Analysis of China’s Regional Inequality
Introduction
According to the article “The spatial-temporal hierarchy of regional inequality of China”, written by Yingru Li, Y.H. Dennis Wei, the authors introduced an idea of how inequality of China is like and set up a research to try to analyze the inequality from three different levels or 27 provinces and 4 municipalities of mainland China. The author also mentioned the importance of geographical scales in analyzing the inequality of China. So, the inequality of China should be analyzed at three different geographic scales which are inter-province, inter-region and intra-region.
Data and Methodology
The data for this research contains constant GDP per capita (GDPPC), per capita foreign direct investment (FDIPC), the share of state-owned enterprises (SOE), education (EDU), population growth rate (POPGR), and GOS shape file. The authors also talked about how they setup this research by dividing all data into time, region and province levels. And the time frame of these data were from 1978 to 2007. The three main statistical indicators that authors used to measure regional inequality were the coefficient of variation (CV), Gini coefficient and Theil index. In addition of helping readers to understand this study, the authors also introduced multilevel regression modeling which is similar to the multiple regression model we have learned from the class. For instance, the authors setup the economic growth as the dependent variable for this model. And the independent variables included FDIPC, SOE, EDU, POPGR, FAIPC, coastal dummy (coastal province = 1 and noncoastal province = 0) and new policy dummy (province under “Western Development Program” and “Reviving Northeastern Region” = 1, others = 0). The authors expected that there was a positive relationship among FDIPC, EDU, FAIPC, coastal dummy, new policy dummy with economic growth, and a negative relationship among SOE, POPGR with economic growth.
Discussion and Analysis
By looking at the coefficient of variance, the authors concluded that the eastern region experienced much more uneven development than the central and western regions, but showed a clear downward pattern. The coefficient of variance decreased from 0.93 in 1978 to 0.61 in 2007. I find out this conclusion is understandable. Based on my own experience of 20 years of living in western area of China, at the time of China’s economic started growing, the eastern area was at the top and followed by central and western. Most of Chinese importing and exporting business took place around the coastal line which were mainly eastern provinces located. Without a doubt, central and western regions’ economic started to get better and better under the implement of “Western Develop Program”. So that means the differences between three regions reduced from the time frame of 1978 – 2007. In addition, the R squares of the multiple regression model is 84% which means the expected