Provincial disparities in post-reform China

Abstract Using conventional and novel techniques, the present paper analyzes the main characteristics of Chinese provincial disparities during the reform period, specifically between 1978 and 2007. After dismissing the presence of spatial dependence, three main results are obtained: first, provincial inequalities have basically followed a “V” trend; second, grouping China into three large regions shows that inequality mainly lies within each region, particularly in coastal areas; and third, the analysis of intra-distribution dynamics reveals that, although there was some significant mobility in provincial relative income, particularly until 1990, the whole period persistence in the ranking of income levels is a major feature. This might provoke some changes in the policy approach to dealing with spatial disparities.