Analysis On The Factors Of "Club Convergence" In China's Eastern And Western Regions

Since reform and opening up, along with China's rapid economic growth, the gap between eastern and western regions becomes larger, but at the same time, the gaps among the provinces of eastern regions or western regions are narrowing, namely "convergence club" phenomenon. Based on neo-classical growth theory and the theoretical framework of the New Institutional Economics, combined with ex-isting research results, this paper tries to explain the "club convergence" phenomenon from a steady-state level of convergence and institutional environment convergence.First, this paper analyses the steady-state level and institutional environment o-f the eastern and western provinces, concluded that the economy steady-state level and institutional environment of the eastern and western provinces have lead to the phenomenon of "convergence club", which is particularly evident in the invest level and the degree of market.Secondly, in order to confirm that the steady state level and institutional environment "convergence club" is the reason of the Easton and western regions' convergence of economic growth, the paper has done some empirical researches on economic growth of eastern and western provinces. From the econometric analysis of the economic growth of eastern and western provinces, it can be concluded that the devotion level of elements and institutional environment play an important role in economic growth of eastern and western provinces, and that the club convergence of the steady-state level and institutional environment is closely related to the club convergence of economic growth. Finally, combining the above analysis, this paper argues that under the existing mechanism for economic growth, if relies on the own strength of western provinces, it can be easily trapped in the "poverty trap", rather than reduce the gap between the eastern and western regions.Therefore, we must adopt effective measures to break the low "convergence club" of the steady-state level and institutional environment in western regions, help the western regions get rid of the "poverty trap", narrow the gap between the eastern regions, and eventually realize the coordinated development of regional economy.