This study analyzes the evolution of China's regional inequalities during the reform period of 1978-1998 based on three geographical scales, both output and livelihood indicators of economic well-being and three measures of inequality. The results indicate that interprovincial and regional inequalities declined between 1978 and 1990, but have widened steadily since 1990. Urban-rural disparity diminished before 1984, then experienced a decade-long surge afterwards to peak in 1994 at a much higher level and since 1994, it has been declining again. The levels of regional inequalities in China appear to be sensitive to changes in government development strategies and regional policies. Differential growth of the provincial economies shaped by the coast-oriented and urban-biased development strategies as well as selective open-door policy implemented by the Chinese government after the reform is the key to understanding the wax and wane in China's regional inequalities. This paper discusses the factors that account for the changing regional inequalities in post-reform China and argues that government policies are likely to continue to influence the future trajectories of inequality change. Copyright 2002 Gatton College of Business and Economics, University of Kentucky.

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Retailing in Chinese cities has experienced rapid changes in the reform era. One of the most visible changes in the urban retail landscape has been the emergence and growth of new retail formats. Using Beijing as a case study, this paper examines the evolution of retail formats in Chinese cities. The paper investigates the impacts of the changing external environment, especially the shift in government policies, on the structure of retail formats. It argues that to understand the rapid restructuring of retail formats in Chinese cities one needs to take into account the factors such as political, economic and social-cultural environment, and perhaps more importantly, regulatory changes. The consequences and implications of observed retail changes are discussed.

Using a decomposition method, this paper proposes an analytical framework to investigate the mechanisms by which agricultural support policies affect farmers’ use of fertilizers in agriculture in China. The mechanisms are decomposed into “three effects” (structural, scale, and technological effects). It is found that China’s agricultural support polices have significantly contributed to the increased use of agricultural fertilizers through encouraging farmers to bring more land under cultivation (the scale effect). Meanwhile, some policies have also helped reduce fertilizer consumption when farmers were motivated to increase the area of grains crops (the structural effect). The role of technological progress in affecting fertilizer consumption (the technological effect) appears to be minimal and uncertain. Compared to direct subsidies, indirect subsidies play a much greater role in affecting farmers’ production decision making and are more environmentally consequential. This paper argues that some of China’s agricultural support policies are not well aligned with one key objective of the country’s rural policies—improving environmental sustainability. It is recommended that the government takes measures to reform agricultural support policies and to reconcile agricultural and rural policies in order to achieve sustainable rural development.

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This paper examined the relationships among firms in a rapidly growing specialized industrial cluster—the Chery automotive cluster located in the Wuhu Economic and Technology Development in eastern China. After demonstrating how the Chery automotive cluster contributed to sustainable regional economic development, it focused on defining the roles that major firms play in the localized production network. Based on three attributes of the firm (network linkages, network position, and network power), the study identified a typology of firms’ role, including the dominant core, lead firms, gatekeepers, intermediaries, club of foreigners, peripherals, and loners. By revealing the heterogeneity of the firms and discussing the differing roles they play in the network, the paper made some policy recommendations to promote the sustainable development of the cluster, including providing policy supports to core firms, encouraging inter-firm networking and interaction, and diversifying the cohort of gatekeepers.