Preliminary and Incomplete Draft
Economic Geography and Regional Growth in China
Sylvie Demurger
Centre National de la Recherche Scientifique
Centre d'Etudes et de Recherches sur le Developpement International
Universite d'Auvergne
s.demurger@u-clermont1.fr
Jeffrey D. Sachs
Center for International Development
Harvard University
jeffrey-sachs@harvard.edu
Wing Thye Woo
Economics Department
University of California, Davis
wtwoo@ucdavis.edu
Shuming Bao
China Data Center
University of Michigan
sbao@umich.edu
Gene Chang
Economics Department
University of Toledo
gchang3@uoft02.utoledo.edu
Andrew Mellinger
Center for International Development
Harvard University
andrew_mellinger@harvard.edu
April 24, 2001
Paper prepared for the inaugural meeting of the Asian Economic Panel held 26-27 April, 2001 at
the Sheraton Commander Hotel, Cambridge, Massachusetts.
April 24, 2001 draft
Economic Geography and Regional Growth in China
Sylvie Demurger, Jeffrey D. Sachs, Wing Thye Woo,
Shuming Bao, Gene Chang, and Andrew Mellinger
Introduction
Substantial disparity in regional incomes is a reality in every geographically large
country, and the causes of the disparity are numerous and complex. The enduring character of
many cases of regional backwardness is also a reality, for example, the Appalachians in the
United States, Northern Shaanxi in China, Chiapas in Mexico, and Madura in Indonesia. The
persistence of poverty in these locations has led many prominent social scientists to see the main
causes of entrenched regional poverty to be inter-related in a self-reinforcing or self-perpetuating
manner. Sociologists talk about the culture of poverty. Psychologists highlight the absence of
the drive to achieve. Classical Marxists expound about the systemic need of the capitalist
economy for a reserve army of unemployed. Latin American dependenistas see domestic
regional disparity to be the inevitable reflection of the neo-imperialistic relationships in the
international arena, the global metropolis-periphery arrangement reproduced within the
dependent economy. Finally, neo-classical economists explicate the working of local dynamics
that produce multiple equilibria, with the "low-income trap" being one of the stable outcomes.
Natural scientists too have their own discipline-based explanations for spatial inequality
in economic development. The most well-known recent example of which is the book, Guns,
Germs and Steel by the physiologist Jared Diamond (1997). One of Diamond's main arguments
is that many types of innovation (especially those in agriculture and construction) are not
applicable across ecological zones. So, in ancient times, while new improved varieties of crops
1
and beasts of burden can spread from northern Asia in the east to Europe in the west (and viceversa), they cannot be transmitted from the temperate zone in north America to the temperate
zone in south America because of the intervening tropics. Biological endowments also matter.
Most of Asia and Europe have more naturally-pliable livestock (horses and cows) that can be
harnessed to help in war and production. The African-equivalent of those animals, e.g. zebras,
hippopotamuses, antelopes and wildebeests, have proved themselves, up to today, resistant to
domestication efforts to turn them into beasts of burden. Even the African elephant is
temperamentally uncooperative compared to its Asian cousin.
There is clearly no shortage of explanations for regional disparity and its, sometimes
centuries-long, durability. This surfeit of views is suggestive of ignorance about this
phenomenon, and confusion about what to do about it. What is clear however is that the
successful development strategies of some countries cannot produce the same salubrious results
when implemented in other national settings. When China opened some coastal pockets for
foreign direct investment, these Special Economic Zones (SEZs) quickly blossomed into vibrant
export platforms and created backward linkages with the immediate hinterland. Whereas, when
landlocked Mongolia turned the entire country into a free trade and investment zone in the late
1990s, the inflow of foreign capital was a mere trickle compared to China's experience. The
specific lesson in this case is that the time-tested effective growth policy package for a coastal
economy, and minor modifications of it, are unlikely to work for an interior economy.
Public concern for regional income disparity in China has been increasing quickly since
the early 1990s. This concern is rooted in the widening of provincial income gaps that started in
the 1988-93 period, with the exact timing dependent on the method of measurement. Figure 4.1
shows that the coefficient of variation of provincial incomes for 29 provinces fell from 0.73 in
2
1978 to 0.63 in 1989 and then rose to reach 0.70 in 1998. 1 By 1995, the obvious rise in regional
inequality had caused the international news media to raise the possibility of the political
disintegration of China. 2
The "optimistic" scenario for China's breakup is an amicable one. The affluent provinces
could now afford to quietly ignore the authority of the central government, or to indirectly
control the central government – a situation of de facto political independence for the affluent
provinces. The May 11, 1995 issue of the Far Eastern Economic Review carried on its cover the
heading "Fragile China: Affluent Regions Go Their Own Way", and it reported that the political
scientist Susan Shirk:
"knows of a half-dozen provincial functionaries who 'have declined promotions to
Beijing and opted to stay at home to get rich and exercise informal political influence.'
With regional fortunes so drastically on the rise, Shirk says, national politicians are
tempted to play [to] the provinces and outbid each other in pandering to local interests."
The "pessimistic" scenario for the political disintegration is a civil war sparked by the
resentment of the poor provinces. According to the economist Hu Angang who advocates the
abolition of the special economic zones:
"If Deng Xiaoping knew the disparities were as big as they are, he would be more
militant than I am in trying to eliminate them ... In America, the deep differences between
the North and the South more than 100 years ago led to the Civil War."3
"We must cease subsidizing rich coastal cities. Preferential treatment should be reserved
for the poor."4
1
Leaving out Beijing, Shanghai and Tianjin, Demurger (2000) used Lorenz curves to determine that regional
inequality increased after 1990.
2
This important political backdrop explains why some of the recent outstanding books on China's economic
geography are written by, or with, political scientists, e.g. Cheung, Chung and Lin (1998), Wang and Hu (1999), and
Yang (1997).
3
"Deng's Economic Drive Leaves Vast Regions of China Behind," New York Times, December 27, 1995.
4
"China: A Chinese New Deal," Newsweek, October 9, 1995. The South China Morning Post ("Clash over
shrinking coffers," September 23, 1995) reported that "Mr. Hu slapped the SEZs in the face by accusing them of
ripping off the rest of China – and widening the regional gap – by abusing the special policies granted them by the
Centre ..[and he] concluded that the zones 'should no longer be allowed to remain special'."
3
Regardless of whether it is concern for social equity or for social stability, China's top
leaders have now clearly committed themselves to accelerating the economic growth of the
interior provinces. The budget for infrastructure investments in the poor provinces have
increased substantially every year, and a Western Region Development Office has just been
established under the State Council (the Chinese cabinet) to formulate a comprehensive
development strategy and to coordinate its implementation.
This paper seeks to integrate some recent advances in regional science, ecology and
geography into economics to arrive at some preliminary findings on the barriers to economic
growth in China's interior provinces. In particular, we present estimates on the role contributions
of preferential economic polices and geographical location to the growth of China's provinces.
The quantification and policy suggestions presented here are necessarily tentative and primitive
because this is the first phase of our collective efforts to understand this longstanding problem of
large regional inequality in China's history.
The Importance of Geography
On a global scale, the wealth of nations is well characterised by two geographical divides.
The first geographical divide emphasizes differences in ecological conditions, the temperate zone
versus the tropical zone. The second geographical divide emphasizes differences in the ability to
conduct international trade, the coast versus the interior. As we will show, both of these
geographical divides are a combination of independent causes of economic wealth and of proxies
for some important determinants of economic prosperity.
The empirical validity of the temperate-tropical divide is well-vouched for by the fact
that over 90 percent of the world's poor lives between the Tropic of Cancer and the Tropic of
4
Capricorn. The result is a GDP per capita (PPP-adjusted) of $3,326 in 1995 for tropical
economies, and $9,027 for nontropical economies. This strong correlate between ecological
zone and income level is not a new observation in economics, e.g. Lee (1957) and Kamarck
(1976), but it has not been a major analytical organizing principle in development economics.
The incorporation of new insights from physical geography and societal dynamics have led Jared
Diamond (1997), David Landes (1997), Stanley Engerman and Kenneth Sokoloff (1997) and
Gallup, Sachs and Mellinger (1998) to focus on physical geography as an over-arching
explanation of economic performance.
Because most of Africa lies in the tropical zone, Bloom and Sachs (1998) have identified
the virulence of diseases and the limited potential for large gains in agricultural productivity in
the tropics to be the key obstacles to economic development there. This biology-based analysis
of Bloom and Sachs is of course not the only recent attempt to explain the upward income
gradient that begins at the Equator. Hall and Jones (1997) have suggested that the distance from
the Equator proxies for the relative penetration of European economic institutions, and
European-style economic institutions are the ultimate engines of growth.
The coast-interior dichotomy highlights the importance of transportation cost in
determining a country's participation in the international division of labor. In the industrial age,
water transportation has the lowest cost for extended distance. 5 The growth effects of trade are
well-known, beginning with Adam Smith's observation that productivity improvements are
enabled by the greater division of labor that, in turn, is enabled by the expansion of the market.
5
For example, the industrialization of central Europe was helped by the navigability of the Danube.
5
The clear policy lesson here is that investments in physical infrastructure and transportation
technology can change the comparative advantage of a region. 6
The temperate-tropical dichotomy will not be a major analytical organizational principle
in this paper. This is because China, unlike Brazil and Australia, does not have a substantial part
of its territory within the tropical zone. The southern border of China extends only a little miles
beyond the Tropic of Cancer. This feature is of interest in itself because it is more than
coincidental that after centuries of steady southward expansion, the Chinese empire stopped at
approximately where the tropical zone begins. While we will not dwell on the temperate-tropical
divide, the general point about differences in the development potential of different ecological
zones is an important one. The appropriate development package for the arid plateaus of
northwestern China has to be different from the grain-growing plains of central China, and the
relevant development package for the wet, warm southwestern provinces has to take disease
vectors into greater account.
China in Time and Space
China covers 9.6 million square kilometers and stretches from the temperate to subtropical zones. It is similar in size and climate to the United States but its topography is quite
different. The most important difference being that the U.S. has coastlines running the length of
its eastern and western borders, whereas western China is landlocked. China is also more
mountainous and hilly, with plains at less than 500m elevation making up only 25 percent of the
total land area, and mountains and plateaus accounting for 60 percent. These topographic
features of China imply higher transportation costs and a greater requirement for physical
6
For example, the connecting of the Great Lakes to the Atlantic by the Saint Lawrence Seaway accelerated the
industrialization of the northern part of the American Midwest.
6
infrastructure construction. The task of economic development in China is hence more
challenging than in the U.S..
Physically, China resembles a three-step staircase running downward from west to east.
It begins with the 4,000 meters high Qinghai-Tibet Plateau in the west, proceeds to the highlands
and basins in the center which are about 1,000 to 2,000 meters above the sea level, and ends with
hilly regions and plains that are less than 1,000 meters high. The combination of higher
precipitation, warmer climate, and access to navigable rivers and the sea have made the central
and eastern provinces more conducive for farming and trade, and, hence, the population centers
of China. The Qinghai-Tibet Plateau was traditionally the poorest region.
The location of China's economic center has changed over time, moving eastwards from
the Loess Plateau and the Yellow River Valley in the northwest (where Chinese civilization
began in 2000 BC), which is about 1000 kilometers away from the coast. The reason for this
original location is because, in ancient times, high agricultural productivity and land-based trade
was much more important than sea-based trade. The bulk of China's international trade at that
time was conducted through the famous Silk Route that went through the northwestern corner of
China. The southeastern coastal region, where Guangdong and Fujian (two of today's most
dynamic provincial economies) are located, was largely remained uncultivated and sparsely
populated in early Chinese history. Although the natural conditions in the southeast were
favorable for agriculture, farming was undeveloped because malaria ('zhangqi' in Chinese) and
other subtropical diseases checked population growth, and the high temperature sapped human
energy faster, resulting in lower labor productivity. Guangdong was considered an almost
uninhabitable place in ancient times. 7
7
The great Chinese poet of the 11th Century, Su Dongpo (1037-1101), who was banished by the emperor to
Guangdong wrote that the only saving grace living there was the abundance of the lichee fruit: "Having three
7
Over time, the pressure of expanding population and the frequent invasions by the
northern tribes caused more of the population to move south and into the mid-coastal and
southeastern regions. By the 12th century, the Yangtze River valley had become very developed
and densely populated. The economic importance of the coastal region increased dramatically
after the Opium War in 1840 when the Western powers forced China to first open several ports
and then the whole country for trade. China's economy and subsequently politics were quickly
(by historical standards) transformed. International trade expanded, foreign direct investments
flowed in, and local industrialists made their appearances, especially in the mid-coastal and
southeast regions. The Qing dynasty was overthrown in 1911, followed by a long chaotic period
of protracted civil wars and Japanese colonialism, that ended with the declaration of the People's
Republic of China on October 1, 1949 by the Communist Party of China (CPC) under the
leadership of Mao Zedong.
Table 1 summarizes some key geographical and economic characteristics of China in the
six regional groupings that are useful for analyzing the post-1978 period 8 .
1. The municipalities of Beijing, Tianjin and Shanghai that have province-level status
(Chongqing was granted province-level status in 1997, but we have included its data under
Sichuan province). These are the richest pockets of China, and have had high growth in the
1990s. These cities are highly industrialized, and over 71 percent of their population lives
within 100 kilometers of the coast or navigable waters. Beijing, Shanghai and Tianjin are the
exceptionally rich (city) provinces.
hundred lichees daily, I do not mind to be a person living in the south of Nanling Mountain (where Guangdong is
located)."
8
As to be noted later, the geographical delineation of China has varied from one study to another. As the same term
(e.g. coastal) can refer different subsets of provinces, we shall try to indicate to the reader whenever the regional
term changes meaning in our discussion of the literature.
8
2. The northeastern provinces of Heilongjiang, Jilin and Liaoning, which are collectively called
Manchuria, and was the industrial heartland of China in 1949 (because of the Japanese
control of the economy that started in 1905 9 ). During the central planning period, their early
start in industrialization was consolidated, making these provinces the part of China that most
resembled the Soviet Union in industrial organization and production structure. In the
national ranking of per capita GDP, omitting the three municipalities, Heilongjiang and
Liaoning ranked first and second, respectively, in 1978, and ranked seventh and fifth,
respectively, in 1998. Heilongjiang and Liaoning are the traditionally rich provinces.
3. The coastal provinces of Hebei, Shandong, Jiangsu, Zhejiang, Fuijian, Guangdong and
Hainan (Hainan was separated out from Guangdong in 1988). These seven provinces have
82 percent of their population living with 100 kilometers of the sea or navigable rivers. They
have grown the fastest of these six groupings in the 1978-1998 period, an annual average of
10.7 percent. The result is that Zhejiang and Guangdong have soared to the top of the per
capita GDP ranking, omitting the municipalities, from fourth and sixth, respectively, in 1978
to first and second, respectively, in 1998. Zhejiang and Guangdong are the archetype of the
nouveau riche provinces.
4. The central provinces of Shanxi, Henan, Anhui, Hubei, Hunan, and Jiangxi, through which
the plain runs relatively unimpeded from the north of the Yellow River to the south of the
Yangtze River. The temperature and rainfall make this region the agricultural heartland of
China, which explains why its population density is almost twice that of the northeaster and
southwestern regions. The two large rivers and their many tributaries endow 57 percent of
9
The Japanese started its economic penetration into Manchuria in 1895 after defeating China over the control of
Korea, began its economic domination from 1905 by taking over Russian economic interests, rendered Manchuria a
puppet state after 1911, and formally annexed Manchuria in 1935.
9
the population with easy water transportation. The Yangtze between Wuhan and Shanghai
has the industrial potential of the Rhone Valley multiplied several times.
5. The northwestern provinces of Inner Mongolia, Shaanxi, Ningxia, Gansu, Qinghai, Xinjiang
and Tibet (data of Tibet omitted) are truly isolated. The center of the land mass is 1,400
kilometers from the coast. This region is more arid and steeper compared to the four
previous groupings, and it is marked by desert on its western and northern borders.
Furthermore, 5 percent of the land has a slope of greater than 10 percent compared to 2.5
percent for the northeastern, coastal and central provinces. The general lack of water makes
the region difficult for agriculture, only 8 percent of the land is arable, which helps explain
why it has the lowest population density in China in 1998, 46 persons per km2 versus 126
persons per km2 in the southwestern region, which has the next lowest population density. A
large number of residents are of Turkic origin, and are practicing Muslims.10 The Han
people are in the minority in Xinjiang and Tibet.
6. The southwestern provinces of Sichuan, Yunnan, Guizhou, and Guangxi have rainfall and
temperature conditions that are ideal for crop cultivation but they suffer from being too
mountainous. The average elevation is 1,400 kilometers, the average slope is 5.2 degrees,
and 14 percent of the land has a slope of greater than 10 degrees. The proportion of arable
land of 10 percent is barely above that of the arid northwestern provinces. Lacking the
mineral resources of the northwestern provinces, the southwestern provinces have the lowest
10
In the 1950s, 3.5 million of Xinjiang's population of 5 million were Muslims Uighurs, with Han Chinese
accounting for less than 200,000. It is estimated that 6 million Han Chinese have settled there since then, bringing
the total population to about 16 million in 1994, with 62 percent over half belonging to non-Han ethnic groups.
Data are from "Wang Enmao, 87, Who Ruled a Rebellious Chinese Province," The New York Times, April 23,
2001, and "Xinjiang's Minorities Feel Torn Between Desire for Independence, Benefit of Economic Reform," The
Asian Wall Street Journal Weekly, September 5, 1994.
10
GDP per capita in 1978, and the lowest growth rates in the period of market-oriented reform.
A significant proportion of the population belongs to non-Han ethnic groups.
Regional Economic Policy, 1949-1978
Industrialization was shallow in 1949, and a largely coastal phenomenon. 11 In 1952, the
secondary sector produced 8 percent of GDP and employed 7 percent of the labor force
compared with the primary sector, which produced 74 percent of GDP and employed 84 percent
of the work force. The coastal provinces had 72 percent of fixed assets, and accounted for 69
percent of the gross value of industrial output. Naturally, just like the Communist Party of the
Soviet Union in 1917, CPC saw its most important economic task to be industrialization.
China adopted the two key sets of guiding principles behind the Soviet development
strategy: (a) the Marxist principles of common ownership with the state as trustee, and of
generalized egalitarianism; and (b) the Stalinist practices of central planning for resource
allocation, suppression of light industries and services in favor of heavy industries, and
minimizing trade and financial linkages with the capitalist economies.
Mao added a third guiding principle to China's economic policy-making, the principle of
regional economic self-sufficiency, a region should be self-sufficient not only in food production
but also in industrial goods as well. This third principle had unquestionably the greatest impact
on regional economic outcomes. The self-reliance principle had several virtues. The first was
that it overlapped with the egalitarian principle because it reduced provincial inequality, which
11
In this section, we use Dali Yang's (1997) classification of coastal, central and western provinces, which is the one
commonly used in official publications. Yang defined coastal provinces to be Beijing, Tianjin, Hebei, Liaoning,
Shanghai, Zhejiang, Fujian, Guangxi, Jiangsu, Guangdong, Hainan (separated out from Guangdong in 1988), and
Shandong. The central and western provinces are collectively called interior provinces. The data are from Table 2.2
in Yang. Shaoguang Wang and Angang Hu (1999) used two schemes: (a) metropolitan cities, eastern provinces,
central provinces and western provinces (e.g. Table 3.1), and (b) coast, central and west (e.g. Table 6.1). Wang and
11
Mao had identified to be one of the key social contradictions to be eliminated in the new China. 12
The second virtue was that the biggest beneficiaries of the self-reliance principle were the
poorest provinces (because they were overwhelmingly agricultural), and this was in accordance
with the gratitude that many veteran party leaders felt toward these provinces. Many of the
poorest provinces were where CPC had retreated to and rebuilt their strength after the
Kuomintang had driven it out of the urbanized areas. 13
The third, and most decisive, virtue of self-sufficiency was that, beginning in 1963, it
coincided with the national security considerations of China. The worsening Sino-Soviet
political relationship and the growing military presence of the United States in Vietnam
convinced Mao that regional economic self-sufficiency was key to China being able to engage in
protracted defense of the motherland. Mao and his generals envisaged three lines of defense
(coastal, central and western), and they decided in 1964 on a massive construction of militaryindustrial complexes in western China, the third line of defense, popularly translated as the "third
front." To minimize the vulnerability of the third front industries to air attacks, Lin Biao, then
the Defense Minister and Mao's designated successor, instructed that these projects be located
"in mountains, in dispersion, and in caves."14
The first two virtues of the self-sufficiency principle helped to ensure that the First FiveYear Plan (1953-1957) allocated 56 percent of state investment to the interior provinces, and that
the Second Five-Year Plan (1958-62) allocated 59 percent. As the concern for national security
grew in the early 1960s, the Third Five-Year Plan (1966-1970) allocated 71 percent of state
Hu's definition of coast corresponds to that of Yang, and it equals, in their first classification, metropolitan cities
plus eastern provinces plus Guangxi (a western province).
12
Mao (1956).
13
According to Kevin Lane (1998): "Yan'an [in Shaanxi] became the cradle of the Chinese revolution and earned a
lasting place in the hearts of party members who lived there.... The First Five-Year Plan (1953-1957) targeted the
province as a key site for industrial development, and 24 of the plan's 156 major projects undertaken with Soviet
assistance was located there."
12
investment in the interior provinces, with the bulk of it in Sichuan, Hubei, Gansu, Shaanxi,
Henan, and Guizhou. Furthermore, many companies in Shanghai and other coastal cities were
relocated to the mountains in Guizhou, Sichuan, and Hubei, where highways and railroads were
deficient or non-existent, water and electricity were in shortage, and the sources of raw materials
were far away. A significant proportion of the relocated factories could not produce anything for
many years, with the equipment rusting into junk.
Post-mortem studies of the third front industries concluded that:
"only half of the factories built performed to design specifications and the rest were either
only partially completed (30 percent) or not completed at all (20 percent). Fully onethird of the total investment was wasted..."15
One such example of wastage was the Second Automobile Company built in the mountains of
Hubei. The part and assembly plants were scattered over the mountainous region, transportation
among the plants was poor, and they were long way away from their input suppliers and the final
consumers of their products.
Given the large amount of wastage that occurred in the industrialization of the interior
provinces, it is no wonder that even though the interior share of fixed assets went from 28
percent in 1952 to 57 percent in 1983, its share of gross value of industrial products only went up
from 31 percent to 41`percent. The primary cause of the higher productivity of coastal industries
was that the coastal provinces had deeper pools of management and technical expertise, better
linkages between the industrial enterprises and the local economies, and more developed
infrastructure. It was been estimated that 100 yuan of fixed asset investment in 1978 yielded 70
yuan of output from the third front enterprises compared to 141 yuan from the coastal
14
15
Quoted in Yang (1997, pp. 19)
Yang (1997, pp. 19)
13
enterprises. The profit rate in 1978 was 9 percent for the third-front enterprises compared to 23
percent for coastal enterprises. 16
The pouring of investment funds into the interior provinces was a clear violation of the
comparative advantage principle. The growth of the interior provinces not only occurred at the
expense of the coastal provinces, it also lowered the overall growth rate of the economy. The
discrimination against the coastal region was so severe that although Shanghai provided more 40
percent of the state revenue during the Cultural Revolution period, it was not even allowed to
retain enough funds money to cover depreciation of its capital stock.
The wastage that occurred with this discrimination against coastal investments was
further increased because of the poor planning, poor execution and poor management of the
investments in the interior provinces. As we will argue later, the appropriate development
strategy for the interior provinces should not be focussed on making the production structure of
interior provinces identical to the production structure of the coastal provinces. For example,
given the strong extractive capacity and implementation ability of the government under Mao, it
would have been more efficient to have located the investments in the coastal provinces, taxed
the profits, and used the tax revenue to benefit the interior benefits. What should have been
important for the government was not where the investments were located but whether the
dividends from the investments were used to enhance the development of the interior provinces.
It is interesting to note that by 1972, China was reducing its discrimination against
investments in the coastal provinces and increasing its economic interaction with the capitalist
economies. This policy shift occurred because the government realized that China's economy
and technological capacity was falling further behind the rest of the world. If this negative trend
were not reversed, China might not be able to defend itself. Furthermore, because the Soviet
16
Data from Yang (1997).
14
Union was fast becoming a bigger threat than the United States, an invasion by the traditional
land route was therefore much more likely than a coastal landing. The national security
justification for the third front industries was hence undermined. Economic modernization
required the import of foreign technology, and this necessitated that China increased its export
earnings.
With the improvement of Sino-US relations on course after Kissinger's secret visit in July
1971, the coastal enterprises, especially those in Guangdong, were expanded in order to increase
their export capacity. Total export earnings jumped from US$2.6 billion in 1972 to US$3.4
billion in 1973, and continued soaring to reach US$9.8 billion in 1978. Just as national security
considerations in the 1950s and 1960s have played a large part in justifying the bias in favor of
investments in the interior provinces, national security considerations in the face of changes in
international politics in the 1970s helped to reverse this bias.
Regional Economic Policy, 1978-98
The process of increased economic interaction with the outside world accelerated at the
end of 1978 upon the decisive political victory by the rehabilitated cadres over the remnants of
the Maoist establishment at the Third Plenum of the 11th Party Congress. The emphasis on the
domestic front was the decentralization of agricultural production, the decentralization of the
fiscal system, and the deregulation of prices; and the emphasis on the international front was the
Open Door Policy.
Fiscal decentralization took the form of tax contracting between the central government
and the provinces. 17 Each fiscal contract was individually negotiated, and it ranged from fixed
lump-sum contracts for five years like in the cases of Guangdong and Fujian to highly
15
complicated (province-specific) revenue-sharing formulae. The provincial governments in turn
negotiated individual revenue contracts with the local governments. Since the marginal tax rate
set by the central government varied tremendously across provinces, the incentive of the
provincial and local governments to engage in local economic development in order to generate
tax revenue also varied tremendously. Given the importance of Shanghai to the central coffers,
its marginal tax rate was set higher than that of most coastal provinces until the early 1990s.
The fiscal decentralization might have helped economic growth18 , but this led to state
revenue declining from 35 percent of GDP in 1978 to 14 percent in 1992, producing a near fiscal
crisis for the state. The state lacked the funds to invest in infrastructure projects to remove
production bottlenecks, and to undertake poverty alleviation programs. The practice of each
provincial government covering more of its expenditure from local revenue necessarily meant
reduced development expenditure in the poorest provinces that had been receiving fiscal
subsidies from the center. The tax reform of 1994 that had the value-added tax as its centerpiece has reduced the discriminatory elements of the fiscal system, and restored the fiscal
capacity of the state to help the poorer provinces.
The deregulation of prices in the industrial sector mainly took the form of a dual track
price system for industrial inputs. Since the central and western provinces were the main
suppliers of raw industrial materials, the continuation of artificially low prices for these industrial
inputs meant that the dual track pricing system was in effect transferring income from the
interior producers to the coastal factories. The elimination of the dual-track price system in the
1990-91 period was an equitable move from the viewpoint of regional disparity.
17
18
For details, see Wong, Heady and Woo (1995).
The evidence on this front is mixed, e.g. Chen (2001), see the critical review in Woo (forthcoming).
16
The Open Door Policy was initially limited to two southern provinces (Guangdong and
Fujian), then gradually extended to larger geographical units: first along the coast, then in the
inland provinces. The distributional consequence of this selective opening-up process was a
heavy concentration of foreign investment flows and international trade activity in the coastal
provinces, particularly Guangdong. The dominance of Guangdong is a natural consequence of
the fact that this province is one of those having received the greatest benefit from the open door
policy, notably through the establishment of the three Special Economic Zones of Shenzhen,
Zhuhai and Shantou as early as the beginning of the 1980s.
