A Study On The Impact Of Economic Openness On China’s Income Gaps Among Regions

Since the economic reform, the rapid economic development, economic growth not only has greatly improved the income level of residents, but also to intensify the income gap.The income gap showed imbalance, regional and multi-level inter-industry. The long time excessive widening differences inevitably affect the overall efficiency of the economy,which is not conducive to the efficient allocation of resources. In addition, from the viewpoint of social and political stability,inter-regional imbalances which cause the income gap will also have a negative impact on social welfare. This article aims to analyze how economic liberalization affect on region income gap in China Eastern, Central and Western growing income gap in 1990s.This paper describes the theoretical basis of the foreign trade impact and regional income and summarized both domestic and international research on the relationship.Then use the data and charts to describe the status of trade, foreign direct investment and the income gap in terms of quantity, structure and forms. After analyzing the economic opening between how endowments influence through capital, technology, labor, and other elements of regional income gap region, by comparing the previous method of calculation of economic openness, the author uses the factor analysis method choosing five indicators to measure the degree of economic openness from trade, capital and produce. Next the author uses the data chosen from 1995 to 2013 to analyze the impact of economic openness on income distribution gap region. The conclusion is that the economic liberalization has exacerbated regional income disparities. In addition, technology and capital has expanded our regional income disparities, education has narrowed the income gap region in an open economy. Finally, the relevant policy recommendations was given on based on the analysis of empirical results.