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Urbanization and Urban-Rural Inequality in China: A New Perspective from the Government’s Development Strategy |
Justin Yifu Lin1(), Binkai Chen2() |
1. The World Bank, Washington, DC 20433, USA; 2. School of Economics, Central University of Finance and Economics, Beijing 100083, China |
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Abstract This paper offers a novel explanation for the lower urbanization rate and great urban-rural inequality in China. Our study reveals that, heavy-industry-oriented development strategy will result in lower urbanization rate and higher urban-rural inequality. The greater the degree of heavy-industryoriented development strategy is, the lower the urbanization rate is, and the higher the urban-rural inequality is. From a dynamic perspective, heavy-industryoriented development strategy reduces the capital accumulation rate, which results in a slower progress of urbanization and a highly persistent urban-rural inequality. The higher the degree of heavy-industry-oriented development strategy, the slower the progress of urbanization, and the longer the urban-rural inequality will last. This mechanism can potentially explain the lower urbanization rate and higher urban-rural inequality in China under a unified framework.
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Keywords
development strategy
urbanization
urban-rural inequality
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Corresponding Author(s):
Justin Yifu Lin,Email:justinlin@worldbank.org; Binkai Chen,Email:chenbinkai@gmail.com
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Issue Date: 05 March 2011
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