Regional resilience in China: The response of the provinces to the growth slowdown

Anping Chen and Nicolaas Groenewold
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Nicolaas Groenewold: Economics Discipline, Business School, University of Western Australia, http://www.web.uwa.edu.au/person/nicolaas.groenewold

No 20-15, Economics Discussion / Working Papers from The University of Western Australia, Department of Economics

Abstract: Since 2007 China’s real GDP growth rate has slowed from a level of over 10% per annum to below 7%. Given China’s regional diversity, an important aspect of the slowdown is the possible spatial variation in its experience. This is the issue we consider in this paper and we analyse this question in the context of the regional economic resilience framework. We proceed in two stages. In the first we analyse a measure of provincial slowdown (a sensitivity index) and of the variability of the slowdown based just on growth rates and examine the correlation of these measure with a number of commonly-used provincial characteristics. In the second stage we decompose regional growth rates into national and province-specific components using a VAR model and argue that since resilience concerns the response of provinces to a national shock, it is properly analysed using just the national component of the growth rate rather than the growth rate as such. We therefore analyse a sensitivity index and a variability index based just on the national component of growth and find that this extension is important both for ranking provinces according to resilience and for correlations of resilience with determinants capturing provincial characteristics. Generally we find that provinces close to the coast with new- rather than old-industry structures are less resilient and tended to suffered greater variability in growth during the slowdown.

Keywords: China; growth; provincial growth; provincial response; regional resilience (search for similar items in EconPapers)
JEL-codes: E37 O47 O53 R12 R15 (search for similar items in EconPapers)
Pages: 45
Date: 2020
New Economics Papers: this item is included in nep-cna, nep-geo, nep-isf, nep-mac, nep-tra and nep-ure
Note: MD5 = 26523082077df6f53d650112d2c53a65
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Related works:
Journal Article: Regional Resilience in China: The Response of the Provinces to the Growth Slowdown (2022)
Working Paper: Regional resilience in China: The response of the provinces to the growth slowdown (2019)
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