TRENDS IN REGIONAL INEQUALITY IN CHINA

In this paper, we examine the tendency towards convergence in real per -capita income among the provinces of China during the period 1952-199 3. Real incomes in Chinese provinces did not display strong convergenc e or divergence during the initial phase of central planning, 1952-196 5. During the cultural revolution, 1965-1978, regional inequality wide ned, as Socialist planning favored the already richer industrial regio ns at the expense of the poorer agricultural regions. It was only afte r market-oriented reforms began in 1978 that regional incomes began to equalize sharply. This convergence was strongly associated with the r ise in rural productivity, and was particularly strong within the grou p of provinces that were allowed to integrate with the outside world. Starting in 1990, although convergence continued within these coastal provinces, they have started to grow markedly faster than the interior , and thus regional incomes have started to diverge once again.