The Integration Of The Chinese Regional Economic: An Analysis From Pan Integration

Chinese economic transition is promoted with the reconstruction and integration of regional economy over the Last 30 years. It happened in two regions: one is the "Greater China" economic region, which belongs to different custom territory and involves the integration of commodity market and money market; the other is the provincial economy in Chinese Mainland, which belongs to the same custom territory and monetary system. The purpose of this paper is to analyze the unique phenomenon of regional economic integration, and test the key propositionThere are two analysis frameworks of regional economic integration in economic theory: one is the economics of integration in international economics, the other is the new economic geography in spatial economics. This paper points out that the applicability of these two analysis paradigm should be defined to study Chinese regional problem. In view of the fact that two kinds of regional economy integration in a sovereign country have been seldom researched, this paper attempts to put forward a whole analysis frame from pan integration, analyzes the amalgamation of "Greater China" economic region and provincial economy in Chinese Mainland, demonstrates the objective existence of pan integration phenomenon in Chinese regional integration.In theoretical study, this paper uses the economics of integration in international economics to analyze the trade effects of "Greater China" regional economic integration, and explains the integration mechanism in the background of one country two systems. The results show that we should demonstrate the trade creation and trade diversion effect, implementation manners of intra-industry trade and monetary integration, and the external effect of regional economic integration. In this process, we should modify the analysis frameworkof integration economics and game theory. This paper analyzes the integration mechanism of provincial economy in Chinese mainland in the analysis framework of economic geography and new economic geography. The results show that the industrial agglomeration gap is an important analysis dimension used to judge the degree of regional economic integration, location difference is an initial condition, increasing returns to scale and positive feedback effect cause the self reinforcement of agglomeration, leading development of advantageous area force the present situation of provincial economy integration, and policy difference leads to path dependence of integration tendency. In general, this paper explains the trade effect, intra-industry trade and monetary integration of "Greater China" regional economic integration by the use of the economics of integration paradigm, and analyzes the industrial agglomeration, location and policy difference of provincial economic integration by use of economic geography and new economic geography. From the pan integration, this paper explains the mechanism of Chinese regional economic integration.In empirical study, this paper uses Balassa model, GL index and real interest parity to measure the trade welfare effect, inter-industry trade and intra-industry trade, and monetary integration. Towards provincial economic integration in Chinese mainland, this paper uses Krugman Indices, regression analysis of panel data to test province industrial average concentration rate, province industrial central value, location and policy factors of province industrial agglomeration.The empirical results show that there is market integration difference between economic bodies. In the trade relations between Hong Kong, Macao, Taiwan and Chinese mainland, there is total trade creation effect, net trade creation effect and none trade diversion effect. Meanwhile, in the trade relation between Chinese mainland and Hong Kong, Macao, Taiwan, there is none total trade diversion and net trade diversion effect. Capital intensive industry and technology intensive industry play a leading role in intra-industry trade of "Greater China" economic region. It is important to choose the exchange rate regime to monetary integration in "Greater China" economic region. In provincial economy of Chinese mainland, the level of regional economic integration is improving, but provincial difference of manufacturing industrial agglomeration is significant. In theoretically, this paper holds that government's good wish based on the convergence hypothesis of new classical economics has not completely realized. From the view on results of regional economic integration, the region relative specialization disparity of Chinese mainland is reducing, provincial region economic integration presents club-convergence trend. In location factors, the difference of coastal and inland has significant effect to industrial agglomeration. In policy factors, export leading policies have significant effect to industrial agglomeration. The higher government participates in the economic activity, the hinder is in regional industrial agglomeration.Based on the above analysis, this paper presents further research direction and corresponding policy suggestion, and expects to promote the process of Chinese regional economic integration in "Greater China" economic region and provincial economic region.