Investigating regional income convergence in China: an exploratory spatio-temporal perspective

Uneven regional development has become an issue in China since the Open and Reform Policy in the 1980s. The imbalance can be observed as the “coastal-west divide” in previous convergence studies. This paper aims to investigate the convergence of income and its determinants across Chinese provinces from 1999 to 2017 by including the role of space. Our findings from a new exploratory technique in spatial analysis show convergence in income and investment but not in human capital, which is in line with results from non-spatial classical convergence models. We confirm the investment-driven economy in China and suggest that investment mainly facilitates the convergence trend of regional income and gradually narrows the coastal-wide divide. Targeting investment and spatial connectivity in low-income regions could be a key policy direction to achieve balanced regional development.