| Significant developmental disparities among China's eastern, central, and western regions clearly challenge the economic efficiency, social equality, political stability, and environmental sustainability in the country. One impediment to economic development in the lagged western region is the lack of transportation infrastructure. Chinese government has made concrete plans recently to improve the accessibility of its vast and remote western region, hoping to reduce regional disparities by promoting economic development in the western region.; This dissertation studies interregional trade, regional comparative advantage, and the impacts of transportation infrastructure buildup on regional and national economic output, usage of production factors, commodity prices, and interregional trade patterns in China. A linear-programming interregional trade model based on the trade partners' fundamental economic features, namely technologies, factor endowments and prices, consumer preferences as well as the costs and capacities of transporting interregional commodity flows is constructed to determine regional production and interregional trade patterns. The model is implemented as a 3-region, 27-sector, 7-factor economy for the year 1997 in three scenarios that differ only in the interregional transportation infrastructure levels corresponding to the base year of 1997, the plan for 2010, and the plan for 2020 to test the three hypotheses. The results indicate that the planned infrastructure buildup increase benefits especially in the lagged western region, as that it is cost-effective and energy-saving. Based on the model results, policy recommendations are offered on China's regional development and sustainable development strategies. |
