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Interregional Inequality in China: Spread/Backwash and Williamson's Law Examined

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Joel Ribbens

on 11 May 2011

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Transcript of Interregional Inequality in China: Spread/Backwash and Williamson's Law Examined

Interregional Inequality in China:
Spread/Backwash and Williamson's Law Joel Ribbens Willamette University Spring 2011 Advisor: Jerry Gray Backwash and Spread Processes
1. Government income and expenditure
2. Private capital flows
3. Trade
4. Migration-commuting-employment expansion
5. Diffusion of innovation
Source: Gaile (1980)
Myrdal Hirschman Jeffery Williamson Stanley Kuznets Government income and expenditure Private capital flows Trade Migration-commuting-employment Diffusion of innovation Central Government spending effects of provincial growth (Zhao & Du 2009)
central: 1.64%
western: 1.35% Provincial spending: infrastructure and energy (Wen 2007)
2001 FDI distributions
East: 86%
Central: 9%
West: 4% Zhao and Du 2009
FDI Growth
1995-2006
West: 7.77%
East: 10.88% Jones, Li & Owens (2003)
the presence of Special Economic Zones’s
increase the output of cities
in China by 5.5% whereas location on
the coast provides a 2.2% boost. Lu and Thomson (2004)
Effects of increased market access greater than
greater supply access in Western region. Perkins (2004) estimates that China has five times the necessary agricultural workers for its level of agricultural output. Kanbur and Zhang (1999) report a floating population of 53.5 million people with approximately 46 million in the labor force. Within that group 19.7% of rural workers migrated to urban areas and 14.5% of inland workers migrated to the coast. Ke and Lai (2011)
Six eastern municipalities and provinces contained 80% of total MNE R&D investments. This investment boosted coastal economies but had little spillover effects into the interior. Wang and Hu (1999) Hao and Wei (2010) Source: Kanbur and Zhang (1999), China Statistical Yearbook Spread/Backwash Backwash and Spread Processes
1.Government income and expenditure
2.Private capital flows
3.Trade
4.Migration-commuting-employment expansion
5.Diffusion of innovation
Source: Gaile (1980) Backwash and Spread Processes
1.Government income and expenditure
2.Private capital flows
3.Trade
4.Migration-commuting-employment expansion
5.Diffusion of innovation
Source: Gaile (1980) Government income and expenditure Private capital flows Trade Migration-commuting-employment Diffusion of innovation Source: Fu (2004) Source: Zhang and Felmingham (2002) Source: Kanbur and Zhang (1999), China Statistical Yearbook Zhao and Du (2009) A 1% increase in central government investment boosted the central region’s GDP 1.64% and the western region’s 1.35%. Source: Golley (2007), World Bank (2005) Jones, Li & Owens (2003)
found that the presence of SEZ’s increase the
output of cities in China by 5.5% whereas
location on the coast provides a 2.2% boost. In 2001 86% of FDI was placed in the east,
with 9% in the central region and 4% in the
west (Wen 2007). Zhao and Du (2002) From 1995 to 2006 eastern
FDI grew 7.77% compared to 10.88% in the west Lu and Thomson (2004) found that
increased markets for the west outweighed
the increase in imports in the region Perkins (2004) estimates that China has five times the necessary agricultural workers for its level of agricultural output. Kanbur and Zhang (1999) report a floating population of 53.5 million people with approximately 46 million in the labor force. Within that group 19.7% of rural workers migrated to urban areas and 14.5% of inland workers migrated to the coast. Ke and Lai (2011) found that in six eastern municipalities and provinces contained 80% of total MNE R&D investments. Stanley Kuznets Jeffrey Williamson Interregional Inequality in China:
Spread/Backwash and Williamson's Law Examined Hao and Wei (2010) found that increased
marketization, globalization, and centralization
all led to increased interregional inequality Gunnar Myrdal Albert Hirschman Williamson's Law Cumulative Causation
North/South
Growth Poles
Spread
Backwash Convergence or Divergence Zhao and Tong (2000) Provincial
range changed from 747 to 3,438 yuan.
Average provincial per capita GDP increased
255%. Conclusions

Government spending has acted as a spread effect however other factors suggest a continuation of backwash effects.

Williamson's Law's inverted-U has not yet "peaked".

More should be done to consider the role of government in this field of economics. Source: http://www.gpaulbishop.com/GPB%20History/GPB%20Archive/Section%20-%202/G.%20Myrdal/myrdal_g_01.JPG Source: http://diglib.princeton.edu/ead/bioghist-images/MC160.jpg Source: http://www.whartonmagazine.com/issues/511.php Source: http://www.mbc.com.ph/events/2011-mar-1-joint-forum-jeffrey-williamson/ Questions?
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