Market Size And Local Economic Disparity Research

Since the reform and opening-up, China has implemented a series of opening-up and economic reform policies, fully mobilized the enthusiasm of the various regions. Economic developed rapidly, overall national strength, every region's economy has been greatly enhanced. But in the process of rapid economic growth, regional economic growth and income levels preached significant differences. Although in the process of economic development of developing countries, regional difference is a universal phenomenon, the existence and the expansion of regional disparity is against efficient allocation of resources, affects the overall economic efficiency. Moreover, considering the social welfare and political stability, regional disparities will also affect the overall welfare level. Economic development gap between regions has gradually restricted the further development of our social and economic, become a challenge to China's sustainable economic development and social stability. This issue has caused widespread concern, the Government introduced a series of policies for this, and some measures have been taken in. The Government put forward and implemented "Development strategy of the western China" aimed at reducing regional disparities, then "Development strategy of revitalizing old industrial base in northeast china" and "Development strategy of the central China". Government opened a new chapter at the issue of reducing regional disparities. Premier Jiabao Wen proposed plans the coordinated development of regional economies in 16 Third Session report. The party's 16 Fifth Plenary Session and "11'st Five-year Development Strategy" further proposed to continue to advance the western, the northeast and the central of China's development, encourage the eastern area to take the lead to develop, coordinate various regional economies. This shows that the central government has considered promoting regional economic development, reversing the trend of widening regional disparities, narrowing the wealth gap and eliminating inharmonious factors in economic development, building a moderately prosperous society as a major task.In the background of building a socialist harmonious society, the existence and the expansion of regional disparity will restricts the building of harmonious society. How about the current economic development and trends? What caused the gap? What policies and measures should be taken to reduce the gap between rich and poor region? How to achieve steady-state level of economic development? The study of the series of questions has important theoretical and practical significance.This article reviews and summarizes the elaboration on the market size and economic growth in the division of labor theory, the new economic geography and so on. Based on different inequality indices, we measure the regional disparity since the establishment of socialist market economy system. We find the gap of per capita GDP and market size between different regions expand, but in the recent several year expansion's speed has slows down, per capita GDP gap appears to be narrowing. Then modified Solow model is used to test the impact of market on economic growth. The results show that the market size significantly affected the economic growth in all regions of China. Finally, according to the preceding analysis the policy recommendations are put forward which help to promote regional economic development and reduce regional disparity.This article uses market potential concept in the new economic geography to estimate our country various provincial capital areas the market size, and further study it's influence on the economic growth rate. This is a remarkable difference between this article and the other researches.