Economic Transition and Convergence of Regional Industrial Structure in China
经济转型与中国省区产业结构趋同研究

China has undergone substantial industrial restructuring since the economic transition. The triple process of marketization, globalization and decentralization has a significant influence on the changes of industrial structure in Chinese provinces. Marketization and globalization may motivate provinces to develop industries based on their comparative advantages while decentralization may work in the opposite way. There are forces that stimulate the structural convergence among Chinese provinces and also forces that lead to industrial structural divergence. Using data from the first economic census conducted in 2004, this paper finds out that Chinese provinces are quite similar in their industrial structures. Industries contributing to the convergence of industrial compositions among Chinese provinces differ in different time periods. Provinces with similar industrial structure share a number of common characteristics. Statistical results indicate that marketization has enhanced the role of comparative advantage endowed in natural resources, stimulating the divergence of industrial structures of Chinese provinces with different resource endowments while encouraging provinces with comparable endowments to develop similar industries. However, decentralization generates economic fragmentation of domestic markets, fueling inter-provincial protectionism and rational imitation, and leading to the convergence of industrial structures among Chinese provinces. Globalization has two effects. On the one hand, the globalized provinces have been converging in their industrial structures. On the other hand, the globalized provinces have rather different industrial structures from the underperformed provinces in exports and utilization of FDI. The empirical results imply that economic transition and its consequences are critical in understanding the industrial restructuring in China.