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Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness

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Listed:
  • Kanbur, Ravi
  • Zhang, Xiaobo
Abstract
This Paper constructs and analyses a long run time series for regional inequality in China from the Communist Revolution to the present. There have been three peaks of inequality in the last fifty years, coinciding with the Great Famine of the late 1950s, the Cultural Revolution of the late 1960s and the 1970s, and finally the period of openness and global integration in the late 1990s. Regional inequality in China in 1999 exceeds the level experienced at its peak in the Cultural Revolution, and is near the peak level of inequality experienced during the Great Famine. Econometric analysis establishes that regional inequality is explained in the different phases by three key variables—the ratio of heavy industry to gross output value, the degree of centralization, and the degree of openness. Inequality has increased alongside spectacular performance in growth and poverty reduction. As China enters the WTO, pro-active measures encouraging liberalisation and investment in the inland regions may be required to promote more equitable growth in the future.

Suggested Citation

  • Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:2887
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    More about this item

    Keywords

    Inequality; Decentralization; Polarization; Chinese economy; Industrialization; Openness;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects

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