China’s Changing Regional Disparities during the Reform Period

Abstract

I examine regional disparities in China during the reform period (1978–94) based on the latest measures of provincial per capita GDP. Results reveal a “U-shaped” pattern in regional inequality over time. Regional inequality in per capita GDP among the 30 provinces of China diminished as reforms progressed until 1990, after which it started widening. This diminishing trend was due to a significant decline in income inequality among provinces in the coastal region. A further test indicates that an increase in per capita GDP in the southern coastal provinces is the main reason for declining regional inequality in China during the early reform period (1978–90). Rising GDP in the southern coastal belt also led to widening regional disparities between coastal and interior regions after 1978. As a result, regional inequality in per capita GDP among the 30 provinces has worsened since 1990. From 1992 to 1994, regional disparities between coastal and interior provinces became more significant than the traditional North-South inequality in the Chinese space economy within the context of uneven regional development.