Do Backbone High-Speed Rails Widen the North-South Gap in China?

Abstract

The economic disparity between southern and northern China has widened in the past decade. This article explores the roles of the north-south stretched backbone high-speed rails (HSRs) in the widened north-south economic gap in China. By constructing panel data of 283 cities between 2005 and 2016 and estimating the difference in GDP and per-capita GDP of northern and southern cities before and after the first north-south stretched HSR, we show that the north-south economic gap widened by about 8% as the opening of the Beijing-Shanghai HSR, the first north-south stretched HSR. Further channel analysis reveals that the north-south gaps in population, fixed asset investment, public expenditure, and the relative size of secondary industry to tertiary industry also widened. These results suggest that fast transportation improvement caused by long-distance backbone HSRs can contribute to accelerating the large-scale regional disparity.