The Research On The Relationship Between The Urban-Rural Income Gap And The Economic Growth In Guangdong Province

The rapid growth of Chinese economy for 30 years has won the praise as the "China Miracle", meanwhile it has also brought problems such as the environmental degradation and the widening income gap, both of which often appear in the process of economic growth among the developing countries. The income gap, especially the income gap between urban and rural areas continues to widen because of the particular dualistic structure in Chinese urban and rural areas, the income ratio between urban and rural areas has reached a record 3.33 in 2009. All these phenomena indicate that it is extremely urgent to solve the problem of widening gap between urban and rural areas. Our government indeed paid close attention to this issue, the CCP Central Document No.1 is about agriculture, rural areas and farmers in eight consecutive years. Under these circumstances, Guangdong Province, where the Reform and Opening has gone deepest, is facing the increasingly serious problem that the gap between urban and rural areas is widening despite fast economic growth and rapid rise in per capita GDP. How is the income gap between urban and rural areas of Guangdong Province now? What is the relationship between this income gap and 30 years'economic growth? What are the forming reasons for this income gap? To understand these problems will have great practical significances for the accomplishments of comprehensive and sustainable development of Guangdong Province as well as provide the references and consults for other provinces.The article first summarized the development of theories of income distribution and economic growth as well as the empiric literatures, then introduced the evaluate index of income disparity and analyzed the change of income gap between urban and rural areas in Guangdong Province since the Reform and Opening, in addition, by using Theil's Index, the article successfully finished the decomposition of income gap in Guangdong Province. After doing the research on whether the Kuznets "inverted U curve" existed in Guangdong Province or not based on the time-series data and cross-sectional data respectively, the article, by taking advantage of ECM model, illustrated the mutual influences of short-term fluctuation in its urban-rural income gap and the economic growth as well as the relationship between this fluctuation and long-term equilibrium proved by the co-integration analysis. Furthermore, the article demonstrated that the Guangdong Province's economic growth is the Granger Cause of its widening income gap between urban and rural areas in long-term. In the subsequent analysis of forming reasons for the income gap between urban and rural areas, the article found the results different from what general theories thought and tried to give explanations. At last, according to the conclusions, the article put forward the corresponding suggestions in policy making.