Jump to ContentJump to Main Navigation
Inequality and Growth in Modern China$
Users without a subscription are not able to see the full content.

Guanghua Wan

Print publication date: 2008

Print ISBN-13: 9780199535194

Published to Oxford Scholarship Online: May 2008

DOI: 10.1093/acprof:oso/9780199535194.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2022. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use.date: 03 July 2022

Development Strategies and Regional Income Disparities in China *

Development Strategies and Regional Income Disparities in China *

(p.56) 4 Development Strategies and Regional Income Disparities in China*
Inequality and Growth in Modern China

Justin Yifu Lin

Peilin Liu

Oxford University Press

This chapter argues that the regional income gap of China is endogenously determined by its long-term economic development strategy. The comparative advantage-defying (CAD) strategy, adopted by the Chinese government in the pre-reform era, encouraged firms to deviate from the economy's existing comparative advantages by prioritizing capital-intensive heavy industries. Under this strategy, many enterprises were not viable in competitive markets and required government support and protection. Consequently, the CAD strategy retarded the functions of market, impeded capital accumulation, and hindered technology and productivity progress in many provinces. In the post-reform period, provinces in central and western China continue to follow the CAD strategy and have poor growth records, while the coastal areas started to adopt the comparative advantage-following (CAF) strategy by facilitating firms' entry into an industry or choice of technology according to the economy's existing comparative advantages. This difference in development strategies represents the most fundamental cause of regional disparity in China. Therefore, it is imperative to replace the CAD strategy with a CAF strategy and restructure the existing industries in all provinces based on the principle of comparative advantage. This would lead to balanced development among regions and provinces.

Keywords:   economic development strategy, viability, regional income gap, CAD strategy, heavy industry, CAF strategy

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .