The Spillover and Feedback Effects between Coastal and Non-coastal Regions

Abstract

Over the past two decades, China’s economic development has been characterized as market-oriented reform. As part of a process of opening up to the outside world under the philosophy of the ‘Step Ladder Development Policy’, the coastal region, especially the south, enjoyed preferential economic policies and has achieved faster rates of economic growth than the Non-coastal regions. The Chinese government hopes that this will be a learning curve and provide the experience to introduce economic reforms to the interior regions, and, simultaneously, that the faster development of the coastal region could pass on to the other regions. While China is on a rapid growth path, there has been increasingly unbalanced regional development, particularly since the 1990s. As in the case of other large-scale economies, the Coastal (eastern) region of China grows much faster than the Non-coastal (western or interior) region, while the eastern region is much smaller than the western region. In order to develop the western region, in 1999 the Chinese government introduced a ‘Western Area Development Strategy’. The regional development problem has become an important issue, and the study of the influence and interdependence of regional economies is becoming increasingly urgent.