The implementation of regional preferential policies has gone through 3 broad stages
during which open economic zones have been settled to provide investors with various
preferential tax treatments, exemptions on duties, etc 19 .:
1. Early 80s: limited extent to Guangdong and Fujian provinces, with the establishment of
Special Economic Zones (SEZ) in 1979-80.
2. Mid to end of the 80s: coastal preference strategy enforcement, with the designation of
Coastal Open Cities (COC), entitled to settle their own Economic and Technological
Development Zones (ETDZ), in 1984, followed by the establishment of Coastal Open
Economic Zones (COEZ) in 1985, an Open Coastal Belt (OCB) in 1988 and the Shanghai
Pudong New Area in 1990.
3. Early 90s: further extension towards whole China, after Deng Xiaoping southern tour in
1992. During this year, new open economic zones were officially started in Major Cities
along the Yangtze River (MC), Border Economic Cooperation Zones (BECZ), Capital
Cities of inland provinces and autonomous regions (CC), ETDZ and Bonded Areas (BA).
19
Details on the different preferential policies applied in these zones can be found in Yang (1997, chapter 3), Ma
(1999, chapter 7), Wang and Hu (1999, chapter 6), Chen (2000) and Démurger (2000, annex 1).
17
Table 2 gives additional details of the establishment of these various types of economic
zones over time. As pointed out by Yang (1997) and Ma (1999), the acceleration in the openingup process in 1992 led to an inflated number of so-called open economic zones set up by local
official without proper authorization. Besides the official policy launched by the State Council,
the 30 provinces, as well as hundreds of counties and townships indeed started to formulate their
own preferential policies for foreign investment in specific “development zones”. As a
consequence of this “zone fever” (Yang, 1997, p. 53), there were around 2,000 open economic
zones of any kind at and above the county level by 1993 (and probably even more below the
county level), offering tax exemptions and reductions of all sorts in order to attract investment.
Following the implementation of the austerity program in 1993, most of these unapproved zones
have been closed 20 , and regional policies have tended to equalize over time (at least up to the end
of the 90s).
The gradual geographical extension of the reforms brought about a highly unequal
regional distribution of foreign capital flows throughout the period. In 1983, nearly 93 per cent
of foreign direct investment went to the coastal provinces, including 69 per cent for Guangdong
alone. This imbalance decreased slightly over time, but 88 per cent of foreign direct investment
(FDI) flows still went to the coastal region in 1996; however, the share of Guangdong had
dropped sharply (to 28 per cent) in favor of other coastal provinces such as Fujian, Jiangsu and
Shanghai, which attracted approximately 30 per cent of total FDI. If we reason in terms of
disparities, as above, these developments indicate a trend towards equalization within the coastal
zone. In the inland provinces there are inverse trends, however, between an increase in the
20
For example, the central government closed 1000 of the 1,200 economic development zones (EDZs) that it had
not authorized in the coastal provinces of Liaoning, Hebei, Shandong, Jiangsu, Zhejiang, Fuijian, Guangdong and
Guangxi; "State closes 1,000 EDZs to better efficiency," China Daily, August 13, 1993.
18
central region’s share of FDI over time (from 1.1 percent in 1983 to 9.5 percent in 1996) and a
decrease in the western region’s share (from 6 percent to 2.5 percent).
The cumulative FDI flows for the 1983-96 period was 88.3 percent to the coastal
provinces, 8.3 percent to the central provinces, and 3.4 percent to the western provinces.
Guangdong received 30 percent of it.
Examination of international trade reveals the same inequalities between coastal
provinces and inland provinces. At the national level, exports grew at an average annual rate of
17 per cent over the 1978-96 period 21 , but once again it was Guangdong that derived the greatest
benefit from this growth. In 1978, Guangdong was the third-ranking province in terms of
exports, after Shanghai and Liaoning, but in 1996 it was far ahead of the other provinces and
accounted for 34 per cent of China’s exports. As in the case of FDI, the coastal provinces were
much more export-oriented than the inland provinces, and although the coastal region’s share of
total exports fell over the period (87 per cent in 1996 versus 93 per cent in 1978), it remains very
high. 22 The share of exports in GDP is also four to five times higher in the coastal region (30 per
cent in 1996) than in the two other regions (around 6 per cent each).
The geographical distribution of imports has changed very little since 1978, and the
figures for 1996 are very similar to those for exports: 87 per cent, 8 per cent and 5 per cent
respectively for the coast, the center and the west. As was the case for exports, the structure of
imports within the coastal region changed in favor of Guangdong province (whose share in total
imports rose from 26 per cent in 1978 to 40 per cent in 1996) to the detriment of the municipality
of Shanghai in particular.
21
Measure in constant yuan.
The center's share of export went from 5.6 percent in 1978 to 9.3 percent in 1996, and the west's share increased
1.7 percent to 3.9 percent.
22
19
The high level of foreign trade activity in the coastal provinces is generally linked to that
of FDI, since foreign enterprises are supposed to be inherently more export-oriented than
domestic firms. Indeed, the contribution of foreign firms to China’s total foreign trade has grown
since the mid-1980s. Exports by firms with foreign ownership amounted to 41 per cent of total
exports in 1996, as against 1 per cent in 1985. Enterprises established in the coastal region
accounted for nearly all of these (98 per cent on average in 1994). Moreover, the share of
foreign firms in total imports rose from 5 per cent in 1985 to 54 per cent in 1996, since such
firms on the whole imported more than they exported. As in the case of exports, the import share
of foreign firms is highest in the southern coastal provinces.
Provincial Growth Experiences, 1952-1998
The distribution of per capita GDP growth rates is given in Tables 3 and 4. The
periodisation follows the following policy episodes:
-
1953-58: the normal centrally-planned economy
-
1959-65: the Great Leap Forward, the economic collapse and recovery
-
1966-1978: the Cultural Revolution
-
1979-1984: first reform phase, emphasis on agriculture
-
1985-1991: second reform phase, Oskar Lange-inspired reforms
-
1992-1998: third reform phase, ultimate goal is a market economy with substantial
diversification of ownership structure
Figure 2 shows that there is no evidence of any unconditional β-convergence across
Chinese provinces, during the planned and reform periods. This is confirmed by cross-section
regressions on the whole period and by sub-periods (not reported here) which all indicate that
20
there is no significant relationship between the per capita GDP annual growth rate and its initial
level, except for the last sub-period (1992-98) during which a β-divergence phenomenon
emerged 23 .
Provincial Income Disparity, 1952-1998
The movements of the coefficient of variation of provincial income summarized in Figure
1 show that:
1. China experienced much greater fluctuations in income disparity in the planned period of
1952-1978 than in the reform period after 1978. During the planned period, the coefficient
moved up 0.13 in 1952-60, down 0.16 in 1960-62, and then up 0.29 in 1962-78 compared
with the 0.05 decline in 1978-87, and the 0.09 rise in 1987-98.
2. Periods of extremely low inequality were economically difficult periods when much of the
population were brought to subsistence level. 1952 was right after a warring period that
lasted over twenty-five years, and 1962 was the depth of the famine caused by the Great
Leap Forward. To put it cynically, poverty is always distributed equally because those with
extremely low income will not be around to be counted.
3. The overall increase of 0.26 in inequality during the planned period greatly exceeded the 0.03
increase in inequality during the reform period. Market economics may not have decreased
inequality, but economic planning certainly increased it faster.
Table 5 shows the ranking of provincial income in key years of China's economic history,
and Table 6 summarizes the changes in the relative fortune of each province in the planned
period of 1952-1978, and in the reform period after 1978. They show that:
23
The corresponding cross-section regression is g92-98 = -0.022 [0.059]+ 0.016 [0.007] * Ln(p.c.GDP91 ). The values
shown between brackets are robust standard errors. The number of observations is 29 and the R-squared is 0.1.
21
1. The chief beneficiaries of the planned period were Beijing, Qinghai and Ningxia, and the
biggest losers of the reform period were Qinghai and Ningxia . The rise of Beijing's relative
standing, and its maintenance of the attained income rank, reflects its paramount political
status in the country. The initial large gains of Qinghai and Ningxia (up 10 and 8 places
respectively), and the subsequent large reversals (15 and 10 respectively) showed the
tremendous transfer of resources under the third front industrialization program.
2. There has been basically no change at the very top and the very bottom of the scale. Indeed,
the three municipalities remained the richest throughout the whole period and Yunnan,
Shaanxi, Gansu and Guizhou remained the poorest provinces. Mobility, both upward and
downward, is a middle-class phenomenon.
3. The significant winners of the reform period were generally the coastal provinces, especially
Fujian, Shangdong, and Hainan. The traditional industrial bases of northern China
(Heilongjiang, Jilin, Liaoning) and western provinces experienced a decline in the relative
scale of regional per capita income.
Table 7 looks at inequality by focusing on the two tails of the income distribution, the
movements in the gap between the five richest provinces and the five poorest provinces. The
absolute income gap has increased tremendously over both the planned and reform periods.
When we examine the gap in relative terms first by normalizing the absolute gap with the
average national income, and second by the ratio of the two incomes, the evidence is mixed. The
relative gap decreased from 1.5 in 1978 to 1.4 in 1998, but the income ratios rose from 3.4 to 3.6.
