Regional Disparities among the Four Regions in the PRC

Great differences exist in terms of geography, resources, economic and social development, and culture between the PRC's coastal and inland regions. Since 1986 (the beginning of the Seventh Five-Year Plan) many studies have revealed obvious disparities among the eastern, central, and western regions in the PRC. In this paper we first analyze disparities among the four regions differentiated in the Eleventh Five-Year Plan.² The eastern region is more developed, with less than 9.6% of the nation's total area, more than 30% of the nation's total population, and over 40% of the total output. Table 1 shows the shares of population and GDP of the four regions.

As shown in Table 1 [ PDF 154KB | 1 page ], the share of output of the eastern region has risen from 43.8% in 1980 to 55.6% in 2005, with an increase of 11.8 percentage points over 25 years. Accordingly, the shares of output of other regions have declined somewhat since the PRC's reform and the opening up of its economy. From 1978 to 2005, the share of GDP of the central region dropped by 3.5 percentage points, while the shares of the western and northeastern regions shrank by 3.3 and 5 percentage points, respectively.

The proportion of population of the eastern region increased from 33.9% in 1980 to 35.8% in 2005, while the proportions of the other three regions declined by 0.5 to 0.8 percentage points. The population growth rate of the eastern region is higher mainly because of population migration across regions. But the increase in the share of population of the eastern region has been much smaller than the increase in its share of GDP, indicating that labor movement across regions is relatively slow.

Figure 2 [ PDF 154KB | 1 page ] shows that per capita GDP in the northeastern region was higher than that of the eastern region in the late 1970s. The ratio of per capita GDP in the northeastern region to that in the eastern region declined from 1.2 in 1978 to 1 in 1990; and the ratios of per capita GDP in the central and western regions to the eastern region also declined, but on a smaller scale, from 0.627 and 0.563 in 1978 to 0.567 and 0.529 in 1990, respectively. In the 1990s the gap between the eastern region and the other regions increased. The ratios of per capita GDP of the northeastern, central, and western regions to the eastern region in 1991 were 0.97, 0.52, and 0.51, respectively, and they decreased to 0.76, 0.45, and 0.40, respectively, in 2000. After 2000, the changes in these ratios were smaller than they were in the 1990s. In 2005 the ratios of per capita GDP of the northeastern, central, and western regions to the eastern region were 0.66, 0.44, and 0.39, respectively. Compared with 2000, the ratios of the central and western regions have been stable in recent years.

Figure 3 depicts changes in the ratio of maximum to minimum values of per capita GDP of the four regions. In 1978, the ratio of maximum to minimum value of per capita GDP was 2.14. There were almost no changes in the ratio in the 1980s and it reached its lowest point of 1.91 in 1990. But the ratio has been on the rise since 1990 and reached 2.58 in 2005, with per capita GDP of 24,024 yuan for the eastern region. In sum, disparities among the four regions measured in terms of changes in the ratio of maximum to minimum value of per capita GDP have been rising since the reform and opening up of the economy. However, the ratios of maximum to minimum value of per capita GDP were 2.57 and 2.58 in 2004 and 2005 respectively, suggesting that that the income disparity among the four regions has stabilized. Results of the Theil index show similar trends (see Figure 3 [ PDF 114.2KB | 1 page ]).

In the 1980s, the growth rates in per capita GDP of the four regions differed little, with the eastern region experiencing a slightly higher growth rate. Beginning in 1990, however, the per capita GDP growth rate of the eastern region accelerated. Especially in the early part of the 1990s its growth rate was much higher than those of the central, western, and northeastern regions. For example, the growth rates of per capita GDP in the eastern, central, western, and northeastern regions were 13.69%, 10.53%, 9.59%, and 8.59% respectively from 1990 to 1997; the growth rate in the eastern region was 3.1–5.1 percentage points higher than those in the other regions. After 2000, the eastern region maintained a higher growth rate, but the difference between it and the other regions has narrowed. The growth rates of per capita GDP in the eastern, central, western, and northeastern regions were 11.48%, 10.86%, 10.89%, and 10.64% respectively from 2000 to 2005; the differences were only 0.6–0.8 percentage point. As a result the income disparity among the four regions remains stable.

In short, there was declining regional disparity among the four regions of the PRC in the 1980s, which was mainly due to the continuous decline of regional disparity between the northeastern and eastern regions. In the 1990s, especially in the first half of the 1990s, there was a significant widening of the gap among the four regions. This was mainly due to the extraordinarily high economic growth rate of the eastern region compared to the other regions. Since 2000, although there is still growth of the disparities among the four regions, the rate of increase has become relatively smooth. Disparities in per capita GDP among the four regions were stable in 2003, 2004, and 2005.

Figure 4. Growth Rate of Per Capita GDP in the Four Regions (1979–2005) [ PDF 100.5KB | 1 page ]

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