This paper examines the spatial economic impact of China's two main spatial development policies: restricted labor mobility through the Hukou residential registration system, and the construction of a 96,000 km national expressway network (NEN). Using a structural new economic geography approach, we find that these policies have shaped regional economic development and urbanization patterns across China in very different ways. The construction of the NEN has reinforced China's existing core-periphery patterns: initially lagging regions not connected to the NEN have not benefitted much from its construction. By contrast, a removal of the Hukou restrictions is predicted to result in much more widespread welfare gains, allowing all people to benefit by moving to where they are most productive. Interestingly, it would even promote urbanization in currently lagging (inland) regions, mostly by stimulating rural outmigration.
|Number of pages||19|
|Journal||Regional Science and Urban Economics|
|Publication status||Published - Jul 2018|
Bibliographical noteFunding Information:
The authors thank the editor and three anonymous referees for comments and suggestions that significantly improved earlier versions of the paper. We also thank Harry Garretsen, Vernon Henderson, Bert Hofman, Laura Hering, Diego Puga, Karlis Smits, Maisy Wong, and participants at the 2nd Urbanization and Poverty Reduction Research Conference and the 2014 North American Urban Economics Association meetings for helpful feedback on our paper. Financial support from the World Bank's Knowledge for Change Program is gratefully acknowledged. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.
© 2018 Elsevier B.V.