Analysis on the Regional Disparity in China and the Influential Factors

Transcription

1 Amercan Internatonal Journal of Humantes and Socal Scence Vol. 2 No. 4; August 2016 Analyss on the Regonal Dsparty n Chna and the Influental Factors Fe Wang School of Publc Polcy and Management Tsnghua Unversty Bejng, P.R.Chna Abstract Regonal ncome dsparty s one of the crucal ssue faced by Chna n ts medum and long term development, t s also a core problem to be solved wth full effort to acheve coordnated regonal development. Ths paper s devoted to analyze regonal ncome dspartes n Chna from 1978 to Snce Chna began ts reform and openng up, nter-provncal dspartes have experenced a process of narrowng frst and then expandng. But ths expansve trend of nter-provncal ncome dspartes has slowed down and began to decrease somewhat around 2000, and the ncome dsparty between the regons has kept a narrowng trend snce Usng provncal economc growth data, we analyze the changes of Chna s economc growth pattern snce reform and openng up and nvestgate man factors nfluencng regonal economc growth and regonal dspartes. 1. Introducton Keywords: Income dsparty, Regonal economy, Regonal polcy, Thel ndex Chna s a large developng country wth huge populaton and tremendous sze of terrtory, the natural endowments, economc and socal condtons of varous regons dffer greatly, therefore, regonal mbalance becomes the basc natonal condton of Chna. Regonal ncome dsparty s one of the crucal ssue faced by Chna n ts medum and long term development, t s also a core problem to be solved wth full effort to acheve coordnated regonal development. Many lteratures had studed the trend of change of nequalty of Chna s regons. Most studes dscovered that Chna s regonal dsparty measured n terms of GDP per capta declned sgnfcantly from , whch was the frst stage of Chna s reform and openng (Jan, Sachs and Warner, 1996; Hu and Wang, 1996; Dayal-Gulat and Husan, 2000; K, Feng and Hou, 2004). Many of these above studes recognzed that ths was manly due to the per capta output of rural area n ths ntal stage was lower than the natonal average, and the rural reform n ths stage had promoted greatly the growth of agrcultural producton, therefore, the underdeveloped rural regon were benefted much more from the reform. There s emergence of trend of contnuous regonal dsparty of Chna snce 1990s (Wang and Fan, 2004; Kanbur and Zhang, 2005). Ths s manly due to the ncrease of dsparty between the coastal area and provnces (ncludng autonomous regons) n the hnterland. Snce the year 2000, although there s stll growth of dspartes among four regons 1, the rate of ncrease becomes relatvely smooth and there s decrease of regonal dsparty to certan extent after the year 2004 (Xu and L, 2006). Lu (2009) fnds that the performance of the Western Development Strategy accelerates economc growth rate of Western regon about 1.5 percentages n average every year snce the year 2000, and t makes Chna s regonal economy from dvergence to convergence. Researchers generally beleve that geographc, nsttutonal and some other factors have played mportant roles n changes of Chna s regonal ncome dspartes snce Chna s reform and openng up. Wang and Fan (2004) dscover that FDI, governmental transfer payment, labor mgraton have affected the changng of Chna s regonal dspartes. Wang and Fan (2005) consder that the unequal educaton opportunty s one of the key factors leadng to Chna s regonal dspartes. * Supported by Chna Postdoctoral Scence Foundaton (Grant No.2015M581051) 1 Note: It refers the classfcaton of Chna s regon nto Eastern, North-eastern, Central and Western regon. 94

2 Center for Global Research Development Peng and Lu (2010) show that the man reason for the rapd expanson of Chna s regonal dspartes between the Eastern, Central and Western s due to the mplementaton of the unbalanced regonal development strategy snce Chna's reform and openng up, and also due to the dfference of the natural condtons and geographcal locaton. Huang (2013) emphaszes the role of nsttutonal factors n the growth of regonal economy. The economc development and nsttutonal changes n coastal areas have entered nto a vrtuous cycle of nteractve growth pattern, whle the nsttutonal varables n the Central and Western regons are stll relatvely low. Accordngly, the Eastern coastal areas have a hgher level of economc development than the central and western regons (Huang, 2013). Ths paper proceeds as follows: Secton 2 ntroduces the methodology and ndcators used n ths paper. Secton 