Premium
Opening up, Market Reform, and Convergence Clubs in China *
Author(s) -
Hao Rui
Publication year - 2008
Publication title -
asian economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.345
H-Index - 28
eISSN - 1467-8381
pISSN - 1351-3958
DOI - 10.1111/j.1467-8381.2008.00271.x-i1
Subject(s) - convergence (economics) , openness to experience , economics , china , conditional convergence , government (linguistics) , human capital , capital (architecture) , economic system , economic geography , market economy , macroeconomics , political science , geography , psychology , social psychology , linguistics , philosophy , archaeology , law
This paper evaluates the relationship between initial government policies and the emergence of convergence clubs in post‐reform China. We test the structural stability of a global convergence equation using China's provincial data over the period 1985–2000. We find that the provinces cluster around two basins of attraction defined by initial opening‐up. Domestic market reform exerts a positive and significant influence on provincial economic growth but has no threshold effect. The two convergence clubs exhibit strikingly different growth behaviors, suggesting that the roles of some growth‐promoting factors, such as human capital and infrastructure, depend on whether an openness threshold is passed.