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The Impact of State Resource Allocation on Urbanisation in Socialist China

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  • Li Zhang
  • Simon Xiaobin Zhao

Abstract

The issue to be addressed in this article is the effect of state resource allocation on Chinese urbanisation. Looking at the key areas of state expenditure, we point out that significant spending on the military and on bureaucratic organisations monopolised a substantial portion of the state's economic and human resources. Such an orientation of resource inputs has sufficed to maintain generally high rates of industrial growth at the expense of civilian interests and has led to a relatively comprehensive industrial structure with an emphasis on heavy industry. However, this pattern of resource allocation has seriously distorted the association between industrialisation and urbanisation as conventionally understood on the basis of Western experience. The allocation of state resources accounted for this irregular association by constraining the growth of non-agricultural employment on the one hand and politicising the acquisition of urban residence rights on the other in the process of economic change.

Suggested Citation

  • Li Zhang & Simon Xiaobin Zhao, 2001. "The Impact of State Resource Allocation on Urbanisation in Socialist China," Post-Communist Economies, Taylor & Francis Journals, vol. 13(4), pages 505-524.
    • Handle: RePEc:taf:pocoec:v:13:y:2001:i:4:p:505-524
    DOI: 10.1080/14631370120095684
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    References listed on IDEAS

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    1. Dong, Xiao-Yuan & Putterman, Louis, 2000. "Prereform Industry and State Monopsony in China," Journal of Comparative Economics, Elsevier, vol. 28(1), pages 32-60, March.
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