Centripetal Forces in China's Economic Take-Off

38 Pages Posted: 31 Jan 2006

See all articles by Anuradha Dayal-Gulati

Anuradha Dayal-Gulati

International Monetary Fund (IMF)

Aasim Husain

International Monetary Fund (IMF) - Research Department

Date Written: May 2000

Abstract

This paper uses provincial time series data from China to empirically investigate two propositions relating to economic development: (i) that economic takeoff is associated with technological transfer through foreign direct investment (FDI); and (ii) that takeoff is accompanied, at least in the short term, by widening income inequality. The results indicate that FDI flows have increased the rate of convergence in per capita incomes across China's provinces. However, the pattern of FDI, which has gone mainly to the relatively wealthy provinces, has caused different provinces to converge to different steady states.

Keywords: Convergence, integration, growth, inequality

JEL Classification: O4, O11, O18

Suggested Citation

Dayal-Gulati, Anuradha and Husain, Aasim, Centripetal Forces in China's Economic Take-Off (May 2000). IMF Working Paper No. 00/86, Available at SSRN: https://ssrn.com/abstract=879619

Anuradha Dayal-Gulati

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Aasim Husain (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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