The Evolution of Regional Disparities in China, 1993-2003 : A Multi-Level Decomposition Analysis

The paper applies the standard decomposition analysis of the General Entropy Measure to a new set of GDP and sectoral income data for Chinese prefectures with three points of observation over a decade (1993, 1998 and 2003). Prefectures are arranged into regional subgroupings on different levels of aggregation, i.e. the belt, the macroregion and the province. We investigate the relative roles of inter- and intra-regional factors of total inequality. Main results include: There is a strong impact on intra-provincial factors, so that larger aggregation schemes may mislead regional policies; the level of urban inequality continues to be much lower and more uniform than rural inequality, however, with increasing urban inequality in the coastal areas; there is a clear trend towards greater inter- and intra-regional inequality which is driven by rural-urban disparities