Development Policies in China: An Analysis of the Territorial Imbalances

Abstract

The aim of this paper is to verify the efficacy of the rebalancing policies adopted in China, in order to establish their role in the convergence process.

The main contribution consists in evaluating the rebalancing policies implemented locally as a whole through a disaggregated analysis, obtaining in addition to useful information for the decision maker on the in progress convergence process between the most developed provinces and the inland areas, specific insights on the suitable strategies to be implemented by each province.

The economic expansion started in December 1978, as a consequence of the decision taken by the Chinese Communist Party, led to the country economic openness, but also entitled regional disparities.

Three rebalancing policies — China Western Development, Revitalize Northeast China, Rise of China Central Plan — have been established since 1999 by the Chinese Government. They differ essentially in the targets and the destination areas.

Based on data referred to the years 1995, 2000 and 2010 and taken from the “National Bureau of Statistics” in China, this paper follows a five steps - based approach:

• 1 Survey of the policies;

• 2 Recognition of the objectives associated with each policy;

• 3 Building up of the indicator for measuring policies impacts;

• 4 Pre and post testing policies;

• 5 Check of the role played by policies in the convergence process.

Results show that the rebalanced policies have been crucial in stimulating and effectively allowing a strong development in China as a whole, specifically in all those provinces for which initially the Chinese Government did not make up any efforts, believing that their development would have been followed consequently to that of the coastal provinces.

However, the final goal of the convergence has not been totally met and the level of development of inland areas is certainly lower than the coastal ones.