3 descrbes the trend of nter-provncal ncome dsparty n Chna from 1978 to Secton 4 analyses the factors of nter-provncal ncome dsparty. Conclusons and polcy mplcaton are derved n Secton Date and Methods There are many ndcators reflectng regonal ncome, and the followng three ndexes are adopted to measure Chna s regonal dspartes n ths paper: GDP per capta, urban household dsposable ncome per capta and rural household net ncome per capta. GDP per capta s the most frequently used ndcator that reflects certan regon s economc development level. Compared wth other ndexes, tme seres of GDP per capta are avalable systematcally. Household ncome s the man determnant of household lvng standards and qualty of lfe, whch can drectly reflect the welfare enjoyed by household. In Chna, household ncome s measured by urban household dsposable ncome per capta and rural household net ncome per capta. The data of household ncome come from by household survey teams of Natonal Bureau of Statstcs. Thel ndex are appled to research the trend and the stage of Chna s nter-provncal ncome dsparty from the 1978 to Followng Thel (1967), t s computed as follows: Thel _ T log (1) p Where P s the GDP share of regon and s the populaton share of regon. For equal per capta GRDPs,.e., wth GRDPs proportonal to regonal populatons, ths ndex takes a value of 0. For a case where regon log PP P produces the entre GDP, Thel becomes,where P s total populaton of the country, and s the populaton of regon. Note here that as the populaton share of regon goes down, Thel rses f regon produces the entre GDP. Smlar to the Thel _ T ndex, we can compute the Thel _ L ndex, whch use the populaton share as weght, and gan the followng formula (2): p Thel _ L p log (2) Suppose that the regons are grouped nto mutually exclusve and collectvely exhaustve groups and each group can be dvded by several small sub-regons. The Thel ndex can be decomposed nto wthn-group and betweengroup components as follows: I I n p p j Thel _ L p log p pj log LB LW 1 1 j 1 j (3) Where the meanngs of p and y are the same as above, I s the number of groups, P j s populaton share of subregon j n group, y s GDP share of sub-regon j n group, L B s the between-group component of the Thel ndex L and measures the extent of nequalty due solely to dfferences n the group mean per capta GDP. L W s the wthn-group component of the Thel ndex L and s defned by a weghted average of wthn-group Thel n ndces L = p log p wth the weghts beng the populaton shares of the groups P j. j 1 j j j 3. The trend and Spatal decomposton of nter-provncal ncome dsparty Chnese central government dvdes 31 provnces nto four regons n Eleventh Fve-Year Plan ( ), whch are Eastern, Central, Western, and Northeastern regons (Fgure 1). 95

3 Amercan Internatonal Journal of Humantes and Socal Scence Vol. 2 No. 4; August 2016 Four-regon dvson s much reasonable wthn current regonal economc pattern, and ntra-regonal dspartes are relatvely trval. More mportantly, t helps the central government to develop correspondng regonal development strategy and polces. Therefore, we analyze regonal dspartes based on four regons. In order to explore the spatal dstrbuton of nter-provncal dspartes n Chna, group decomposton technque s appled n the followng analyss. The Thel ndex of nter-provncal dsparty wth four regons can be decomposed nto components of ntra-regon and nter-regon. The result shows that the dsparty among provnces and autonomous regons s caused frstly by the dsparty among four regons, the second cause s the nternal dsparty of Eastern Regon (Fgure 2). The declne of regonal ncome dsparty of Chna n the perod from 1978 to 1990 s manly due to the sgnfcant declne of nternal dsparty of Eastern Regon, and the contrbuton of nternal dsparty of Eastern Regon has been decreased from 64.7% n 1978 to 40.7% n 1990 (Table 1). In the frst half of 1990s, the further expanson of dspartes between Eastern regon and other regons aggravated regonal nequalty of the whole country. GDP per capta of Eastern regon had been ncreased acceleratvely n the early 1990 s, whch was obvously hgher than that of Central, Western, and Northeastern regons. Dsparty among four regons accounted for nter-provncal dspartes were ncreased from 22.4% n 1978 to 57% n 1996 (Table 1). After enterng the 21st century, the expandng rate of regonal dspartes had been slowed down. The share of dspartes among four regons accounted for nter-provncal was decreased from 57% n 1996 to 54.4% n Snce 2004, the share of dspartes among four