Urban Trends and Economic Development in China: Geography Matters!

Abstract

The aim of this paper is to document the role of spatial effects in the relationship between urban trends and economic development in China, between 1984 and 2004. During this period the Chi-nese urban system experienced dramatic changes, with significant rural-urban, intra-provincial and interprovincial migration, mainly after the 1993 reforms that eased the former Hukou rule and abolished the prevailing cross-region labor mobility restrictions. This study draws upon recent econometrical tools based on spatial panel data models, developed in order to deliver evidence for a linear relationship between urbanization rates and GDP per capita and an inverted-U relationship between urban primacy and GDP per capita in the Chinese provinces.