Regional economic performance in China

This paper investigates convergence patterns among China's provinces using GDP data for the period 1952-97. We analyze convergence behaviour on the basis of Markov chains proposed by Quah (1993) and the generalized entropy decomposition proposed by Shorrocks (1980, 1984). Both sets of results show similar evidence of convergence within the pre-defined geo-economic sub-regions, but no evidence is found of convergence between the sub-regions. This finding has important policy implications for regional economic development in China.