China's Regional Disparities: Experience and Policy


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Shenggen Fan
15th September 2009, International Food Policy Research Institute (IFPRI), Washington D.C.

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China's Regional Disparities: Experience and Policy

  1. 1. China’s Regional Disparities: Experience and Policy Shenggen Fan International Food Policy Research Institute September 15, 2009 15
  2. 2. Why this panel discussion • Rapid economic growth in China has not benefitted everybody equally equally. • The Gini coefficient has reached 0.50, high than most of the countries in the World World. • Regional inequality and rural urban/divide are ce t a central to increased inequality. c eased equa ty • Inequality has become a top development agenda among scholars and p g g policymaking circle. y g • The government has asked for advice to tackle this problem for its next 5 year plan
  3. 3. pita GDP in 2008 Per capita GDP in 2008 Heilongjiang Inner Mongolia Jilin Xinjiang Liaoning Beijing Gansu Hebei Ningxia Shanxi Shandong Qinghai Shaanxi Henan Jiangsu Tibet Anhui Sichuan Hubei Shanghai Zhejiang Hunan Jiangxi Guizhou GDP Per Capita Fujian (yuan) Yunnan Guangxi G Guangdong d Taiwan Hong Kong $10,000 Macau < 10000 Hainan 10001 - 15000 15001 - 20000 $1,000 $1 000 20001 - 40000 > 40000 Urban/Rural income=3.3 Not included Inland/Coast income=2.2
  4. 4. The recent financial crisis poses both challenges and opportunity g pp y • The past growth has been mainly driven by export from coastal China China. • China’s coastal area has become more integrated to the global economic system • The western China has also benefited through migration g at o • The recent financial crisis had hit the coastal area very hard due to reduced imports from US, y p , Japan and Europe. • It is the western provinces that have shown higher growth than the national average. Page 4
  5. 5. Stimulus package: a strong regional focus • Total of $586 billion for 2009 and 2010, or 15% of its yearly GDP • with $106 billion for agriculture. • Strong focus on infrastructure, medical service infrastructure and income support for western China • The initial evidence has shown that it has worked. • GDP grew at 6.1% for the first q g quarter and 7.9% for the 2nd quarter. • It is the western China that has experienced even faster growth. Page 5
  6. 6. China’s growth pattern has global implications • In 2007 China accounted 27% of the global growth. growth • China transition from export oriented to domestic driven growth will offer export opportunities for many countries including developing countries. • China is the largest importer of cotto a d C a s t e a gest po te o cotton and soybean. • China’s imports of agricultural p p g products have also increased. Page 6
  7. 7. Total Trade from Africa to Total Agricultural Trade from China ($ billion) Africa to China ($ million) 25 1,800 1,600 1 600 20 1,400 1,200 15 1,000 800 10 600 400 5 200 0 0 2000 2001 2002 2003 2004 2005 2000 2001 2002 2003 2004 2005 Imports Exports Page 7
  8. 8. Questions remain • What would be trade-offs between overall national growth and more regional balance growth • Can we find win-win policies? win win • How can we go beyond GDP and income to include ot e de e op e t indicators like health, c ude other development d cato s e ea t , education or even happiness? Page 8