An Empirical Analysis Of The Disparities Of Regional Industrial Economics In China

Regional disparity refers to the "aggregate"which isconstituted of economy,society and various elements disparityinfluencing the development of economy and society, namely thedisparity of comprehensive strength level among different regions.In the past 20 years or so, the performance made in economicreform has been regarded as "the miracle of China"by lots ofpeople. However, the sign of the ever-growing disparity amongregions is becoming the focus. Most early researches on the reformachievements of economic system in China often regarded Chineseeconomy as one whole of homogeneity, but recent theoreticalresearches pay more attention to the disparity of different regions.When studying regional disparity, because the differences ofresearch objects and the availability of data, the area is divided intothree major regions: east,middle part and west. Remarkableeconomic disparity existed before the economic reform. Overall,both the development level of economy and per capita income ineastern coastal region and parts of the middle are higher than thatof the west. Though there were different extent acceleration ofeconomic growth in the three regions, the economic growth rate ineastern coastal region was notably higher than that of the middleand west regions in the past 20 years. Therefore the trend thateconomic disparity expanded among regions appeared. Especiallyin 1990s, it was quite obvious that the disparity expanded. Theaverage growth rate in the middle and west regions were about 1percentage lower than that of the east in 1980s while 2～3percentages lower in 1990s. The average growth rate in the middleand west regions were no more than 1 percentage lower than that ofthe east in 1980s while about 2 percentages lower in 1990s.Regional disparity in the process of economy development iswidely concerned by academia mainly because the problem ofregional disparity is of great significance theoretically andrealistically. Theoretically, the Chinese cases can offer naturalexperiment for the theory of economic growth,new economicgeography,development economics and transition economics, andmore generally, contribute to understand the reasons why thedisparity of economic performance exists among differenteconomies. What's more, from the realistic aspect, both thenecessary contents to evaluate objectively the achievements andproblems of reform and the base for choosing and implementingeconomic policy effectively lie in that we should appraise thedisparity appropriately and find out the true reasons for thesedifferences and understand the function mechanism of variousfactors that lead to regional disparity.When analyzing the regional disparity according to east,middle and west , it can be found that regional disparity holds thedominant position in the total disparity of Chinese economy, andthe proportion of this disparity takes on a increasing trend. Thedisparity among the three major regions increased from 37.75%holding the total disparity in 1978 to 70% in 1998.It can be found in industry analysis of the regional disparitythat the contribution the secondary industry made far exceeds otherindustries. Averagely, more than 65% regional disparity is causedby secondary industry with the third industry in the next place andthe primary industry quite unimportant. Through the analysis ofregional disparity, it is clear that the total disparity of China'snational economy is caused to a big proportion by regionaldisparity. However, regional disparity of economy is caused by theeconomic disparity of industries of the regions. It can be say thatthe regional disparity of industry economy is the most importantrepresentation of the disparity of regional economy. Therefore, thekey to discover why there is huge economic disparity in differentregions is that the reasons for economic disparity of regionalindustry in China should be found.Productivity index of Malmquist by combing DEA and indexmethod is used in this paper and the growth of total factorsproductivity of the 30 provinces in China is studied as well. Theadvantage of this method lies in that on one hand, the method dosenot need suppose a kind of concrete form of production function,thus it avoids the error of function form. On the other hand, themethod can analyze the productivity of total factors, and then thegrowth source of the total factors can be studied. On the basis ofthe data from 30 provinces, we construct the production frontier.The economy growth of each province is compared withproduction frontier. The growth of productivity can be analyzedinto technical efficiency change and technological progress.Technical efficiency is mainly the result of efficiency increase(approaching production frontier) caused by system reform and towhat extent the maximum possible output can be attained undercertain resources conditions. Technological progress is innovationor the results of introducing into advanced new technology, whichbrings outward removal of production frontier. Technical efficiencychange and technological progress reflect the input factors andintensive factors of the growth pattern of industrial economy. Theyand regional factors(such as the ways of industrialization in everyregion,the natural endowment structure of productive factors, etc.)can be the cause of the regional disparity of industry in China. Onthe basis of the panel data 1992-2002 of Chinese industrialeconomy, the regression model of panel data is set up as thefollowing, in which the factor of industrial technology level,thefactor of industrial productivity efficiency and capital input areused as explanative variable and added value of industry per capitais used as explained variable. ln yit = αi + β1xit + β2xit + β3 ln xit + uit 1 2 3 i =1,K,30 ;t =1,K,6Thus the influence of input factors and intensive factors onindustrial economy and the influence of regional factors onindustrial economy of every region can be attained.By demonstration and examination it can be found that during1992-2002, with the rapid increase of industry, the technologicalreform, which represents the intensive increase features, and theefficiency evolvement are quite complicated and the industrialincrease of every region take on the multiplier effect in the featureof fluctuating and alternating. During 1992-1999, the industrialeconomy of China took on extensive characteristics. The fundinput,the industrial foundation of every region and the factors ofinitial natural endowment are the main reasons for the regionaldisparity of industrial economy in the three major regions east,middle and west. However, the extensive extent of the influence ofcapital on industrial economy in every region decreased gradually,with the influence of regional factors on industrial economykeeping on decreasing during 1999-2002. Factors such as initialtechnology and efficiency state and the dominant naturalendowment of regions, etc. have more influence on the industry ofevery region, and the "hereditary effect"of initial naturalendowment is quite obvious. At the same time the level of the eastis distinctly higher than the average level of the whole nation.Since 1999, the industrial economy in China entered a new stage ofintensive increase which resulted in the dominant factors ofindustrial disparity among provinces changing from early regionalbase or the initial natural endowment to the new capital,efficiencyand technological strength which came into being in the industrial...