Abstract
Abstract Regional disparities within China are now an important policy question. Recently the three provinces of the north-east region have been identified as priority areas for regional development, along with the Western part of the country. The north-east is the old industrial heartland of the country and its economy is based around heavy industry, mineral extraction and state owned enterprises. This paper uses a unique database on medium and large-scale enterprises to establish how far enterprise performance in the north-east differs from the national average and the reasons for any such differences. It finds that even allowing for industrial structure and ownership, performance in the north-east is significantly below that in the rest of the country. This is attributed to aspects of the investment climate in the region.
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