Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212659 
Year of Publication: 
2009
Series/Report no.: 
BOFIT Discussion Papers No. 15/2009
Publisher: 
Bank of Finland, Institute for Economies in Transition (BOFIT), Helsinki
Abstract: 
This paper discusses growth differentials of Chinese provinces geared to agricultural activities and those focusing on industrial production over three decades of economic reform. Following trade theory and endogenous growth theory, we suggest that the fundamental differences between regions arise from their resource allocations at the start of reforms. Thus, capital-abundant regions have tended to specialize in industrial production, while the labor-abundant regions have concentrated on labor-intensive pro- duction (agriculture). Many of China.s agricultural provinces suffer from oversupplies of labor, which has led large numbers of people to migrate within the country to work in non-farming sectors of economy. We show that provinces with high shares of industrial production (the industrial club) have converged, and that agricultural provinces shifting to industrial production have been catching up to initially industrialized provinces. Provinces that have stayed with an agricultural strategy (the agricultural club) show no evidence of convergence and appear to have been left behind in terms of economic development.
Subjects: 
Growth
Agriculture
Convergence
JEL: 
O17
O40
O57
Persistent Identifier of the first edition: 
ISBN: 
978-952-462-985-0
Document Type: 
Working Paper

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