Working Papers,
Lund University, Department of Economics

Abstract: China’s unbalanced growth strategy has seemingly fostered growing inter-regional growth disparities and there is little evidence of wealth trickling down from richer provinces to poorer provinces. Given pronounced and frequent inter-regional short-term fluctuations in economic growth, standard convergence tests, however, may be ill specified to detect underlying long-term growth trends in small samples. Our paper suggests a novel approach to distinguish between long-term growth trends and short-term fluctuations. Based on provincial data from 1978 to 2009, our results indicate that China’s provinces only diverge over the short-term. Over the long term, provinces cluster into two converging growth clubs.

Keywords: regional convergence; developing countries; growth; China

JEL-codes: O14; O33; O41; R11

37 pages, First version: July 4, 2011. Revised: March 1, 2012.

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Published as

Fredrik N. G. Andersson, David Edgerton and Sonja Opper, (2013), 'A Matter of Time: Revisiting Growth Convergence in China', World Development, vol 45, pages 239-251

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