Industrial productivity and convergence in Chinese regions: The effects of entering the world trade organisation

▶ Central regions have recorded the largest increase in industrial productivity. Overall, growth in productivity has been fuelled by an enhancement of technology. ▶ Convergence results do not reveal great changes in the country as a whole following 2001. However, existing regional differences in terms of industrial value added are seen to have increased slightly due to western regions developing more rapidly. ▶ Computing beta convergence makes it possible to conclude that growth in poor regions has outpaced that in wealthy regions, although the rate of convergence barely exceeds 1%. Chinese economic growth is tremendously important, both due to how fast it is occurring and also its effect on the world economy as a whole. The size of the economy and the rate at which it is growing has opened up significant internal regional differences that are visible in the trends displayed by industry as the main exponent of this growth. This article analyses regional differences in industrial productivity using a dynamic approach (Malmquist index), that is, by determining regional productivity growth as well as the change in value added inequality from one region to another (sigma and beta convergence). Both approaches distinguish between the periods dating from 1995 to 2000 and 2001 to 2006, respectively, in order to analyse the possible impact on industry of China becoming a member of the World Trade Organisation.