Rural-Urban Inequality in China: Spatial or Sectoral?

China Aktuell - Journal of Current Chinese Affairs, Vol. 6, 2006

Posted: 11 Dec 2006

See all articles by Carsten Herrmann-Pillath

Carsten Herrmann-Pillath

Max Weber Center for Advanced Cultural and Social Studies

Sheng Zhaohan

Nanjing University - School of Management Science and Engineering

Jiangu Du

Nanjing University - School of Management Science and Engineering

Tiaojun Xiao

Nanjing University

Kai Li

State Information Center, State Council of PRC

Jiancheng Pan

National Bureau of Statistics of PRC

Abstract

In recent years Chinese economic policy has re-emphasized agriculture and the rural areas because the gap between rural and urban incomes has widened again. This issue is also at the centre of the "Western development" strategy. However, it is not clear whether spatial factors determine the relative worsening of the rural position or whether there are still policy factors that discriminate against agriculture. This paper attempts to distinguish between sectoral and spatial aspects of inequality by applying decomposition analysis on a new set of prefecture-level data from 1993, 1998 and 2003. The database allows researchers to operate on different levels of aggregation (belts, macro-regions and provinces) and to identify the relative impact of pure spatial factors on total inequality as compared to the impact of the distinction between the rural and the urban sectors. We can show that trends in inequality differ across macro-regions, with individual provinces performing very differently to one another. The data clearly supports the view that there are still strong sectoral factors that drive the trends in total inequality. Hence, regional policies that aim at spatial factors may fail to achieve their goals.

Keywords: China, spatial income distribution, rural-urban disparities, decomposition analysis, prefecture-level database

JEL Classification: O15, O18, P25, R12

Suggested Citation

Herrmann-Pillath, Carsten and Zhaohan, Sheng and Du, Jiangu and Xiao, Tiaojun and Li, Kai and Pan, Jiancheng, Rural-Urban Inequality in China: Spatial or Sectoral?. China Aktuell - Journal of Current Chinese Affairs, Vol. 6, 2006, Available at SSRN: https://ssrn.com/abstract=950581

Carsten Herrmann-Pillath (Contact Author)

Max Weber Center for Advanced Cultural and Social Studies ( email )

Nordhäuserstr. 74
Erfurt, 90228
Germany

Sheng Zhaohan

Nanjing University - School of Management Science and Engineering ( email )

Nanjing, Jiangsu 210093
China

Jiangu Du

Nanjing University - School of Management Science and Engineering ( email )

Nanjing, Jiangsu 210093
China

Tiaojun Xiao

Nanjing University

Nanjing, Jiangsu 210093
China

Kai Li

State Information Center, State Council of PRC ( email )

China

Jiancheng Pan

National Bureau of Statistics of PRC ( email )

No. 75, Yuetan Nanjie
Sanlihe, Xicheng District
Beijing 100826
China

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