In any case, the widening of relative income in the reform period is small compared with the
widening in the planned period, confirming the conclusions drawn from the movements of the
coefficient of variation.
22
Provincial Differences in Growth: Geography and Policy
We are presenting this section in telegraphic form because we are out of time. Please
accept our apologies. (Wing Woo is responsible for this situation, the other co-authors
completed all their contributions in good time.)
Regional inequality in China has been extensively studied in recent years. 24
The reform pogrom has increased growth rates of the coastal provinces by
(a) allowing them to take advantage of their locations to participate in the international division
labor, i.e. pure geography effects,
(b) giving them preferential tax policies which enable them to have more retained funds to invest
more and hence grow faster, i.e. fiscal subsidies
(c) giving them preferential access to foreign capital which increased total capital formation, and
hence income. i.e. foreign funds
So coastal dummy proxies for two effects: geography and preferential policy
To organize the discussion, Table 8 reproduces some regression results from the literature.
Jian, Sachs and Warner (1996)
Unconditional convergence in 1978-93, but convergence disappears with addition of agricultural
share of GDP and coastal dummy. One interpretation is that the convergence is temporary.
Since coastal provinces were initially discriminated against, and in the middle-income group, the
reform program allowed them to grow faster to catch up with the traditionally rich Manchurian
provinces, so provincial inequality falls.
But if the coast effect is constant, the growth of the coastal provinces need not slow down once
they reach income level of the Manchurian provinces. If so, then inequality will increase.
If the coast effect comes from the preferential policies, then their removal will slow down the
coastal provinces and maintain existing inequality.
If the coast effect represents geographical advantage, removal of preferential policy would slow
increase in provincial inequality but would not reduce it.
Problem: geographical and policy effects not disentangled.
Wang and Hu (1999)
24
To cite but a few, Lyons (1991), Tsui (1993, 1996), Lee (1994), Chan et al. (1996), Chen and Fleisher (1996), Jian
et al. (1996), Zhao (1996), Fleisher and Chen (1997), Gundlach (1997), Mody and Wang (1997), World Bank
(1997), Li et al. (1998), Raiser (1998), Tian (1999), Wang and Hu (1999), Wu (1999) Berthélemy and Démurger
(2000), Chen and Feng (2000), Dayal-Gulati and Husain (2000), Démurger (2000, 2001), Aziz and Duenwald
(2001), Fujita and Hu (2001), Tian (2001), Jian et al. (1996), Wu, (1999), Wei, (2000), Fleisher and Chen (1997),
Mody and Wang (1997), and Démurger (2001).
23
Preferential policies generated the high growth of the coastal provinces. Proof is that foreign
capital has flowed most to the provinces that received preferential policies.
Conducted horse-race between economic model and policy model.
Economic model says foreign funds flow to areas with best growth potential (indicated by
adequacy of infrastructure, availability of educated workforce, and size of market)
Policy model says foreign funds flow to areas with most preferential tax treatment.
Addition of preferential policy index removes statistical significance of variables championed by
economic model.
Since provincial FDI is highly correlated with provincial GDP growth, Wang and Hu regressions
could be interpreted as provincial growth regressions. Coastal growth is thus more the result of
preferential policies than of their more favorable economic conditions.
Wang and Hu talks in detail in Chapter 4 about importance of physical terrain in determining
economic growth. They also note that their "policy variable may also reflect a province's
geographical location." Yet, their policy discussion ignores the geography factor as the main
reason for the success of the coastal provinces.
Debatable assumption is that if coastal region did not have preferential policies, then more of
FDI would have flowed into interior provinces. If FDI was aimed at producing for China's
market, FDI might have moved to central provinces. If FDI was aimed at export-processing
activities, then FDI could have gone to Southeast Asia instead. Given existence of preferential
tax policies in other developing countries, absence of it in China would have reduced exportoriented FDI, and hence growth.
Problem: geographical and policy effects not disentangled.
Bao, Chang, Sachs and Woo (2001)
Assumes that each province is a small economic unit (a price taker), and there is adequate labor
and capital mobility within China. So individual growth not constrained by own amounts of L
and K.
Finds that geographical determinism fits the data well.
Problem: Did not show that policy does not matter, especially if policy stance is collinear with
geographical location.
Demurger (2000)
Specification based on conventional growth model fits the data well.
Significance of FDI represents presence of externalities because total investment is already in
equation, albeit not significant.
If FDI had come in for export-processing activities, was FDI geographically-induced or policyinduced?
24
Zhang (2000)
Export (more generally, international integration) reached critical mass to become important
boost to China's economy only after 1985, which explains why coastal dummy and export
variable are insignificant in 1978-84 and significant in 1985-95.
Same problem: geographical and policy effects not disentangled.
Our approach in this paper
We replace the black box of coastal dummy with two variables:
(a) transportation cost and pure geography effect represented by the proportion of provincial
population in 1994 living within 100 kilometers of the coast or navigable rivers (excluding
coastline above the winter extent of sea ice and the rivers that flow to this coastline)
[Pop100km]
(b) a preferential policy index for each province [Policy]
We also try other geographical variables like:
Distance from the coast [Distf = 1/(1+distance in km)]
Percentage of area within a province with a slope greater than 10% [Slope10]
Average slope of a province [Slavge]
Average elevation [Elavge]
Note that topography indicators can be considered as measuring both agricultural feasibility
(important up to the end of 70s) and market accessibility (from the 80s onward).
Two sets of regressions are run: one including all provinces, but Tibet; the other excluding
municipalities (considered as potential “outliers” due to their particular size, economic structure,
administrative role, etc.).
Constructing the “preferential policy” index
The is based on the number of designated open economic zones in a province, and the extent of
the preferential treatment The construction of this index relies on available information on
designated “open economic zones” across China, gathered from different sources, as well as a
subjective classification according to their importance in terms of special treatments given to
investors and industrial enterprises.
The information in Table 2 is converted into Table 9.
Given the various degrees of preferential policies open economic zones offer, we gave to their
host provinces the following weights:
Weight = 3: SEZ and Shanghai Pudong New Area.
Weight = 2: ETDZ and BECZ.
Weight = 1: COC, COEZ, OCB, MC, BA, and CC.
Weight = 0: No open zone.
Results of this scaling are given Table 10.
25
First set of regressions: cross-section on 1979-98 average per capita GDP growth rate
See Table 11.
Topographical variables not significant and hence omitted final specification.
Pop100km and Policy always statistically significant.
Amount of SOEs negatively related to growth, albeit not statistically significant.
Municipalities don't fit into equation well, which explains why Eq 4 is better than previous three.
Use of Coast (instead of Pop100km and Policy) worsens the results, suggesting that its inclusion
results in misspecification.
Eq 7 is preferred equation.
Being a coastal province yields a higher growth rate of 1.4 percentage points.
Second set of regressions: pooled data for 3 period averages (1979-84, 1985-91, 1992-98)
See Table 12.
Topographical variables not significant and hence omitted final specification.
Pop100km and Policy always statistically significant.
Eq 6 is preferred equation.
Being a coastal province yields a higher growth rate of 1.6 to 1.9 percentage points.
Conclusion
By verifying the presence of a large positive geographical effect that is separate from the
positive effect of the preferential policy extended to the coastal provinces, we would venture the
opinion that the faster growth of the coastal provinces in the post-1978 period did not occur too
much at the expense of the interior provinces. This situation is opposite to that in the 1950s,
where the evidence suggests that the growth of the interior provinces was almost entirely at the
cost of the coastal provinces, engineered by the fiscal transfers of the state. Table 3 shows that
the growth of the coastal region was the lowest of the six regions in the 1953-58 period. Because
the growth of the interior provinces in the reform period has not only been higher than in the
planned period but also in any of the sub-periods of the planned period, it is hard to argue that
the interior provinces have been subject to the same fiscal squeeze that the coastal provinces
experienced in the 1950s.
26
It is true that in the reform period, the coastal region went from being discriminated
against by the central government to being pampered by it. This situation is almost redressed
now, the right of the interior provinces to open economic development zones has been greatly
expanded in the last two years. The central government acted correctly when it reduced its
preferential treatment of the SEZs not by removing the various tax and foreign exchange
exemptions that they could grant to FDI but to allow the inland economic zones to extend these
same exemptions to FDI. The claim that the preferential policies extended to SEZs in the 1980s
and 1990s might have deprived the interior provinces of their natural share of FDI is likely to be
untrue. Given the presence of the tax holidays and land concessions in many Southeast Asian
countries, the absence of SEZs in Guangdong would not have meant that the FDI would have
flowed into inland China instead.
The presence of only conditional convergence and not unconditional convergence in
China stands in marked contrast with the Barro and Sala-Martin's finding of unconditional
convergence in the United States. This difference may be partly the creation of China's
household registration system and its inefficient state banking system, which have impeded the
flow of labor and capital. The restraining of factor movements to equate rates of return
nationally must have made regional disparities bigger than they should be. The reform of these
two components of China's economy is needed not only to attenuate regional inequality but also
to improve economic efficiency.
