Geography, Economic Policy, and Regional Development in China

Sylvie Démurger (), Jeffrey D. Sachs, Wing Woo (), Shuming Bao, Gene Chang and Andrew Mellinger
Additional contact information
Jeffrey D. Sachs: Center for International Devlopment (CID) Harvard University
Shuming Bao: China Data Center University of Michigan
Gene Chang: Economics Department University of Toledo
Andrew Mellinger: Center for International Development Harvard University

Asian Economic Papers, 2002, vol. 1, issue 1, pages 146-197

Abstract: Many studies of regional disparity in China have focused on the preferential policies received by the coastal provinces. We decomposed the location dummies in provincial growth regressions to obtain estimates of the effects of geography and policy on provincial growth rates in 1996-99. Their respective contributions in percentage points were 2.5 and 3.5 for the province-level metropolises, 0.6 and 2.3 for the northeastern provinces, 2.8 and 2.8 for the coastal provinces, 2.0 and 1.6 for the central provinces, 0 and 1.6 for the northwestern provinces, and 0.1 and 1.8 for the southwestern provinces. Because the so-called preferential policies are largely deregulation policies that have allowed coastal Chinese provinces to integrate into the international economy, it is far superior to reduce regional disparity by extending these deregulation policies to the interior provinces than by re-regulating the coastal provinces. Two additional inhibitions to income convergence are the household registration system, which makes the movement of the rural poor to prosperous areas illegal, and the monopoly state bank system that, because of its bureaucratic nature, disburses most of its funds to its large traditional customers, few of whom are located in the western provinces. Improving infrastructure to overcome geographic barriers is fundamental to increasing western growth, but increasing human capital formation (education and medical care) is also crucial because only it can come up with new better ideas to solve centuries-old problems like unbalanced growth. Copyright (c) 2002 Center for International Development and the Massachusetts Institute of Technology.

Date: 2002
View citations in EconPapers

Downloads: (external link)
http://www.mitpressjournals.org/doi/pdfplus/10.1162/153535102320264512 link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Geography, Economic Policy and Regional Development in China (2002)
Working Paper: Geography, Economic Policy, and Regional Development in China (2002)
Working Paper: Geography, Economic Policy and Regional Development in China (2001)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:tpr:asiaec:v:1:y:2002:i:1:p:146-197

Ordering information: This journal article can be ordered from
http://www.mitpressjournals.org/loi/asep

Access Statistics for this article

Asian Economic Papers is edited by Jeffrey D. Sachs, Yunjong Wang and Wing Thye Woo

More articles in Asian Economic Papers from MIT Press
Series data maintained by Christopher F. Baum ().