    7. Faye Duchin, 2003. "Household Lifestyles: Ideas for a Research Program," Rensselaer Working Papers in Economics 0310, Rensselaer Polytechnic Institute, Department of Economics.
    8. 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.
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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. Zhou, Guanghui & Chung, William & Zhang, Xiliang, 2013. "A study of carbon dioxide emissions performance of China's transport sector," Energy, Elsevier, vol. 50(C), pages 302-314.
    3. repec:bla:presci:v:96:y:2017:i:2:p:281-298 is not listed on IDEAS
    4. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    5. Batabyal, Amitrajeet A. & Beladi, Hamid, 2015. "Knowledge goods, ordinary goods, and the effects of trade between leading and lagging regions," Research Policy, Elsevier, vol. 44(8), pages 1537-1542.
    6. Chung, William & Zhou, Guanghui & Yeung, Iris M.H., 2013. "A study of energy efficiency of transport sector in China from 2003 to 2009," Applied Energy, Elsevier, vol. 112(C), pages 1066-1077.
    7. Yang Zhou & Ning Li & Wenxiang Wu & Haolong Liu & Li Wang & Guangxu Liu & Jidong Wu, 2014. "Socioeconomic development and the impact of natural disasters: some empirical evidences from China," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 74(2), pages 541-554, November.
    8. Fu, Xue & Lahr, Michael & Yaxiong, Zhang & Meng, Bo, 2017. "Actions on climate change, Intended Reducing carbon emissions in China via optimal industry shifts: Toward hi-tech industries, cleaner resources and higher carbon shares in less-develop regions," Energy Policy, Elsevier, vol. 102(C), pages 616-638.
    9. Xu, Bin & Lin, Boqiang, 2015. "How industrialization and urbanization process impacts on CO2 emissions in China: Evidence from nonparametric additive regression models," Energy Economics, Elsevier, vol. 48(C), pages 188-202.
    10. Yang Zhou & Ning Li & Wenxiang Wu & Jidong Wu & Xiaotian Gu & Zhonghui Ji, 2013. "Exploring the characteristics of major natural disasters in China and their impacts during the past decades," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 69(1), pages 829-843, October.

    More about this item

    JEL classification:

    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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