Preliminary Study On China's Regional Economic Development Disparity Source

The present paper employs the neoclassical economic growth theory and new-classical economic theory to investigate the basic factors which generate the development gap between the economic growth rates of the two Chinese regions, and to find out whether the newly developing economics can catch up with the developing economies smoothly. The main founding reveals that:First: unbalanced development is inevitable in developing countries Second: as an internal factor, institutions of an economy is essential for developing faster and earlier; as an external factor; foreign direct investment (FDI) is another key element. The differences on the above two factors among the provinces of china can explain the differences of the economic performance. There does exist conditional convergence, but the speed is too low to depend on to reduce the expanding gap. The implication of the finding is discussed briefly in the end of the paper.