regons to overall dsparty sharply decreased from 54.4% n 2004 to 37.4% n The dspartes of GDP per capta between Eastern Regon and non-eastern regons gradually reduced. The ratos of GDP per capta n Central and Western Regons to Eastern Regon rose from 44% and 39% n 2004 to 57% and 56% n 2014 respectvely. Also, there was a sgnfcant trend of ncreasng nternal dspartes of Western Regon. The share of Western s nternal dspartes to overall dsparty ncreased from 13.2% n 2004 to 24.6% n 2014, whch was much hgher than that of other regons. For example, GDP per capta of Inner Mongola was yuan n 2014, whch was one of top ten of the country, whle GDP per capta of Tbet, Gansu, Yunnan and Guzhou were less than yuan whch was at the lower sde. 4. The factor analyss of nter-provncal ncome dsparty The change of regonal ncome dsparty can be caused by the dfference of regonal economc growth rate. Usng provncal economc growth data, we wll analyze the changes of Chna s economc growth pattern snce reform and openng up and nvestgate man factors nfluencng regonal economc growth and regonal dspartes n ths secton. 4.1 Changes n patterns of regonal growth and nter-provncal ncome dsparty Accordng to the four perod of the change of regonal ncome dsparty based on the calculaton results of Thel ndex above, ths secton wll analyze the changes of Chna s economc growth pattern from 1978 to 2014 and ts mpact on nter-provncal ncome dsparty. In Fgure 3, t can be seen that the growth rates of GDP per capta of Chna s four Regons are sgnfcantly dfferent at each perod. The frst perod s 1978 to Fg.4 s desgned to show the growth pattern of Chna s regons n ths stage. Chna had entered a new perod of soco-economc development n late 1970s n the mplementaton of reform and openng to the outsde world under the leadershp of Deng Xaopng. The major ssue of regonal development at that tme was to promote development through expanson of openng. Four specal economc zones (SEZ) were set up n 1980 along the coastal area. Fourteen coastal ctes were opened to the outsde world n 1984, there were further openng of some coastal economc zones n Yangtze Rver Delta, the Pearl Rver Delta, Laodong Pennsula etc. A coastal open area extendng from the south to the north of Chna along the coast lne was formed, whch shared a serous of specal preferental polces n fnance, taxaton, nvestment and so on. Snce then, the Sxth Fve-Year Plan ( ) has mplemented a non-balanced development strategy whch has greatly promoted the development of coastal areas that had advantageous geographcal superorty and a better economc foundaton, so that the economc growth rate of Eastern Regon was n the natonal leadng level. From 1978 to 1990, the Eastern Regon s captal constructon nvestment accounted for 53.5% of the whole naton. 96

4 Center for Global Research Development In ths case, the average growth rate of economc development n the Eastern Regon was hgher than n other regons, especally for the coastal provnces such as Guangdong, Zhejang, Jangsu, Fujan etc., economc growth rate of those provnces was n top 5 n Chna (Fgure 4). In 1978, among ten provnces n the Eastern Regon, there were only Bejng, Tanjn, and Shangha Muncpalty wth relatvely hgher GDP per capta. Shangha had the hghest GDP per capta of the Eastern whch was up to 2498 Yuan, n contrast to Fujan provnce whch had the lowest GDP per capta n ths regon only 1/9 of that of Shangha. After the reform and openng up, the nternal dspartes were reduced n the Eastern Regon. Analyzng comparatvely, most of the Central and Western provnces and autonomous regons had growth rates lower than the natonal average. Ths resulted drectly n wdenng dspartes wth the Eastern Regon. It s shown clearly that a large part of provnces and autonomous regons of the Central and Western provnces and autonomous regons s located n the left- lower part (wth lower ncome and lower growth rate) of Fgure 4. The second perod s the frst half of 1990s. Chna s reform and openng up had sgnfcant effect on propellng economc growth of the Eastern Regon that has hgher GDP per capta and growth rate than other regons. The growth rate n Eastern Regon was 3-5 percentage pont hgher than other regons that s shown s Fgure 5. Fgure 8 shows the growth pattern of Chna s regon n the perod of It can be seen n Fgure 5 that the trend of Eastern provnces concentratng n rght-upper part (wth hgher ncome and hgher growth rate) compared wth Fgure 4. Ths ndcated that the level of economc development as whole n the Eastern Regon had been mproved