Title: Regional diversity in growth performance in China

Authors: John Hicks; P.K. Basu; Richard B. Sappey

Addresses: School of Business, Charles Sturt University, Panorama Avenue, Bathurst, 2795, Australia. ' School of Business, Charles Sturt University, Panorama Avenue, Bathurst, 2795, Australia. ' School of Business, Charles Sturt University, Panorama Avenue, Bathurst, 2795, Australia

Abstract: At the national level, China's amazing growth has been driven by increases in labour productivity. Initially, this was explained by increases in the capital/labour ratio, but, more recently, increases in total factor productivity (apparently as a result of increased spending on education) have become a more important part of the explanation. This paper examines the growth experience at the provincial level and finds it to have been very uneven with the East generally growing earlier than the West. Notwithstanding this, the data suggests that growth in all provinces tends to pass through the same stages. Initially, labour productivity increases because of the growth in capital and, later in the process, growth is maintained because of improvements in TFP emanating from improvements in education. We identify that an appropriate policy measure to assist in achieving balanced growth across the provinces is to continue to increase educational expenditures in the lagging provinces.

Keywords: China; Chinese provinces; regional diversity; growth performance; total factor productivity; TFP; education; labour productivity; economic growth; balanced growth; educational expenditure.

DOI: 10.1504/IJVCM.2012.045156

International Journal of Value Chain Management, 2012 Vol.6 No.1, pp.35 - 46

Published online: 16 Aug 2014 *

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