Elsevier

Economic Systems

Volume 26, Issue 1, April 2002, Pages 31-54
Economic Systems

Disparities in Chinese economic development: approaches on different levels of aggregation

https://doi.org/10.1016/S0939-3625(02)00004-3Get rights and content

Abstract

Based on a new and recent set of data on economic development in the Chinese prefectures, the paper investigates the impact of different levels of spatial aggregation on the assessment of regional disparities in China. We analyze the structure of inequalities in the light of a component analysis of the general measure of entropy, which is applied on inter-regional disparities with reference to different levels of aggregation as well as the rural/urban segmentation. We reach the conclusion that lower levels of data aggregation are to be recommended for policy purposes, that nationally homogenous discrimination still impacts favorably on urban areas, and that in many rural areas, there is a clear growth trend with diminishing regional disparities.

Section snippets

Introduction: zooming in on China’s regional development

Interregional disparities in China’s economic development have attracted considerable political and scholarly attention. Although in a country of such a vast size as China, large disparities seem to be an unavoidable fact of nature, there is the additional impact here of distorting policy interventions and spatially divergent institutional change, which renders the topic analytically very difficult and politically sensitive. Any kind of causal analysis will entail assignation of responsibility

The ICCE/GIS data base on Chinese prefectures and competing aggregation approaches

The ICCE/GIS data base contains some of the data categories most important for the comparison of trends and differences in regional development across China. There are virtually complete sets of data on per capita GDP, rural net income and urban disposable income per capita, as well as on the structural composition of GDP and employment. With regard to these categories, one of the most serious limitations are the gaps in data on population, because these are still based on the place of

Methodology: the general entropy measures (GEM) measure and approaches to regional decomposition

There are a number of approaches to the measurement of inequality and a wide discussion on the quality and meaning of different inequality indices.

Total inter-provincial and inter-prefectural inequalities compared

In order to convey a first impression of the possible insights to be gained from disaggregating below the provincial level, Table 1 shows the calculations of total national inequality for the four main indicators: GDPPC, RPCI, UPCI and TPCI on both prefectural and provincial level. With reference to the years 1993 and 1998, we compare the changes in the Gini index, the coefficient of variation (CV), the GEM and the max–min-indicator which is frequently applied in Chinese policy analyses.

Conclusion

Our study corroborates the familiar judgment that China is a vast and hugely varied country. At the same time, we have demonstrated that nationally homogenous policy interventions still have a strong impact in favor of the urban areas. Scrutiny of the GDPPC and the RPCI indicators shows a greater variety, whereas, the relative uniformity of the UPCI results and the stark differences between the urban and the rural sectors reveal the strength of institutional factors inherited from the socialist

Acknowledgements

Support of our research by the ‘Märkische Arbeitgeberverband’ is gratefully acknowledged. Additional support was generously provided by Volkswagen Foundation in the context of the “Sino-German Cooperation Programme in Empirical Economic Research”. Two anonymous referees helped us to sharpen our argument.

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