The Empirical Study Of The Economic Development Gap Between East And West

Since China’s reform and opening up, China’s rapid economic development has made remarkable achievements. However, development gap between regions and within the region are widening. All sorts of problems brought by the unbalanced regional economic development have begun to gradually appear, and these issues are increasingly affecting the country’s stability, national unity. The regional economic development gap has become the focus of people.In recent years, the government realized the importance of narrowing the regional economic development gap and co-ordinating the regional development, implemented a series of measures, such as the western development strategy which is put forward in1999, the overall regional development strategy which is put forward in "decision" of the third plenary session of the16th proposed. These policies made an important contribution to the development of the west, but whether to ease the gap between eastern and western development is still unknown. If they have reduce the gap between eastern and western development, what’s the data of the development gap between east and west is still unknown. If the gap is also very big, what should we do to narrow the gap between eastern and western is still unknown.In order to answer these questions, it is necessary to have a empirical research.The first part is the research perspective of this paper. In order to know the real situation of the economic development gap between the east and the west after the policy of western development, the implementation of the overall regional development policy, we combine the theory with empirical, combine qualitative analysis with quantitative analysis. We use descriptive statistics and the single index method, convergence analysis method and factor analysis to research the present situation and the trends of eastern and western economic development gap.The second part introduces the main contents of this paper. The first chapter is introduction. It gives an outline of the background and significance, overviews the current research, and introduces the research contents methods and the main characteristic of this article. The second chapter is the descriptive statistics section. With ten years’data, this paper describes five aspects of the east and the west. These aspects are the economic level, the industry structure, the education level, the infrastructure, the urbanization level. The third chapter calculates the gap between eastern and western regions in economic development. Respectively on the basis of the corresponding theory, we use the coefficient of variation method, the Gini coefficient and Theil’s entropy index to measure the development gap between east and west. By comparing a decade of measured data, we get the changing trend of economic development gap between the east and the west. The fourth chapter is the research of convergence between eastern and western economic development. The fifth chapter is the index analysis comprehensive between eastern and western economic development. The sixth chapter is policy recommendations. In view of the present situation, there is a huge gap between the east and the west, so we should put forward some policy suggestions to narrow the economic development gap between the east and the west.The third part shows the characteristic of this paper. Firstly, this paper combines the qualitative analysis and quantitative analysis and mainly uses the quantitative analysis method, which breaks the simple qualitative methods we past used. Secondly, we use the method of convergence to verify the results of single index method so that we can improve the accuracy of the results of the study. Thirdly, use the method of factor analysis. This approach breaks through the bottleneck of only using descriptive statistics and measurement methods in the past. Fourthly, we contrast two years’results of factor analysis to find the changes of the economic development gap between east and west, and to look for the indicators which impact the total score function more.The fourth part explains the main conclusions of this paper. Firstly, in the eastern area, the level of economic, industry structure, education, infrastructure and urbanization are generally higher than the western area. However, the growth rate in the western area is generally higher than the eastern area. For the economic level, the economy gap between east and west has widened in10years, but the western region has a faster economic development speed. For the industrial structure, the eastern region has been optimized obviously. The western region, however, has no changes, showing that agriculture accounts for a great share of GDP. For the education, the education investment of western region is only a half of the eastern region in2003. But in2012, the education investment of western region has accounted for80%of the eastern region. For the infrastructure, the posts and telecommunications business per capita in2011and2012had decreased significantly. But considering the data from2003to2010, we found that the average annual growth rate of posts and telecommunications business per capita in western area is13%higher than the eastern area, leading to a shrink in infrastructure between these two areas. For the urbanization, both eastern region and western regions are in the period of accelerated urbanization. The gap of urbanization rate in these two regions decreased5%over a decade. Secondly, the data of variation coefficient and Gini coefficient which measured the development gap between eastern and western showed as follows:the development gap between east and west are narrowing gradually. According to the Theil’s entropy index, we decomposed total gap into different regional gap and within-regional gap. The calculated results showed that gaps between eastern and western regions and within eastern regions are narrowing gradually, with no changes in western area. Thirdly, according to the s-convergence and β-convergence analysis, we could see an absolute convergence not only on the whole, but also within eastern region. But western region showed no absolute convergence. Comparing with the indexes in the third chapter, we found the similar conclusions:the economic development gap between eastern and western region is narrowing, within eastern region is shrinking, and within the western region has no changes. Fourthly, by considering the comprehensive index and comparing the results of factor analysis in2003and2012, we found that the characteristic roots of the first factor decreased from6.443in2003to5.519in2012, which indicates that the first common factor variance has been reduced. So in the index which the first factor represents, the gap between provinces is narrowing. By comparing the total score function, we can see that the eight indicators:the per capita GDP, per capita income of rural households, average wage of urban workers in the post unit, per capita cost of postal and telecommunication services, the urbanization rate, medical person per million people own, per capita spending on education and the numbers of patents of per million people have a greater impact on the total score. And the proportion of tertiary industry, per capita income of rural households and average wage of urban workers in the post unit are increasing significantly. See from the rankings of22provinces in the eastern and western regions, this paper found that although seven provinces in eastern still occupied the top seven, the rankings of the rest of the two provinces were decline, so the rankings of the western region had increased, which showed that the economic development gap between eastern and western regions are shrinking. This conclusion is similar to that with single index method and the convergence analysis. But on the whole, the rankings of the eastern provinces are in the front of the western provinces. That is to say that there is still a big gap between eastern and western regions.