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The Impacts of Structural Transformation and Industrial Upgrading on Regional Inequality in China

Author

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  • Tsun Se Cheong

    (University of Western Australia)

  • Yanrui Wu

    (University of Western Australia)

Abstract

China has achieved unprecedented success in economic growth since the initiation of economic reforms. The high growth could partly be attributed to the success in structural transformation of the economy. Another contributing factor may be the industrial upgrading of the manufacturing sector towards high value-added products. However, regional inequality in China has increased considerably behind the scenes. In order to have sustainable economic growth, it is thus crucial to investigate both the impacts of structural transformation and industrial upgrading on regional inequality. This paper contributes to the literature in the analysis of the structural transformation by employing a database at the county-level. Decompositions are performed for different spatial groupings so as to provide a clear view of evolution of regional inequality. In addition, the contributions of the major industries to inequality in industrialization are examined by using a database of value-added at the provincial level. The results may have important policy implications for the formulation of a comprehensive and coherent strategy in managing inequality while promoting structural transformation and industrial upgrading.

Suggested Citation

  • Tsun Se Cheong & Yanrui Wu, 2014. "The Impacts of Structural Transformation and Industrial Upgrading on Regional Inequality in China," Economics Discussion / Working Papers 14-09, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:14-09
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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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