Forces Shaping China ’ s Interprovincial Inequality Kai - yuen Tsui

This paper explores the forces that shaped China’s interprovincial inequality in the last five decades of communist rule. In so far as the change in interprovincial inequality is the result of differential growth in the provincial GDP per capita and provincial economic growth may be decomposed into contributions by total factor productivity and other factor inputs, a new method is introduced, breaking down the change in inequality into contributions by total factor productivity (TFP) and factor inputs. In particular, the findings suggest that TFP and factor inputs exerted different impact on interprovincial inequality in the Maoist and reform era.