Trends, determinants and consequences of regional inequality in China: new evidence

Regional inequality in China has attracted immense attention. Many studies have been undertaken on this topic. Most of the studies are based on provincial level data but only a few have focused on intra-provincial regional inequality, so the objective of this study is to fill the void in the literature by using county-level data. It presents new evidence about the trends, determinants and consequences of intra-provincial inequality in China. For this purpose, a database of counties and county-level cities in all provinces covering the period from 1997 to 2007 has been compiled. The thesis makes several contributions to the literature. First, the decomposition of inequality and convergence analysis is conducted for each province individually. Second, the disparity between city and county subgroups within each province is examined. Third, the determinants and effects of regional inequality within each province are also investigated. Fourth, this study covers a time period of 11 years, whereas similar studies in the literature cover only one or two years. The knowledge derived from this study may have implications for policy making in China and potentially other developing countries. According to this study, inequality amongst the county-level units increased enormously at all levels of spatial aggregation during the study period. About 60% of the overall inequality can be attributed to intra-provincial inequality. The results of convergence analysis show that convergence to the mean income is impossible for all the provinces, except Liaoning. Moreover, it is found that the county-level units tend to remain in their present income groups and it is very difficult for the poor county-level units to move to higher income groups.