Search IMF Staff Papers

Advanced Search
Journal Description

Editorial Committee

How to Subscribe

Forthcoming Articles

Staff Papers Archive

Copyright Information

Research at the IMF

People's Republic of China and the IMF

Free Email Notification

Receive emails when we post new items of interest to you.

Subscribe or Modify your profile

IMF Staff Papers Logo    Last updated:September 2002
Volume 49, Number 3
Centripetal Forces in China's Economic Takeoff
Anuradha Dayal-Gulati and Aasim M. Husain

Full Text of this Article (PDF 117K)

Abstract: This paper uses provincial time series data from the People's Republic of China to empirically investigate two propositions relating to economic development: (i) that economic takeoff—or an acceleration in economic growth—is associated with inflows of foreign direct investment (FDI), possibly through technological transfer; and (ii) that takeoff is accompanied, at least in the short term, by widening income inequality. The results indicate that FDI flows have increased the rate of convergence in per capita incomes across China's provinces. However, the pattern of FDI, which has gone mainly to the relatively wealthy provinces, has caused different provinces to converge toward different steady states. .
[JEL O4, O11, O18]