and ts nternal dspartes was sgnfcantly reduced compared wth the frst stage.whle many provnces and autonomous regons of Western and Central Regons are located n left-lower part (wth lower ncome and lower growth rate). Ths resulted the wdenng regonal dspartes n Chna. The thrd perod s from 1996 to In ths perod, n order to prevent the wdenng trend of nter-provncal dspartes, Chna s regonal strategy had been swtched from unbalanced regonal strategy snce reform and openng to coordnated regonal development strategy by the Central government. In 1995, the government ponted out clearly that one of the mportant polces must be carred out n the next 15 years was adherng to coordnate development of regonal economy and gradually narrowng the gap of development of regons. The Central government decded to mplement the Western Development Strategy n Revtalzaton of Northeastern old ndustral bases and Plan of Rse of Central Chna were successvely mplemented snce Western Development Strategy n the begnnng of ths century. The reform of the economc system of less developed regons had been accelerated, and the support of government to non-eastern regons had been ncreased. To narrow the regonal dfference and promote the regonal coordnated development became the fundamental prncple of establshng regonal polces. The overall regonal development strategy of four regons had been formed. These measures of regonal polces had greatly supported rapd economc growth n Western Regon, whch can be shown n Fgure 6, a part of provnces and autonomous regons are located n left-upper part of ths fgure wth hgher growth rate of GDP per capta. Although Eastern Regon s GDP per capta and growth rate was stll at the upper level of the country, the rates of economc growth of some low-ncome Western provnces and autonomous regons such as Inner Mongola, Shanx, Shaanx and Tbet had been mproved sgnfcantly, even some of them were hgher than the average growth rate of Eastern Regon. The fourth perod s from 2004 to Some new features are emerged n the Chnese economy n ths perod, one s accerelated development of heavy and chemcal ndustres, the second s the rapd rse of cost of factors of producton such as labor force, land and ecologcal envronment, the thrd s large declne of external demand caused by nternatonal fnancal crss, the development of Chnese economy has focused more on the pull of domestc demand. The new pattern of regonal economy formed n ths perod s caused by the supermposton of the mplementaton of overall regonal development strategy of four blocks wth the new features of economc structure. Comparson of the regonal growth pattern from 2004 to 2014 wth those of former 3 perods, the number of provnces and autonomous regons (most of them were n Western and Central Regons before) n leftlower part (wth lower ncome and lower growth rate) was decreased, and the number of non-eastern regons (such as Inner Mongola, Laonng) n rght-upper part (wth hgher ncome and hgher growth rate) was ncreased (Fgure 7). The growth rates of Inner Mongola, Shaanx and Guzhou whch had abundant resources of Western Regon n the top level. That ndcates the growth rate of non-eastern Regons was hgher n ths perod than those n former 3 perods. 97

5 Amercan Internatonal Journal of Humantes and Socal Scence Vol. 2 No. 4; August 2016 On the contrary, the Eastern Regon experenced a slowng growth rate after Wth the rsng cost of labor force and the declne of export demand caused by nternatonal fnancal crss, the labor-ntensve ndustres n Eastern areas whch had hgh degree of external dependence entered nto the bottlenecks of development and gradually shfted toward Central and Western areas. Also, more and more non-eastern regons can drectly partcpate n the nternatonal producton and labor dvson n the background of constant deepenng of the reform and openng-up. The proporton of Guangdong s exports n the natonal total amount decreased from 40% n 2000 to 30% n Fgure 3 shows that the growth rates of GDP per capta of Central, Western and Northeastern regon from 2004 to 2014 are hgher than that of Eastern Regon. Wth the relatvely rapd growth of less developed regons and economc slowdown of Eastern regon caused sgnfcant decreasng of regonal dspartes n Chna durng 2004 to Changes n patterns of regonal growth and nter-provncal ncome dsparty The above analyss shows that, snce Chna began ts reform and openng up, nter-provncal dspartes have experenced a process of narrowng frst and then expandng, and snce 2004 the ncome dsparty between the