This paper investigates to what extent income growth in the Chinese provinces is linked to growth and income levels in neighboring provinces. We find that the rate of income growth in a province is positively related to income and growth in neighboring provinces. However, we find no evidence of such positive interdependence between growth in rich coastal provinces and their immediate inland neighbors. This suggests that there has been little synchronization in economic growth rates between these regions, and/or that the immediate hinterland of the coastal growth centers might have been bypassed as China’s manufacturing sector has migrated westward.
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