An Analysis Of China’s Regional Disparity And Convergence

Since 1978, great achievements have been made in economic development in China. The growth of China’s economy has increased for more than 30 years, and its growth Gross Domestic Product rate remain at the top of the world. In 2014, the Gross Domestic Product is 63.6 trillion, an increase of 7.4% over the previous year. And become the second one of world’s GDP. While has a high-speed economic growth, however, economic development in the three regions is not a harmonious phenomenon, China’s regional economic development gap now is growing, it will be harmful to the stable and healthy sustainable development of social economy in our country. To narrow the gap in regional economy, we should analyze the reasons which lead to the differences in regional economic development in China.Based on the theories of economic growth difference and convergence theory as the theoretical basis, we employ standard deviation, extreme ratio, the Gini coefficient, the Thayer index to measure the regional economic gap in China and decompose it, and use empirical method to study the convergence analysis of economic growth in our country of the central and western regions and the eastern region. The study founds as follows: Gap between China’s three major areas is still large, the eastern region’s GDP accounts for 55.50% while central and western regions account for only 25.88% and 18.62% respectively. Secondly, the provincial economic development trend of relative gap is narrowing, but the absolute gap is still expanding. The gini coefficient of provincial per capita GDP decreased from 0.451 in 1978 to 0.371 in 2013,whereas the standard deviation rised from the original 536 in 1978 to 7019 in 2013. Third, the current income gap in China is mainly caused by the gap between regions, and the region industry mainly by internal industry gaps, especially the second and the third industry internal gap. Fourth, in the development of the western region as an example, to explore the western region economic development and economic convergence, it is concluded that the main impetus for promoting economic growth is physical capital investment, investment efficiency is not high. The degree of opening to the world, employment structure and human capital is still not fully play their roles, transport infrastructure construction impact on economic growth direction is not clear.So we suggest that: Strengthen the infrastructure construction of the central and western regions. And to attract foreign investment, to keep the local capital, adjust the different proportion of investment funding sources and improve the efficiency of investment. To consider more about the rationality of industrial structure while create the fundamentals of the industrial structure and economic environment.