The Political Economy of Uneven Development: The Case of China (review)

In the past twenty years or so, China's economy has grown at a rate of about 8 to 10 percent annually, very likely surpassing the rate of growth in any other country in the same period. This impressive performance, however, has been accomplished only at the expense of widening regional disparity in terms of both GDP growth rate and the real standard of living—a consequence of following a political economy in accordance with Deng Xiaoping's "gradient theory" initiated in the early 1980s. Deng's economic reform policy called for the rapid development of the coastal regions, where industrial activity had already been lopsidedly concentrated in the early decades of the twentieth century. Economic efficiency has thus been raised, but the effort made under Mao Zedong to achieve greater equality in per capita consumption in the 1950s and 1960s has been completely abandoned. The period 1980-1995 did witness a rapid rise in regional equality in economic development, and the degree of income inequality was still lower in China than in most countries in Latin America and Sub-Saharan Africa. But the inequality of income distribution in China nonetheless exceeds that of China's large Asian neighbors India, Pakistan, and Indonesia. The World Bank reports that the increase in China's overall inequality is by far the largest among all countries for which comparable data are available. Such a steep rise in inequality in such a short time is highly unusual from both a historical and a comparative perspective. In view of the highly unusual nature of this phenomenon, this volume, jointly authored by two distinguished scholars, one a political science professor in a well-known university in the United States and the other an accomplished economist in China, is most timely.

This informative book contains seven chapters, four appendixes, a lengthy bibliography, and an index. The introductory chapter explains the significance of the issue of uneven development from an international perspective, as well as providing an outline of the book's contents. The second chapter, on the theoretical framework of the study, evaluates the neoclassical convergence hypothesis and the "spread" and "backlash" effects of the inverted U-curve hypothesis, and advances the authors' own political-economic interaction hypothesis to analyze regional disparity in the case of China.

Chapter 3 traces the disparity in development during the period 1978-1994, compares the inequality between the rich province of Guangdong and the poor province of Guizhou, and, most significantly, compares China with other countries throughout the world in terms of the ratio between maximum and minimum incomes as well as the coefficient of variation. The high readings for China are astonishing.

Chapter 4 discusses the multidimensional factors of regional disparity in China. Under the subheading of resources endowment, the authors list the geographical conditions, ethnic makeup, capital accumulation, size of labor force, and transportation and communications infrastructure. Under economic structure, they discuss production, employment, ownership, and the degree of openness in terms of exports and foreign direct investment. Under human well-being, they compare and analyze urbanization; disposable income; per capita consumption; access to information via television, newspapers, and telephone; rural poverty; education; health; and the ratio of scientists and engineers based on provincial data. Various tables vividly disclose how the "first world and third world coexist within China."

The economic and political causes of disparity are discussed in chapters 5 and 6. Chapter 5 elaborates on how the shortage of savings in local economies and the lack of capital flows from other provinces and foreign countries are the cause of economic stagnation in the inner provinces. Chapter 6 traces the growth-first philosophy adopted in the early 1980s as representative of the pro-coastal strategy of the central government. The decentralization unleashed by the economic reform since then has eroded...