Even if it is true that geography has given higher levels of steady-state income to the
coastal provinces, it does not follow that it is futile to attempt to reduce regional inequality. The
right conclusion is that the development strategy for the interior provinces will have to be more
creative than simply creating a clone of Shenzhen in, say, the northwestern provinces. For
27
instance, one must be realistic about the possibility of changing the comparative advantage of a
region through large-scale infrastructure projects like roads and railways. Better
communications in the northwestern provinces may end up facilitating the relocation of their
residents to the coast rather than the migration of coastal firms to the northwest.
Since the bulk of the population of the northwest (the center and the southwest as well)
are still engaged in agricultural production, infrastructure investments in the form of regional
centers of biological science research can prove to be more useful. These science centers should
be given the incentives to:
1. develop and propagate new varieties of local crops that have higher yield, are more
disease-resistant, and require less water to grow;
2. improve the local livestock through cross-breeding, and better veterinarian services; and
3. develop new processed food products from the local agricultural base.
A successful infrastructure investment project is one that lowers the cost of production, and
raises the demand for the product, and in this example, it means investing in new knowledge than
in physical facilities. The relevant general point is that there should be greater attention to
increasing human capital formation than to increasing physical capital formation. The first is a
harder task to do well because it requires more creativity, but its achievement is what that makes
for a dynamic market economy in the long run.
28
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32
Figure 1 - σ -convergence across Chinese provinces
0.7
0.65
0.6
Coefficient of
variation
0.55
0.5
0.45
0.4
0.35
0.3
1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996
Notes: Hainan and Tibet excluded due to missing data. Sichuan province includes
Chongqing. GDP per capita is calculated at constant 1995 prices.
Sources: NBS (1999), except for Sichuan, for which sources are SSB (1997), and
SSB (1997-99).
33
Per capita annual GDP growth rate, 1953-78
Figure 2 - Unconditional β -convergence, 1953-78 and 1979-98
4%
3%
2%
1%
0%
-1%
5.5
6
6.5
7
7.5
8
Per capita annual GDP growth rate, 1979-98
Per capita GDP level in 1952 (1995 constant prices)
14%
12%
10%
8%
6%
4%
2%
0%
6
6.5
7
7.5
8
8.5
9
Per capita GDP level in 1978 (1995 constant prices)
Sources: NBS (1999), except for Sichuan, for which sources are SSB (1997), and SSB (1997-99).
34
35
TABLE 1 - G EOGRAPHICAL CHARACTERISTICS BY REGIONS
Region
GDP per
GDP per
capita
capita level in Population
growth rate
1978
density
(%)
Distance
from the
Average Average
Arable
coast
Pop100km Pop100cr Slope>10
slope
elevation Temperature Rainfall land
(% of
(% of
(% of
(Yuan/person) (Person/km2 )
(Km)
(%)
(Meters)
(Degrees)
(Mm)
(%)
population) population)
area)
Municipalities
8.5
3,645
1,104
77
65
71
1.4
1.2
135
10.9
63
36
North-east
7.9
1,700
138
380
17
18
2.2
1.6
314
4.5
50
21
Coast
10.7
1,154
333
86
60
82
2.6
2.4
267
16.4
103
29
Center
8.4
941
264
492
0
57
2.7
2.4
428
14.9
90
24
North-west
7.7
1,045
46
1,383
0
0
5
2.8
1,971
6.8
26
8
South-west
7.8
814
126
656
4
4
14.1
5.2
1,428
16
98
10
9
1,355
290
547
24
41
4.3
2.7
804
12.2
74
21
Total
Notes: GDP per capita compound annual growth rate throughout 1979-98 and GDP per capita level in 1978 are calculated at 1995 constant prices.
Pop100cr = proportion of the population distribution of a province in 1994 within 100 km of the coastline or ocean-navigable river, excluding coastline above the
winter extent of sea ice and the rivers that flow to this coastline. Pop100km = proportion of the population distribution of a province in 1994 within 100 km of
the coastline, excluding coastline above the winter extent of sea ice. Slope>10 measures the percentage of area within a province with a slope greater than 10 %.
Temperature and rainfall are averages throughout the 1951-88 period. Arable land is available for 1994.
Municipalities = Beijing, Tianjin, and Shanghai.
North-east = Liaoning, Jilin, and Heilongjiang.
Coast = Hebei, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong, and Hainan.
Center = Shanxi, Anhui, Jiangxi, Henan, Hubei, and Hunan.
North-west = Inner Mongolia, Shaanxi, Gansu, Qinghai, Ningxia, and Xinjiang (Tibet excluded due to missing data).
South-west = Sichuan, Guizhou, Yunnan, and Guangxi.
Sources: NBS (1999) for economic and population variables; GIS calculations made by Bao Shuming for geographical data, except arable land; Wang and Hu
(1999, table 4.1, p. 83) for arable land.
36
Table 2 - Timeline of China’s Regional Preferential Policies
Year of
approval
1979
1980
1984
1985
Number and type of opened zone
Location
3 Special Economic Zones
1 Special Economic Zone
14 Open Coastal Cities
Guangdong.
Fujian.
Liaoning, Hebei, Tianjin, Shandong,
Jiangsu, Shanghai, Zhejiang, Fujian,
Guangdong and Guangxi.
10 Economic and Technological Development Zones
Liaoning, Hebei, Tianjin, Shandong,
Jiangsu, Zhejiang and Guangdong.
Fujian.
1 Economic and Technological Development Zone
3 Coastal Open Economic Zones
1986
1988
1990
1992
2 Economic and Technological Development Zones
Open Coastal Belt
Pearl river delta, Yangtze river delta
and Fujian.
Shanghai.
Liaoning, Shandong, Guangxi and
Hebei.
1 Special Economic Zone
Hainan.
1 Economic and Technological Development Zone
Pudong New Area
13 bonded areas in major coastal port cities
Shanghai.
Shanghai
Tianjin, Guangdong, Liaoning,
Shandong Jiangsu, Zhejiang, Fujian
and Hainan.
10 major cities along the Yangtze river
Jiangsu, Anhui, Jiangxi, Hunan,
Hubei and Sichuan.
13 Border Economic Cooperation Zones
Jilin, Heilongjiang, Inner Mongolia,
Xinjiang, Yunnan and Guangxi.
All capital cities of inland provinces and autonomous
regions
5 Economic and Technological Development Zones
1993
12 Economic and Technological Development Zones
1994
2 Economic and Technological Development Zones
37
Fujian, Liaoning, Jiangsu, Shandong
and Zhejiang.
Anhui, Guangdong, Heilongjiang,
Hubei, Liaoning, Sichuan, Fujian,
Jilin and Zhejiang.
Beijing and Xinjiang.
Table 5 - Chinese provinces GDP per capita level ranking
Province
Rank in GDP per capita level (constant price 1995)
1952
Shanghai
Beijing
Tianjin
Zhejiang
Guangdong
Jiangsu
Fujian
Liaoning
Shandong
Heilongjiang
Hebei
Hainan
Xinjiang
Jilin
Hubei
Inner Mongolia
Shanxi
Hunan
Anhui
Henan
Qinghai
Ningxia
Guangxi
Jiangxi
Sichuan
Yunnan
Shaanxi
Gansu
Guizhou
1958 1965 1978
1
9
4
7
8
12
11
5
22
2
6
1
5
3
11
9
22
13
4
24
2
16
1
4
2
9
8
16
12
7
24
3
19
10
3
18
15
17
13
19
23
16
20
25
14
21
26
27
28
24
6
10
12
7
8
15
18
26
14
19
23
17
20
27
25
28
21
5
10
15
13
11
18
17
27
6
14
23
20
21
22
26
28
25
1
2
3
7
9
8
16
5
17
4
11
21
14
10
18
19
13
15
23
26
6
12
20
25
22
24
27
28
29
1952-78 shift
0
7
1
0
-1
4
-5
0
5
-2
-5
-4
-7
0
-4
4
-2
-3
-2
10
8
5
-10
0
3
1
1
-4
1984 1991 1998
1
2
3
6
8
7
10
4
11
5
16
19
13
12
15
18
14
20
21
24
9
17
23
27
22
25
26
29
28
1
2
3
6
5
8
10
4
11
7
15
13
9
12
18
16
19
20
27
24
14
17
25
26
21
22
23
28
29
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
1978-98 shift
0
0
0
3
4
2
9
-3
8
-6
0
9
1
-4
3
3
-4
-3
4
6
-15
-10
-3
1
-3
-2
0
0
0
Note: The 1952-78 shifts are calculated without taking Hainan into consideration. Tibet is not included due to
missing data for GDP components.
Sources: NBS (1999), except for Sichuan, for which sources are SSB (1997), and SSB (1997-99).
38
Table 6 - Winners and losers in terms of GDP per capita ranking
1952-78
1978-98
Winners
Qinghai (+ 10)
Ningxia (+ 8)
Beijing (+ 7)
Shandong (+ 5)
Guangxi (+ 5)
Jiangsu (+ 4)
Shanxi (+ 4)
Yunnan (+ 3)
Fujian (+ 9)
Hainan (+ 9)
Shandong (+ 8)
Henan (+ 6)
Guangdong (+ 4)
Anhui (+ 4)
Zhejiang (+ 3)
Hubei (+ 3)
Inner Mongolia (+ 3)
In-between
Tianjin (+ 1)
Shaanxi (+ 1)
Gansu (+ 1)
Shanghai (0)
Zhejiang (0)
Liaoning (0)
Hubei (0)
Sichuan (0)
Guangdong (-1)
Heilongjiang (-2)
Hunan (-2)
Henan (-2)
Jiangsu (+ 2)
Xinjiang (+ 1)
Jiangxi (+ 1)
Beijing (0)
Tianjin (0)
Shaanxi (0)
Gansu (0)
Shanghai (0)
Guizhou (0)
Hebei (0)
Yunnan (-2)
Losers
Anhui (-3)
Xinjiang (-4)
Inner Mongolia (-4)
Guizhou (-4)
Fujian (-5)
Hebei (-5)
Jilin (-7)
Jiangxi (-10)
Guangxi (-3)
Liaoning (-3)
Sichuan (-3)
Hunan (-3)
Shanxi (-4)
Jilin (-4)
Heilongjiang (-6)
Ningxia (-10)
Qinghai (-15)
Source: computed from Table 4.1.
