Regional Inequality in China During its Rise as a Giant Exporter: A Value Chain Analysis

Yuwan Duan, Erik Dietzenbacher, Bart Los, Ruochen Dai
DOI number
#Trade and FDI
#East Asia and Pacific
Additional info: Article published in the Journal of Regional Science

China's exports success has implications for regional income inequality, because most of its export products are manufactured in the coastal zone. We propose a value chain–based accounting framework to quantify the contributions of exports to regional income inequality. We employ newly developed interregional input–output tables for China, which distinguish between processing export activities and ordinary export activities. We analyze the period 2002‐2012, the decade during which China became the “Factory of the World”. We find that an RMB of processing exports contributed much more to regional inequality than an RMB of ordinary exports or domestic final demand. Still, changes in regional inequality (increasing in 2002‐2007 and decreasing between 2007 and 2012) are much more due to rising ordinary exports in the first subperiod and the growth of domestic final demand coupled with changes in the configuration of value chains in the second. JEL F63, R12, R15 This article is protected by copyright. All rights reserved.


Bart Los

University of Groningen

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