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A Fragmented China

Author

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  • Sandra Poncet

    (Faculty of Economics, Erasmus Universiteit Rotterdam)

Abstract

This paper studies the degree of integration of China's domestic market and investigates the determinants of inter-provincial trade barriers under the rubric endogenoustrade policy theory. I rely on industry-level trade flows extracted from provincial input-output tables to develop a model that analyzes the magnitude and evolution of Chineseprovinces' engagement in domestic trade by computing all-inclusive indicators of tradebarriers. Results underline that over the 1990s, not only was China's domestic marketfragmentation along provincial borders great, but it also has become more severe atleast between 1992 and 1997. The investigation of province-level and industry-leveltrade barriers confirms the relevance of applying the framework of endogenous protection to explain the level of impediments to trade between Chinese provinces. Findingsemphasize that provinces' domestic trade protection pursues a dual objective of socioeconomic stability preservation and fiscal revenues maximization.

Suggested Citation

  • Sandra Poncet, 2004. "A Fragmented China," Tinbergen Institute Discussion Papers 04-103/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20040103
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    References listed on IDEAS

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    Cited by:

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    2. Pranab Bardhan & Dilip Mookherjee, 2005. "Decentralization, Corruption and Government Accountability: An Overview," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-152, Boston University - Department of Economics.
    3. Guriev, Sergei & Yakovlev, Evgeny & Zhuravskaya, Ekaterina, 2010. "Interest group politics in a federation," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 730-748, October.
    4. Ding, Chengri & Niu, Yi, 2019. "Market size, competition, and firm productivity for manufacturing in China," Regional Science and Urban Economics, Elsevier, vol. 74(C), pages 81-98.

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    More about this item

    Keywords

    International Economics: Economic Orders; Economic Integration and Globalization; General; Country and Industry Studies of Trade; Economic Integration; Economywide Country Studies: Europe; Regional Governmental Analysis: Regional Development Policy;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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