The Impact Of Investment On Regional Urban Income Desparity And Convergence

Since the Reform and Opening up, China’s economy has developed rapidly. In2012, China’s GDP is51894.21billion.This accounting for the new increase in theglobal GDP share proportion reached20%, and China has become the world’s secondlargest economic entities.When our country’s economy develops rapidly, differences in per capita incomelevels has increased in all regions. According to the National Bureau of statisticsreleased data about the history of the Gini coefficient of income, China’s Ginicoefficient of income is0.479in2003and0.473in2004. China’s Gini coefficient ofincome showed a rising trend until2008,which is0.491. In2009the Gini coefficienthas falled down and in2013the Gini coefficient is0.473. This is the Ginicoefficient for five consecutive years in the fall after2009,and the lowest for nearlyten years. However, China still exceeds the national Gini coefficient of incomeinequality published cordon0.4. Per capita income gap has become a topic of concernfrom the public and scholars.According to economic growth theory and the development practice of the worldeconomy, investment has played a decisive role in the economic growth. In China,investment is one of the three carriages in the promotion of economic developmentand becomes the conventional policy measures to improve the country’s economicgrowth in recent years. If the quantity of investment is the main difference on theincome growth gap, then study the current situation of regional differences betweeninvestment and income growth in our country, explore the mechanism differences ofour investment on our income growth, measure the contribution of investment to theregional income convergence.The above study will provide the theoretical referenceand basis for making to narrow the regional income disparity by depending oninvestment strategy in each regions, which is the starting point of the research thesis.This thesis also uses the Solow Model of the new classical economic model indescribing overseas and domestic research status and analyzes the incomeconvergence in theory. This thesis selects30regions about our country’s(except Tibet)data to inspect China’s urban per capita income growth from2001to2012, analyzesthat China’s urban per capita income levels rise in these12years. Urban per capitareal income is6811.92in2001and rise to18766in2012.The average annual percapita income growth rate reachs9.65%. Our country’s urban per capital incomegrows, but at the same time that the differences between regions get obvious. Theeastern regional income growth is higher than the middle area and the westernarea, moreover, there also exists a certain income gap between different provinces.This thesis chooses the corresponding panel data from2001to2012, studys thestatus quo of China’s urban per capita income gap and gets following conclusions：1. In the research period, China’s urban per capita income exits convergenceand the income gap continues to narrow without adding any factors.The contribution of the eastern regions to narrowing our contury’s per capital income gap is greater,followed by the central region, and finally there is no income convergence in thewestern region.The eastern region’s per capita income convergence speed is higherthan the middle area’s per capita income convergence speed and there is no incomeconvergence speed in the western region.2.Adding the fixed asset investment rate, it contributes obviously to China’s urbanper capita income convergence on the whole.Seen from China’s urban incomeconvergence model,investment rate furtherly promotes China’s per capita incomeconvergence.3. Regionally, the impact of fixed asset investment on the income convergence ofthe western region is greater, the income gap between the western area doesn’t haveconvergence and have the convergence of state now under investment. From theabove, investment has promoted the urban per capita income to increase and alsonarrow urban per capital income gap in western area. The income gap of theeastern region and central region have been further reduced in the role of investment.