regons has been narrowed. The dspartes of economc growth rates among regons were affected by the changes of domestc economc envronment, the regon polces and other factors. In order to further our understandng of changes n regonal dspartes, we wll conduct a quanttatve analyss of determnants of regonal economc growth. Combned wth the foregong analyss and researches of other scholars, we choose to examne the effects of factors ncludng fxed asset nvestment rate, average educaton level, nfrastructure level, urbanzaton rate and share of regonal government expendture n GDP on economc growth. The basc estmaton method of regonal economc growth s regresson analyss based on growth equaton derved from new classcal growth model (Barro & Sala-I-Martn, 1995). The basc equaton employed here s: 1T 1 y, t 1 T (1 e ) ( ) ln( ) ln( y, t 1) [ ] X u t T yt, 1 T (4) where T stands for the length of tme ntervals. Ths paper selects the annual growth rate of per capta GDP as the dependent varable, so here T=1. We set a lag n the dependent varable after accountng for lagged effects of some nsttutonal factors and labor captal on regonal economc growth and elmnatng effects of busness cycle fluctuatons. represents provncal per capta GDP n year t (calculated n terms of constant prces at 1978), X stands for factors nfluencng regonal economc growth, s coeffcent and u and are resdual errors. We choose samples from 2004 to 2014, and the fnal regresson equaton s: g a ln( y ) Inv Gov Urb Edu Inf u (5) where y t,, t 1, t 1 2, t-1 3, t-1 4, t-1 5, t-1 6, t-1 t g t, represents average growth rate of per capta GDP of provnce durng the tme nterval begnnng wth year t, Inv t stands for fxed asset nvestment rate of provnce n year t-1, Gov s the share of regonal, t, government expendture n GDP, Urb s the urbanzaton rate, stands for average educaton level of t, Edu t, provnce represented by the share of people wth educaton level of college or above n populaton above sx years old, Inf t represents development level of nfrastructure of provnce represented by road densty n year t-, 1. The results presented n Table 2 can shed lght on the effects of above factors on regonal economc growth and thus have mportant polcy mplcatons for reducng regonal dspartes. (1)In addton to Gov t,, other factors have a sgnfcant role n promotng regonal economc growth. There exsts sgnfcant condtonal convergence among regons n Chna n the perod That s, after controllng other factors, economc growth rate of more developed regons s slower, whch s confrmed by the negatve coeffcent of ln(y 0 ). Ths result s conssted wth the above concluson regardng the dynamc pattern of regonal economc growth. (2)The mprovement of educaton level can sgnfcantly promote regonal economc growth. In modern economc growth, the role of human captal had been gradually ncreasng. The essence of human captal s to mprove the qualty of the populaton and ncrease years of schoolng. 98

6 Center for Global Research Development In recent years, n order to solve the problem of unbalanced allocaton of educatonal resources, the government has ncreased transfer payments to mprove educaton of less developed regons especally rural area, whch had led to great success. The 6th census ndcates that western regon had been benefted from the western development strategy and varous preferental polces In Western regon, the total populaton have college educaton and above was 2.7 tmes n 2010 compared wth that n 2000, the general college students n the school Per 100,000 populaton was 4.18 tmes n 2010 compared wth that n Improvement of human captal has an mportant role for promotng economc growth n less developed regons; moreover, t provdes a powerful drvng force to mprove regonal compettveness and narrow regonal dspartes n future. (3)Fxed assets nvestment rate s an mportant factor drvng regonal economc growth n Chna. The relatvely hgh fxed assets nvestment rate wth great varatons n Chna can exercse an mportant nfluence on regonal economc growth. Regonal fxed assets nvestment rate n Chna s not completely endogenously determned. Local governments can affect nvestment decsons of enterprses to some extent and natonal polces can also nfluence regonal dstrbuton of nvestment (ncludng FDI). In addton, we also choose nvestment rate n the begnnng year rather than current nvestment rate as the explanatory varable to overcome the problem of endogenety. (4)There s a sgnfcantly postve correlaton between development level of nfrastructure and regonal economc growth. We employ the