Absolute convergence patterns in China: A structural transformation perspective

Chen Cheng, Song Li and Maohua Wu

Economics Letters, 2025, vol. 253, issue C

Abstract: This letter presents the first systematic study of regional economic absolute convergence in China through the lens of structural transformation. Using prefecture-level city data, we find clear evidence of economic convergence, rather than nationwide divergence, although convergence rates vary significantly across regions. Three key mechanisms drive this process: (1) labor reallocation toward cities with more advanced industrial structures, (2) productivity gains resulting from sectoral upgrading in less developed regions, and (3) convergence tendencies observed in both manufacturing and service sectors. While some regions benefit from rapid transformation, others remain caught in persistent growth disparities, reflecting structural barriers and potential “development traps” associated with stalled structural transformation.

Keywords: Absolute convergence; Structural transformation; Panel data (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:253:y:2025:i:c:s0165176525002228

DOI: 10.1016/j.econlet.2025.112385

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