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Continental Drift: China and the Global Economic Crisis


  • Sangaralingam Ramesh

    () (Department of Economics, SOAS, University of London, UK)


The economic prosperity associated with the Coastal regions of China has not 'trickled' down to the Western and Central regions sufficiently enough to eliminate the disparities in income between the regions. Indeed, the disparities between China's Coastal regions and its other regions continue to deepen. In the Mao period, central planners held the mistaken belief that investment in the railways and development of heavy industry in the interior parts of China would bring prosperity. In the reform period and beyond, the focus of economic development in China has been to take advantage of China's low labour costs. In the earlier part of the reform era the focus of economic reforms centred on the development of Special Economic Zones (SEZ's). In the second phase of reform policies were centred on the High Technology Development Zones [NHTIDZ's].A characteristic feature of both SEZ's and NHTIDZ's is that they represent a concentration of infrastructure within a predefined spatial area. The current global economic crisis has presented China with a unique opportunity to deepen the economic transformation of the coastal regions by shifting the focus of economic development to its interior regions. Indeed, the government's efforts to stave off the effects of the global crisis on the Chinese economy by attempting to maintain economic growth above 8% by utilising an expansive fiscal stimulus has had the effect of initiating the transformation of the interior Chinese economy. This then represents China’s third stage of economic development since 1949. This paper will examine the factors leading to China’s third stage of economic development which has resulted from the global economic crisis-the Continental drift of the economic development of China.

Suggested Citation

  • Sangaralingam Ramesh, 2010. "Continental Drift: China and the Global Economic Crisis," Working Papers 165, Department of Economics, SOAS, University of London, UK.
  • Handle: RePEc:soa:wpaper:165

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    More about this item


    Income disparity; Infrastructure; Knowledge Creation; Global Economic Crisis; China;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes


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