39
Table 7 - Gaps between the top-5 and bottom-5 provinces in per capita GDP
GDP per capita level
1952
1958
1965
1978
1985
1992
1998
Top 5
1,028
1,650
1,445
2,500
3,797
5,607
12,759
Bottom 5
403
583
543
746
1,157
1,770
3,557
National mean
616
838
780
1,143
1,849
2,929
6,400
Absolute gap
625
1,067
901
1,754
2,641
3,837
9,202
Relative gap
1.01
1.27
1.16
1.54
1.43
1.31
1.44
Top5/Bottom5
2.55
2.83
2.66
3.35
3.28
3.17
3.59
Note: GDP per capita is measured at 1995 constant prices, using the “compound” method. The average GDP per
capita level is computed as the weighted sum of per capita provincial GDP levels, the weights being the provincial
share in total population of the group (top-5, bottom-5 or all provinces). Top-5 are the 5 richest provinces in a
particular year and bottom-5 are the 5 poorest provinces in a particular year. The relative gap is the difference
between top-5 and bottom-5 divided by the national mean.
Sources: NBS (1999), except for Sichuan, for which sources are SSB (1997), and SSB (1997-99).
40
Table 3 - Growth episodes by region
1953-98
1953-78
1979-98
1953-58
1959-65
1966-78
1979-84
1985-91
1992-98
Medium
growth
No
growth
Low
growth
Medium-high
growth
Medium
growth
High
growth
Municipalities
5.6
3.3
5.4
-4.6
6.5
7.9
6.8
5.5
11.4
North-east
4.2
1.7
5.5
-6.8
3.6
7.3
6.4
6.2
8.7
Coast
5.5
1.8
2.8
-1.0
2.9
10.3
8.8
7.7
13.1
Center
4.2
1.5
5.2
-3.0
2.0
7.8
7.7
4.9
11.2
North-west
4.3
1.6
7.1
-2.8
2.5
7.7
7.1
6.9
7.9
South-west
4.2
1.0
5.8
-0.9
1.7
7.4
6.7
5.4
9.1
National mean
4.8
1.7
4.9
-2.6
2.7
8.6
7.6
6.3
11.2
Gap (in % point)
1.5
2.3
4.3
5.9
4.8
3.0
2.4
2.8
5.1
Note: Annual growth rates are calculated by regressing the logarithm of per capita GDP on a time trend. GDP per capita is measured at 1995 constant prices.
Tibet is not included due to missing data for GDP components.
Sources: NBS (1999), except for Sichuan, for which sources are SSB (1997), and SSB (1997-99).
41
Table 4 - Annual per capita GDP growth rates
1953-98
1953-78
1979-98
1953-58
1959-65
1966-78
1979-84
1985-91
1992-98
Municipalities
Shanghai
Beijing
Tianjin
5.7
5.8
5.5
3.4
3.0
3.8
5.1
7.3
7.5
-4.3
-5.9
-5.0
6.4
8.1
5.8
8.2
8.0
7.5
6.6
7.8
6.3
5.5
6.5
4.4
12.7
9.3
11.9
North-east
Jilin
Liaoning
Heilongjiang
4.0
4.9
3.5
0.8
2.6
1.0
0.8
7.4
5.3
-3.0
-7.6
-7.9
1.8
5.5
2.4
8.3
7.8
6.3
8.5
6.2
5.7
6.5
6.6
5.5
10.0
8.9
7.9
5.4
5.1
5.5
5.9
1.5
0.9
1.5
2.3
4.5
5.2
3.3
0.5
0.8
-2.2
-0.1
1.6
1.7
1.6
2.3
3.6
5.9
4.5
2.5
1.2
3.3
1.4
-2.0
-5.5
4.0
2.9
11.5
10.8
10.5
10.3
10.0
10.0
8.4
8.9
9.8
9.7
8.6
9.0
10.0
6.1
11.0
7.9
6.6
7.6
7.7
6.5
6.0
12.2
14.6
13.8
13.5
9.0
13.0
12.1
Center
Henan
Hubei
Anhui
Jiangxi
Hunan
Shanxi
4.9
4.4
4.0
3.5
4.0
3.9
1.8
1.4
1.6
0.8
1.5
1.4
3.1
8.1
4.3
3.8
5.7
6.2
-4.9
-2.1
-1.0
-3.0
-3.8
-4.0
2.8
2.0
1.6
0.4
2.3
2.1
8.4
8.1
8.0
8.0
7.0
6.9
9.2
7.7
8.6
6.6
5.8
7.8
5.7
5.0
3.4
6.0
5.0
3.8
11.5
11.6
13.3
11.3
9.8
9.1
North / West
Xinjiang
Inner Mongolia
Shaanxi
Gansu
Ningxia
Qinghai
4.1
3.9
4.6
4.5
4.3
3.6
0.2
0.7
1.9
2.2
2.8
2.6
7.4
7.7
6.8
5.6
5.2
7.1
-1.8
-5.3
-3.9
-2.4
0.5
3.0
-0.6
1.9
3.0
5.3
3.1
2.2
8.7
7.8
7.8
7.4
6.5
5.3
8.5
8.5
7.4
3.8
6.2
5.9
8.0
6.0
7.4
7.4
5.6
3.5
7.5
8.7
7.7
8.4
6.8
6.4
South-west
Yunnan
Sichuan
Guangxi
Guizhou
4.4
4.3
4.5
3.1
1.7
0.6
2.6
-0.4
5.9
5.3
7.1
6.5
0.7
-0.4
-1.4
-3.5
2.0
1.0
4.2
0.1
8.0
7.5
7.2
6.5
7.7
6.3
6.2
8.6
7.3
5.4
4.5
4.6
8.8
9.2
10.3
6.5
Coast
Guangdong
Fujian
Zhejiang
Jiangsu
Hainan
Shandong
Hebei
Note: GDP per capita is measured at 1995 constant prices. Annual growth rates are calculated by regressing the
logarithm of per capita GDP on a time trend. Tibet is not included due to missing data for GDP components.
Sources: NBS (1999), except for Sichuan, for which sources are SSB (1997), and SSB (1997-99).
