Growth Disparity in China: Provincial causes

Abstract

The strategic shift of central government policy from equitable economic growth to the open door policy with an emphasis on coastal development in 1978 has resulted in uneven regional growth in China. The most noticeable growth disparity is between the coastal and inland provinces. This article seeks to identify the uneven growth of regional economies and to investigate provincial causes of such interprovincial variations in growth in the post-Mao era. This study develops a local reform-driven perspective to account for an unequal growth pattern in Jiangxi and Fujian. It finds that discrepancies in leadership role and ability to establish growth policy and strategies are the key variables in explaining the dissimilar pace of development. Such growth policy and strategies account for differences in restructuring in the local economy from centrally-planned to market-conforming, variations in creating new comparative advantages of the acquired kind, and different levels of marketization and non-state sector growth.