Explaining economic fragmentation in China: A systems approach

Recent research indicates that China's economic growth since the 1950s has been characterized by a strong tendency toward local self-sufficiency. This paper seeks to explain this tendency as an outcome of China's planning system. Descriptive and statistical evidence from a variety of sources is used to develop a schematic analysis of the planning organization and to identify distinctive features conducive to fragmentation. In particular, the evidence examined supports the hypothesis that regional partitioning of the Chinese economy for purposes of planning has created substantial and persistent barriers to internal trade across provincial and intraprovincial boundaries.