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Regional disparities with special focus on China

This article deals with regional disparities within a country. In the country scorecard, the GDP per capita is shown. This figure shows very much and is maybe the most important statistic in the country scorecard, as it measures the living standard. From a material point of view it is the best available measure. However, it just gives the average for all people in that particular country. We will show in this article that this figure can be distorted as huge regional disparities exist within a country. Therefore, the average GDP overestimates the GDP of particular areas and underestimates it of other areas, in some cases tremendously.


Take China as an example. China’s economy is booming, but this boom is marked by regional disparities, i.e. a huge gap between the rich and the poor provinces. This gap is showed in the following graph:

Regional disparities

Source: Bronger, D.; Wamser, J., (2005), p. 112

The previous graph compares the living standard (GDP) of regions or provinces respectively with the index, which in the average GDP in that particular country. The disparities within China are conspicuous. The economic gap between the richest province Shanghai and the poorest one Guizhou is 13:1. This means that the economic gap in China is bigger than in India and much bigger than in the USA.


Regional disparities have social, as well as political consequences. Especially the first can be seen in China. Since the regional disparities have been increasing since the 1990s, social conflicts became more and more. In 2004 for example, there were 70,000 regional conflicts counted in China. Regional disparities also lead to migration. Millions of Chinese migrated into the big cities. Shanghai has about three million migrant workers. Another example is the city Dongguan with seven million inhabitants, including five million migrant workers.

Although the regional disparities have been growing since the 90s, it has to be mentioned that the above mentioned ratio of 13:1 (1990: ~ 7:1), is just a relative measure. Since that time also the economy in the poor regions increased in absolute figures (however, not that fast as in the richer regions). In absolute terms 400 million Chinese escaped from absolute poverty since 1980. However, in 2001 about 211 million Chinese still lived in absolute poverty.

If you want to know more about this topic, you can acquire my German paper “Erfolgsbewertung der chinesischen Öffnungspolitik” for just 5 Euro. Just write me an email. You can also buy it via Grin for 6.99 Euro.

 

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