An empirical study of structural factors and regional growth in China

Based on data of 31 Chinese provinces over the period 1980–2004, the study in this paper presents new evidence on the effects of structural shocks and structural transformation on growth and convergence among the Chinese regions. The division of overall regional growth in labour productivity into three components – growth due to structural shocks, growth due to structural transformation and a ‘residual’ indicating growth due to region-specific changes – provides us with a better framework than the traditional one-sector Solow growth model for attributing growth and convergence to various different sources. Among other findings, the study has shown that during 1990–1999, structural shocks worked to widen the gap between rich regions and poor regions in China, while structural transformation worked to narrow the gap.