National market location, income levels and urban–rural inequality in China

This article examines the relationship between market distance, inter-provincial income levels and urban–ruralincome inequality in China. It uses the curve estimation method to determine the best-fit models forthe relationship. Regions near the market are found to have high urban and rural income levels and lowurban–rural inequality. As distance increases, rural income declines faster than urban income, resultingin rising urban–rural inequality. Myrdal's concepts appear to be applicable to the Chinese experience ofurban–rural inequality, and to explain why rural income declines with market distance faster than urbanincome. In remote regions, cities may have exerted a 'backwash' impact on their hinterlands, while citiesin provincial municipalities and autonomous regions near the market may have yielded spread effects.A model is proposed to describe the relation between market location and urban–rural, urban and ruralinequalities in China. The article compares market distance with other factors that affect urban–ruralinequality and provides theoretical and policy implications for reducing inequalities to achieve sustainabledevelopment.