REGIONAL INCOME INEQUALITY AND URBANISATION TRENDS IN CHINA: 1978-2005

A long-standing economic literature has delivered rich empirical evidence on the relationship between economic growth and income inequality or urbanisation, since Simon Kuznets' pioneering work on the inverted U curve hypothesis. This paper explores the relationship between urban inequality and urbanisation trends in China from 1978 to 2005, a period that corresponds to the economic opening up of the country to the market economy. One of the main issues, here, is not only to test the correlation between regional income inequality and urbanisation trends, but also to highlight the neighbouring effects of this correlation, mainly through the use of some new spatial analysis tools. This paper delivers two conclusions: firstly, neighbouring effects are stronger when it comes to income inequality than urbanisation; secondly, a distortion in development patterns, between northern and southern coastal China appears: in the first one, growth effects and urbanisation process spread all over the different provinces, while in the second one, Guangdong appears as a regional economic centre.