ndex of hghway densty to measure development level of nfrastructure and fnd that the coeffcent s postve. The mpact of nfrastructure level on regonal economc growth s relatvely large. In recent years, Chna's transport nfrastructure constructon had developed n great effort, hgh-speed traffc network constructon n order to mprove the transport speed and optmzaton of network system to enhance the effcency and functon have been playng an mportant role n promotng the economc development of less developed areas such as western regons, and mprovng effcency of terrtory development, and reducng regonal dsparty. (5)Urbanzaton level exerts a sgnfcantly postve mpact on regonal economc growth. Snce 2000, our country's urbanzaton has accelerated, and nter-provnce mgraton and urbanzaton process of local populaton has been n contnuous progress, whch facltated the declne of regonal dsparty n terms of development level and ncome. 5. Conclusons and polcy mplcaton (1) Snce Chna began ts reform and openng up, nter-provncal dspartes have experenced a process of narrowng frst and then expandng, and snce 2004 the trend of the ncome dsparty between the regons has been narrowed. (2) Dspartes among the four regons of Chna, especally dspartes between Eastern regon and other regons, are manly causes for nter-provncal dspartes. From 1978 to 2004, dsparty among four regons accounted for nter-provncal dspartes rose contnuously to more than 50%. It has declned snce 2004, but t s stll a major part of the nter-provncal gap. The nternal dsparty of Eastern Regon also has an mportant mpact on nterprovncal dspartes, and the contrbuton rate of the eastern regon to nter provncal dsparty has been mantaned at about 29% snce From 1978 to 1990, the sharp declne of nternal dspartes n Eastern Regon had made a great contrbuton to the declne of overall regonal dspartes of Chna. The Western regon had experenced rapd growth snce mplement of Western development strategy n 1999, whle a sgnfcant trend of ncreasng nternal dspartes had been showng. The share of Western s nternal dspartes to overall dsparty sgnfcantly ncreased from 6.3% n 2004 to 24.6% n Ths matter needs to attract the attenton of the government and take the correspondng measures. (3) Accordng to the results of the regresson analyss, the government expendture, the level of nfrastructure, urbanzaton and educaton have sgnfcant mpacts on promotng regonal economc growth and mprovng regonal dspartes. In the future, the government should adopt approprate polcy measures, ncludng drectng nvestment to the less developed regons, mprovng the level of nfrastructure, rasng the qualty of the populaton to enhance economc growth capacty, acceleratng the pace of urbanzaton and mprovng people's lvng standard by urbanzaton, etc. 99

7 Amercan Internatonal Journal of Humantes and Socal Scence Vol. 2 No. 4; August 2016 (4) As far as the future s concerned, there s stll a lot of uncertanty about the trend of regonal dsparty. On the one hand, the development of regonal economy faces many favorable condtons, for nstance, the development of regonal economy faces the structural reform of the supply sde put forward by the Central Government, whch wll effectvely promote the transformaton of regonal economc structure, especally n the areas had hardly stressed; mplementaton of natonal development strategy such as One Belt and One Road Intatve, Yangtze Rver Economc Belt, ntegrated development of Bejng-Tanjn-Hebe, wll contnue to create better condtons and provde a better polcy support for regonal development; the mprovement of transport nfrastructure and communcaton network facltes wll promote economc development of mportant node ctes and regons, and nduce concentraton of producton factors, mprove the effcency of economc operaton; new regonal plannng and regonal polcy wll boost the economc development n some areas. On the other hand, affected by the weakenng global market, the slumpng global energy prces, declne of domestc nvestment rate and ncreasng polluton control efforts, the mechansm n past drvng rapd catchng-up of less developed areas s has beng weaken, n contrast, the new dynamc mechansm has been not clear. The mode of "hgh nvestment & hgh consumpton of resources had boosted the economc growth of regons endowed abundant resources n the past perod wth rapd development of heavy and chemcal ndustres. However, wth the transformaton of the global and domestc economy, the regons had been heavly dependent on resource and heavy chemcal ndustry such as Shanx, Hebe