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GeographyEconomic Policyand Regional Development in China

Source: www.earth.columbia.edu
Topic: Economic Policy

Sort Desciption: ential economic policies and geographical location to the growth of ...... knowledge of changes in Chinas economic structure and policy regime in the 1952 ...

Content Inside: GeographyEconomic Policy and RegionalDevelopment in China GeographyEconomic Policy and RegionalDevelopment in China Geography Economic Policy and Regional Development in China * Sylvie Dmurger Jeffrey D. Sachs Wing Thye Woo Shuming Bao Gene Chang Andrew Mellinger Center for International Development Harvard University andrew_mellinger@harvard.edu Asian Economic Papers 1:1 2002 the Center for International Development and the Massachusetts Institute of Technology Abstract Many studies of regional disparity in China have focused on the preferential policies received by the coastal provinces. We decom- posed the location dummies in provincial growth regressions to obtain estimates of the effects of geography and policy on provin- cial growth rates in 1996–99. Their respective contributions in percentage points were 2.5 and 3.5 for the province-level me- tropolises 0.6 and 2.3 for the northeastern provinces 2.8 and 2.8 for the coastal provinces 2.0 and 1.6 for the central provinces 0 and 1.6 for the northwestern provinces and 0.1 and 1.8 for the southwestern provinces. Because the so-called preferential policies are largely deregulation policies that have allowed coastal Chinese provinces to integrate into the international economy it is far su- perior to reduce regional disparity by extending these deregula- tion policies to the interior provinces than by re-regulating the coastal provinces. Two additional inhibitions to income conver- gence are the household registration system which makes the movement of the rural poor to prosperous areas illegal and the monopoly state bank system that because of its bureaucratic na- ture disburses most of its funds to its large traditional customers few of whom are located in the western provinces. Improving in- frastructure to overcome geographic barriers is fundamental to increasing western growth but increasing human capital formation (education and medical care) is also crucial because only it can come ...

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