Spatial inequality of rural industrial development in China, 1989–1994

Rural industry, having benefited from market oriented reforms, has surpassed state owned industry and become the largest industrial sector in China since 1993. Using multiple indicators, this study reveals a highly unbalanced spatial distribution and an increase in inequality of rural industrial development. It also classifies the level of development at the provincial level from 1989 to 1994. The relationship between rural industrial development and internal and regional characteristics is analyzed by multiple regression analysis. A very high correlation between rural industrial development and regional market indicators resulted in the conclusion that rural industry is a market economic sector and its development is driven by market forces in Chinaʹs dual economy. The spatial patterns of rural industrial development reflect the viable, even optimum, location patterns created by the experience of the market economy. Although government policies attempted to reduce the inequality of rural industrial development among regions, the widened gap between rich and poor in the period 1989–1994 demonstrated the strong impacts of the concentrating effects of market forces.