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annual; in fact, China has experienced the worlds highest consistent rate
of economic growth for more than a decade. However, due to this rapid
growth from 1990s, several economists argues that the gap between rich
and poor areas has widened.
First, there is extensive unemployment, underemployment, and inefficient
allocation of resources in the Chinese economy, particularly with respects
to human and capital resources.
During the Great Leap Forward in 1952 to 1978, the gap between the rich
and the poor provinces widened considerably. This happened because the
government at the time invested heavily in heavy industry, and so the
wealth of the industrial provinces of North-East China increased very
sharply. The government centrally planed it to Beijing, Shangnghai, and
Nigxia. Beijing, especially, rised, continuing to cumulate its wealth.
However, the provinces improved must were the coastal provinces, but
industrial bases of north-western China (Manchuria) and western provinces
experienced declines in their per capita income rankings. The relative gap
increased from 1.01 in 1998 to 1.54 in 2008. We can therefore conclude
that the widening of relative income during the market reform period has
been small compared
First, the coastal provinces introduced economic policies as early as 1980s
to start investment and trade. These policies led to rapid integration into
world markets, huge inflows of foreign direct investment and the
development of a modern industrial basis in these provinces. In this way,
the coastal provinces got a head start on economic development
compared with inland provinces, and the inland provinces have never
caught up with that lead.
Better natural conditions in the coastal provinces more arable land,
better conditions to develop infrastructure and better access to the sea
than the inland provicnes enjoy. Coastal locations also better for export
processing industries, which have been developing very rapidly during the
last 20 years, especially as the EPZ opened from 2000s, attracting more
foregin investors, and is in Shenzen.
Since 1982 Chinas SEZs have all been developing at an incredible speed.
Shenzhen itself has been especially successful. In 1992 Shenzhen attracted 14%
($4.3billion) of Chinas total foreign investment. The city is now one of Chinas
main import-export hubs as well as a leading manufacturing base.
40%