Chinese Economy Convergence And Its Influence Factors

The existence of regional economic growth convergence has been a highly controversial topic, There is a lot of relative studies, but still can not come to the same conclusion. After sorting out the past literatures,we can find that the convergence does not exist in space and time consistency.Whether Chinese regional economic growth has a trend of convergence is also in dispute. Based on the analytical framework of neoclassical growth theory, the use of additional human capital Solow model with the actual situation in China, we firstly do theoretical analysis on Chinese regional economic convergence and its impact factors. We found that it’s difficult for China to have a trend of global convergence, but there is still possibility for the three economic zones having a club convergence, while the Chinese economic convergence is affected by the industrial structural factors, opening factors and market factors.Then, we did empirical tests on China’s 1999-2013 Provincial Panel of 31 regions, we used un-conditional β convergence model and descriptive statistical analysis method to examine China’s Global Absolute Convergence and the club convergence inside the eastern, central, and western economic zone. For descriptive statistical analysis we abandon the σ convergence research methods, but using statistical indicators of absolute variance, the purpose is to converge with the neoclassical analysis framework. Through empirical analysis, we found that China does not have unconditional convergence globally and has more divergent characteristics, in addition to the presence of three economic zone convergence club except a weak economy club convergence in central regions., which is a little different from the past literature, and supported the conclusion of theoretical analysis in Chapter 3 on some degree. Comparatively speaking, Chinese provincial economic disparities has a trend of widening compared with the past. Meanwhile, we did the conditional β convergence test on the global inter-provincial panel data, we found that under the control of physical capital investment rate, the same or similar levels of human capital, market factors, the opening factor and the industrial structure of these five factors, Our provincial per capita income level is showing a conditional convergence trend, it means that on Chinese economic growth convergence is influenced by these five factors.At the same time, by calculation, we get the convergence rate about 1.49% per year under the condition of keeping these five factors similar, slightly slower than the 2 percent in developed countries. These findings give us some policy implications, we can start from these conditions so that the backward areas can be strengthened in these aspects, in order to narrow regional income gap, to achieve common prosperity.