Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness

Abstract

This paper constructs and analyses a long-run time-series for regional inequality in China from the Communist Revolution to the present. There have been three peaks of inequality in the last fifty years, coinciding with the Great Famine of the late 1950s, the Cultural Revolution of the late 1960s and 1970s, and finally the period of openness and global integration in the late 1990s. Econometric analysis establishes that regional inequality is explained in the different phases by three key policy variables; the ratio of heavy industry to gross output value, the degree of decentralization, and the degree of openness.

China's provincial disparities and the determinants of provincial inequality

“…A non-symmetrical reduction of international transactions cost via preferential policy can be translated into the model by d 1 < 0 or d ex 1 < 0. As result the …nal development curve D in …g-ure 2 shifts upward (see (12)) and the interest parity curve IP shifts downward (see (17)) 25 . Starting from the original equilibrium point B 0 the two provinces will move towards the new equilibrium point B 1 .…”

“…Numerous studies on this topic re ‡ect the importance of this problem. Analyzing the economic development of the coast, the interior and the rural and urban provinces Kanbur and Zhang (2005), Huang, Kuo and Kao (2003), Li and Zhao (1999) and Wan (1998) …nd statistical evidence for rising inequality brought about by increasing provincial disparities.…”

On the shifting spatial logics of socioeconomic regulation in post-1949 China

“…A separate study on real per capita consumption between 1952 and 2000 by Kanbur and Zhang (2005) reinforces the validity of these studies. They identified sharp growth in interprovincial inequality 1) in the buildup to the Great Leap Forward (1955Forward ( -1960; 2) after the Cultural Revolution began in 1966; and 3) after the Deng administration made a distinct turn to urban-oriented industrialization in the early 1990s.…”

Are the Children of Uneducated Farmers Doubly Doomed? Farm, Nonfarm and Intergenerational Educational Mobility in Rural China

“…A large part of the literature on inequality in China focuses on spatial differences between coastal and interior regions, and across rural and urban areas (see, among others, Fleisher et al (2010), Kanbur and Zhang (2005), Chen and Fleisher (1996), Song (1999), Park (2008)). For insightful analysis of inequality in post-reform period see, among others, Shi et al (2013), Benjamin et al (2008), Gustafsson et al (2008), Khan et al (1999), Ravallion and Chen (1999), Griffin and Zhao (1993).…”

“…A large part of the literature on inequality in China focuses on spatial differences between coastal and interior regions, and across rural and urban areas (see, among others, Fleisher et al (2010), Kanbur and Zhang (2005), Chen and Fleisher (1996), Knight and Song (1999), Park (2008) is partly responsible for our focus on non-farm occupations is that non-farm income has 13 As we discuss later, the farm and nonfarm distinction carries different meanings before and after the reform, because the policies implemented during the Maoist era (in particular the cultural revolution) were aimed at enhancing the social position of peasants and improving educational mobility of their children (see, among others, Hannum and Xie (1994), Sato and Li (2007), and Hannum et al (2008)). …”