This paper presents a comprehensive picture of inequality in China on the basis of provincial data. It decomposes overall inequalities into intra and inter components. Rural-urban inequality dominated overall inequality in the past and will continue to do so in the future. Meanwhile, in recent years inter-regional inequality has grown rapidly and become an important component of inequality. We find that the pattern of inequality is quite different in the pre-reform and reform periods. Our results show that overall inequality in China is large by international standards and that it has grown worse during the past half century.

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

This paper studies the spatial differences of grain production efficiencies in China using a panel data set on 30 provinces (cities) for the period 1987-92. A stochastic frontier production function is estimated to derive the technical efficiencies across the regions. The results suggest that technical inefficiencies are significant with remarkable provincial and zonal differentials. The marginal productivities of factors and their convergence (divergence) over time, the decomposition of total factor productivity, and the effects of major determinants on technical inefficiencies are also studied in detail.

A production model is proposed to explain why economic growth may lead to regional inequality and club divergence. Economic growth starts from a few centres and spills over to other regions. The spillovere ect diminishes as distance rises, causing club formation with a clear geographical pattern.