and Northeaster regon are confrontng ncreasng pressure of economc structure transformaton, the future transformaton road s stll n a lot of uncertanty. In Eastern regon, wth the rsng domestc labor costs and declne of global demand, the economc development mode manly reled on the export of labor-ntensve ndustres s now also facng ndustral restructurng and upgradng, and the challenges to rse poston from lowend to hgh-end n global value chan. In summary, t s dffcult to say that the future of Chna's regonal dsparty wll keep a downward trend, reducng the regonal development gap s stll the mportant task n the future for a long term n Chna. References Chao X.J., Shen K.R.. (2014). Urban-Rural Income Dsparty, Labor Qualty and Economc Growth n Chna. Economc Research, 6, Chen B.K., Ln Y.F.. (2013). Development Strategy, Urbanzaton and the Rural-Urban Income Dsparty n Chna. Socal Scences n Chna, 4, Dayal-Gulat, A. and Husan, A.M.(2000). Centrpetal Forces n Chna s Economc Takeoff. IMF Workng Paper 00/86. Hu A. and Wang,H..(1996). Changes n Chna s Regonal Dspartes. The Washngton Center for Chna Studes Papers, 6 (9). Huang H.. (2013). Insttutonal Analyss of Regonal Dfferences n Chna s Economc Growth. Economc Geography, 33(1), Jan, T., Sachs, J. & Warner, A. (1996). Trends n Regonal Inequalty n Chna. Chna Economc Revew,7, Kanbur, R., Zhang,X..(2005). Ffty Years of Regonal Inequalty n Chna: a Journey Through Central Plannng, Reform, and Openness. Revew of Development Economcs, 9(1), L S.T., Feng J., & Hou Y.Z..(2004). Ten Major Trends for Regonal Development n Chna. Chna Development Revew, 21, Peng W.B., Lu Y.J..(2010). Research on Space-tme Evoluton Characterstcs of Chna s Regonal Economc Dsparty. Economc Geography, 30(4), Wang X.L., Fan G.. (2005). Income Inequalty n Chna and Its Influental Factors. Economc Research Journal, 1, Xu Z.Y., L S.T.. (2006). Analyss on the Trend of Regonal Income Dsparty n Chna. Economc Research, 7,

8 Center for Global Research Development Table1 The share of dspartes ntra-regon and nter-regon based on nomnal GDP per capta Year Dspartes wthn Eastern Dspartes wthn Central Dspartes wthn Western Dspartes wthn Northeastern Dspartes Among Regons % 4.0% 6.3% 2.6% 22.4% % 5.7% 8.3% 3.0% 42.3% % 1.5% 10.6% 1.8% 57.0% % 1.9% 13.2% 1.1% 54.4% % 3.7% 24.6% 4.4% 37.4% Four Table 2 Regresson results of Chna s regonal economc growth( ) Coef. Std. Err. p> t ln(y 0 ) Inv Gov Urb Edu Inf _cons sgma_u sgma_e Rho Number of 341 Obs wthn=0.376 R-Sq Fgure1 Four Regons (Western, North-Eastern, Central, Eastern) of Chna 101

9 Growth Rate(%) Thel_L Index Amercan Internatonal Journal of Humantes and Socal Scence Vol. 2 No. 4; August Inter-Regon Eastern Central Western Northeastern Fgure2 Decomposton of nter-provncal dsparty wth four regons based on nomnal GDP per capta at current prce Eastern Central Western Northeastern Fgure3 Growth rate of GDP per capta of Chna s four regons

10 Center for Global Research Development 12 Guangdong 11 Zhejang Growth Rate of GDP Per Capta, (%) Fujan Hanan 10 Jangsu Xnjang 9 Shandong Henan Inner Mongola Log of 1978 GDP Per Capta Yunnan Hube Chongqng Anhu Jln Schuan Shaanx Guzhou Bejng Jangx 7 Nngxa Hebe Laonng Gansu Qngha Shanx Hunan Tanjn 6 Shangha Tbet Helongjang Guangx 5 Eastern Central Northeastern Western Fgure 4 Growth Pattern of Chna s Regons Growth Rate of GDP Per Capta, (%) Zhejang Fujan 16 Shandong Guangdong Jangsu 14 Hanan Hebe Anhu Shangha Guangx Chongqng Henan 12 Log of 1990 GDP Per Capta Tanjn Schuan Hube Hunan Tbet Inner 10 Mongola Jangx Jln Shanx Laonng Yunnan Shaanx Gansu Bejng Xnjang 8 Guzhou Helongjang Nngxa Qngha 6 Eastern Central Western Northeastern Fgure 5 Growth Pattern of Chna s Regons

11 Amercan Internatonal Journal of Humantes and Socal Scence Vol. 2 No. 4; August Growth Rate of GDP Per Capta, (%) 13 Inner Mongola 12 Shaanx 11 Shandong Jangsu Zhejang Tanjn Tbet Chongqng Shanx Guangdong Schuan 10 Hebe Hunan Hube Fujan Log of 1996 GDP Per Capta Jangx Henan Shangha 4.1 Anhu Jln Laonng Qngha Helongjang Bejng 9 Gansu Guangx Guzhou Nngxa 8 Xnjang Yunnan Hanan 7 Eastern Central Westrern Northeastern Fgure 6 Growth Pattern of Chna s Regons Growth Rate of GDP Per Capta, (%) 15 Inner Mongola Shaanx Guzhou Chongqng Schuan 13 Anhu Hube Jln Guangx Hunan Fujan Jangx Qngha Jangsu Henan Laonng Tbet Shandong Gansu Yunnan Helongjang Hanan Tanjn Nngxa Shanx Hebe Guangdong Log of 2004 GDP Per Capta Xnjang 9 Zhejang 7 Shangha Bejng Eastern Central Western Northeastern Fgure 7 Growth Pattern of Chna s Regons