Regional uneven development of per capita income and wage disparity with migration in China

Only abstract. Paper copies of master’s theses are listed in the Helka database (http://www.helsinki.fi/helka). Electronic copies of master’s theses are either available as open access or only on thesis terminals in the Helsinki University Library.Vain tiivistelmä. Sidottujen gradujen saatavuuden voit tarkistaa Helka-tietokannasta (http://www.helsinki.fi/helka). Digitaaliset gradut voivat olla luettavissa avoimesti verkossa tai rajoitetusti kirjaston opinnäytekioskeilla.Endast sammandrag. Inbundna avhandlingar kan sökas i Helka-databasen (http://www.helsinki.fi/helka). Elektroniska kopior av avhandlingar finns antingen öppet på nätet eller endast tillgängliga i bibliotekets avhandlingsterminaler.This paper Studies how the wage and per capita income growth are affected by interprovincial migration in China. We analyze regional GDP growth, wage and per capita income between coastal and hinterland regions in Chinese pre-reform and post-reform era. There is a strong evidence to prove that Maoist planned economy was successful in balancing regional economic growth. Gaps in regional GDP grovvth, wage and per capita income were ali lessened between the coastal and hinterland regions. There are not many incentives for labor mobility. However, economic growth is not entirely smooth throughout. There are left disturbances, such as the Great Leap Forward and an overemphasis on the labor factor for production. The main noise is population growth dramatically. Providing the vast population with food, water and living essentials has been a challenging task for Chinese government at end of Mao's era. The economic reform has quickened economic construction from 1978. China as a whole has benefited from rapid economic growth, but this growth favors the coastal region. The regional economies are unevenly developed and the wage gap has widened rapidly across the regions, therefore directly causing huge movement of labor. If it was not managed well and kept under control, interprovincial migration could threaten the sustainability of Chinese economic growth and cause serious political and social instability. Thus, we employ the Amitava Krishna Dutt's model to study the relationship in wage and per capita income with interprovincial migration. The most important conclusion is: Gaps in wage and per capita income are vvidened as interprovincial migration continues occurs. By introducing scholar Robert E. Kolin's work "Immigration and Capital Transfer s'', we find that it is surely possible to reduce the immigration L , even eliminating it down to zero by taking the capital transfer K action at a certain level from coastal to hinterland region. Furthermore, it gives Chinese economic reform the image of being fair for both regions