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Trade-cum-FDI, Human Capital Inequality and Regional Disparities in China: the Singer Perspective

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Abstract

This paper explores the causes of regional disparities in China in the light of the Singer Hypotheses. The impact of inter-regional economic relationships and trade-cum-FDI on regional income inequality and the transmission mechanisms are investigated. The interactions between economic structure, trade-cum-FDI, human capital inequality and regional income gap, and the role of the fiscal and financial systems are analysed in the regional development context. It finds that the centre-periphery type of economic relationship between the coastal and the inland regions and the trade-cum-FDI in the coastal regions have all contributed to the regional income inequalities in China. Increasing human capital inequality is one of the major transmission mechanisms. Policy implications are discussed, emphasizing the role of the state, human capital and openness.

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Notes

  1. They are the Bank of China, China Commercial and Industrial Bank, China Construction Bank and China Agricultural Bank.

  2. They are China Import and Export Bank, China Agricultural Development Bank and China National Development Bank.

  3. For example, Shenzhen Development Bank Co. Ltd, Guangdong Development Bank, Shanghai Pudong Development Bank, China Merchants Bank, China Everbright Bank and China Mingshen Banking Corp. Ltd, Fujian Industrial Bank. Business for most of these new banks are first restricted to the local regions. In the mid-1990s their business gradually expanded to other provinces, mainly other coastal provinces.

  4. Data source: www.moftec.gov.cn.

  5. Data source: The Third National Industrial Census of P.R. China, 1995.

  6. Data source: The Third National Industrial Census of P.R. China, 1995.

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Authors and Affiliations

  1. Department of International Development, Queen Elizabeth House, University of Oxford, Oxford, UK

    Xiaolan Fu

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  1. Xiaolan Fu
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Correspondence to Xiaolan Fu.

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Fu, X. Trade-cum-FDI, Human Capital Inequality and Regional Disparities in China: the Singer Perspective. Econ Change 40, 137–155 (2007). https://doi.org/10.1007/s10644-007-9011-7

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