43
Table 8: Selected Growth-Related Regressions from Literature
(constant term omitted)
Jian, Sachs and Warner (1996): Explaining Regional Growth, cross section
(dependent variable is average annual provincial GDP growth rate, 1978-93)
initial GDP
Eq 1
-0.017
[3.32]
Eq 2
-0.009
[1.11]
initial share
of agriculture
coast
dummy
0.08
[1.88]
0.021
[3.93]
Wang and Hu (1999): Explaining Foreign Investment Flows into Provinces, cross section
(dependent variable is accumulated foreign capital over 1983-95)
Economic
Model
Eq 3
Political
Economy
Model
Eq 4
GDP 1991
Growth
in 1978-91
Infrastructure
in 1990
Illiteracy
in 1990
0.383
[2.26]
0.348
[2.26]
0.292
[1.71]
0.037
[0.23]
0.239
[2.09]
0.023
[0.20]
-0.208
[1.48]
0.025
[0.24]
Preferential
Policy
0.858
[5.83]
Bao, Chang, Sachs and Woo (2001): Explaining Provincial Growth, cross section
(dependent variable is average annual provincial GDP growth rate, 1978-97)
GDP 1978
Inverse
Distance
Coastline
Length
Eq 5
-0.178
[2.88]
375.02
[1.76]
245.57
[3.91]
Eq 6
-0.178
[2.88]
361.5
[1.69]
209.87
[2.82]
-0.023
[.90]
Eq 7
-0.063
[1.53]
113.19
[1.88]
-0.020
[1.06]
0.098
[4.89]
44
Pop100km
Elevation
45
Demurger (2000): Explaining Provincial Growth, pooled estimation
(dependent variable is annual provincial GDP growth rate, 1985-96)
Labor
Growth
Investment
Rate
Foreign
Investment
Export
Growth
Human
Capital
Eq 8
0.343
[1.85]
-0.0004
[0.02]
0.067
[3.34]
0.005
[0.17]
0.443
[2.67]
Eq 9
0.274
[2.23]
0.006
[0.46]
0.022
[2.65]
0.004
[0.35]
0.221
[2.08]
Foreign K Austerity
& Human K Dummy
interaction (1989-90)
0.080
-0.041
[2.93]
[4.83]
0.026
[2.04]
Zhang (forthcoming): Explaining Provincial Growth, cross section
(dependent variable is average annual provincial GDP growth rate of sub-periods, 1978-84 and 1985-95)
initial GDP
non-state
sector size
export/GDP
1978-84
Eq 10
-0.03
[5.36]
0.025
[1.16]
1985-95
Eq 11
-0.027
[7.42]
0.009
[2.15]
1985-95
Eq 12
-0.028
[7.70]
0.092
[1.25]
foreign invest
/total invest
coastal
dummy
western
dummy
0.612
[0.65]
0.012
[1.48]
-0.013
[1.81]
0.809
[4.47]
0.031
[6.96]
-0.009
[1.44]
0.025
[4.07]
-0.008
[1.34]
0.094
[4.09]
46
-0.004
[0.50]
Initial
GDP
Spread
Effect
-0.090
[3.13]
-0.043
[2.91]
0.751
[6.98]
Table 9 - Preferential policies (number of newly open zones)
1979 1980
1984
SEZ SEZ COC ETDZ
Beijing
Tianjin
Hebei
Shanxi
Inner Mongolia
Liaoning
Jilin
Heilongjiang
Shanghai
Jiangsu
Zhejiang
Anhui
Fujian
Jiangxi
Shandong
Henan
Hubei
Hunan
Guangdong
Guangxi
Hainan
Sichuan
Guizhou
Yunnan
Tibet
Shaanxi
Gansu
Qinghai
Ningxia
Xinjiang
1985
COEZ ETDZ
1986
ETDZ
1988
OCB ETDZ
1
1
1990
Pudong
1992
BA MC BECZ CC ETDZ
1
1
1
1
1
2
1
2
2
1
2
1
1
4
1
2
1
2
2
3
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
2
1
1
3
3
47
3
1
1
1
5
1
1
1
1
1
1
1
1
1
1
1
1
2
1
1994
ETDZ
1
1
2
1
1993
ETDZ
1
1
1
1
1
1
1
1
1
1
1
Table 10 - Preferential policy index
1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Average
Beijing
Tianjin
Hebei
Shanxi
Inner Mongolia
Liaoning
Jilin
Heilongjiang
Shanghai
Jiangsu
Zhejiang
Anhui
Fujian
Jiangxi
Shandong
Henan
Hubei
Hunan
Guangdong
Guangxi
Hainan
Sichuan
Guizhou
Yunnan
Tibet
Shaanxi
Gansu
Qinghai
Ningxia
Xinjiang
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3
0
0
0
0
0
3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3
0
0
0
0
0
3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3
0
0
0
0
0
3
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
3
0
0
0
0
0
3
0
0
0
0
0
0
0
0
0
0
0
0
2
1
0
0
1
0
0
1
2
2
0
3
0
2
0
0
0
3
1
0
0
0
0
0
0
0
0
0
0
0
2
1
0
0
1
0
0
1
2
2
0
3
0
2
0
0
0
3
1
0
0
0
0
0
0
0
0
0
0
0
2
1
0
0
1
0
0
2
2
2
0
3
0
2
0
0
0
3
1
0
0
0
0
0
0
0
0
0
0
0
2
1
0
0
1
0
0
2
2
2
0
3
0
2
0
0
0
3
1
0
0
0
0
0
0
0
0
0
0
48
0
2
2
0
0
2
0
0
2
2
2
0
3
0
2
0
0
0
3
2
3
0
0
0
0
0
0
0
0
0
0
2
2
0
0
2
0
0
2
2
2
0
3
0
2
0
0
0
3
2
3
0
0
0
0
0
0
0
0
0
0
2
2
0
0
2
0
0
3
2
2
0
3
0
2
0
0
0
3
2
3
0
0
0
0
0
0
0
0
0
0
2
2
0
0
2
0
0
3
2
2
0
3
0
2
0
0
0
3
2
3
0
0
0
0
0
0
0
0
0
2
2
2
1
2
2
2
2
3
2
2
1
3
1
2
1
1
1
3
2
3
1
1
2
1
1
1
1
1
2
2
2
2
1
2
2
2
2
3
2
2
2
3
1
2
1
2
1
3
2
3
2
1
2
1
1
1
1
1
2
2
2
2
1
2
2
2
2
3
2
2
2
3
1
2
1
2
1
3
2
3
2
1
2
1
1
1
1
1
2
2
2
2
1
2
2
2
2
3
2
2
2
3
1
2
1
2
1
3
2
3
2
1
2
1
1
1
1
1
2
2
2
2
1
2
2
2
2
3
2
2
2
3
1
2
1
2
1
3
2
3
2
1
2
1
1
1
1
1
2
2
2
2
1
2
2
2
2
3
2
2
2
3
1
2
1
2
1
3
2
3
2
1
2
1
1
1
1
1
2
2
2
2
1
2
2
2
2
3
2
2
2
3
1
2
1
2
1
3
2
3
2
1
2
1
1
1
1
1
2
0.67
1.43
1.24
0.33
0.67
1.24
0.67
0.67
1.76
1.43
1.43
0.62
2.71
0.33
1.43
0.33
0.62
0.33
2.86
1.24
1.57
0.62
0.33
0.67
0.33
0.33
0.33
0.33
0.33
0.67
Table 11: Cross-Section Growth Regressions
Dependent Variable: Average Growth Rate of Per Capita GDP of Province in 1978-98 period
Variables:
constant
GDP78
Coast
Pop100km
Sample: 3 Municipalities plus 26 Provinces (excluded Tibet and Hainan)
Eq 1
0.0657
0.0076
[25.13]
[1.62]
Policy
Agr78
SqArg78
Soe78
-0.0743
[-0.84]
0.0907
[0.97]
-0.0313
[1.14]
0.0136
[7.52]
Eq 2
0.1445
[1.41]
-0.0043
[0.45]
Eq 3
0.1610
[1.86]
-0.0110
[1.31]
0.0093
[1.71]
0.0140
[6.24]
0.0267
[0.31]
-0.0422
[0.45]
-0.0270
[0.94]
Eq 4
0.1345
[1.43]
-0.0131
[1.52]
0.0107
[2.24]
0.0127
[[5.32]
0.2396
[2.35]
-0.2793
[2.64]
-0.0310
[1.02]
Sample: 26 Provinces (excluded 3 Municipalities, Tibet and Hainan)
Eq 5
0.0646
0.0122
[24.25]
[3.02]
0.0141
[8.14]
0.0770
[0.57]
-0.0819
[0.57]
-0.0420
[1.36]
0.1869
[2.06]
-0.2353
[2.42]
-0.0312
[1.07]
Eq 6
0.1523
[1.34]
-0.0087
[0.80]
Eq 7
0.1785
[2.12]
-0.0176
[2.34]
GDP78
=
Coast
=
Pop100km =
Policy
=
Agr78
=
SqAgr78 =
Soe78
=
Municipal =
Chongqing is
0.0257
[5.48]
0.0242
[4.99]
0.0143
[3.20]
Municipal
0.0130
[5.77]
Level of GDP per capita in 1978
Dummy Variable equals 1 for Coastal Province
Proportion of population with 100 kilometers of coast or navigable river
Preferential Index Value
Agriculture share of GDP in 1978
Agr78 squared
Share of workforce employed by state-owned enterprises 49
in 1978
Dummy Variable equals 1 if Beijing, Shannghai, Tianjin
included in Sichuan.
0.0321
[2.45]
Table 12: Pooled Growth Regressions
1979-1998 growth rates divided into 3 sub-period averages (a) 1979-84 (b) 1985-91 (c) 1992-98
Dependent variable is average growth rate of GDP per capita in the sub-period
Figures in brackets are absolute t-statistics
Variables
constant
initial GDP
Agr
Soe Total Invest
Eq 1
-0.0548
[1.37]
0.0181
[3.32]
Eq 2
0.0662
[0.84]
0.0059
[0.63]
0.0283
[0.86]
-0.0667
[1.45]
-0.0086
[0.19]
0.5445
[3.62]
Eq 3
0.0318
[0.39]
0.0062
[0.69]
0.0083
[0.22]
-0.0046
[0.07]
-0.0308
[0.64]
0.5070
[3.51]
Eq 4
0.1429
[1.68]
-0.0111
[1.09]
-0.0235
[0.67]
0.0203
[0.35]
0.0041
[0.10]
Eq 5
0.1380
[1.51]
-0.0202
[1.81]
0.0271
[0.70]
0.0087
[0.14]
0.0358
[0.86]
Eq 6
0.1511
[2.38]
-0.0196
[2.30]
0.0309
[0.75]
Fdi
Coast
Pop100km
Policy
Transport
Education
0.4482
[3.36]
0.0158
[2.08]
0.0093
[2.72]
0.5019
[3.58]
0.0187
[1.80]
0.0095
[2.90]
0.0072
[0.18]
0.1376
[3.06]
0.5161
[3.76]
0.0187
[1.84]
0.0099
[3.15]
0.0019
[0.05]
0.1127
[2.58]
0.1356
[1.53]
Sample excludes Beijing, Tianjin, Shanghai, Hainan and Tibet. Chongqing is also within Sichuan.
initial GDP = Initial level of GDP per capita
Agr
=
Agriculture share of GDP initially
Soe
=
Share of workforce employed by state-owned enterprises initially
Total Invest = Total Investment / GDP
Fdi
=
Foreign Direct Investment / GDP
Coast
= Dummy Variable equals 1 for Coastal Province
Pop100km = Proportion of population with 100 kilometers of coast or navigable river
Policy
=
Preferential Index Value
Transport = Density of transportation, (rail+road+inland navigable rivers)/area
Education = Proportion of population with at least a secondary school50
education