Economic Convergence in Greater China: Mainland China, Hong Kong, Macau and Taiwan

by Lei; Chun Kwok

• ISBN13: 9780415435819
• ISBN10: 0415435811
• Edition: 1st
• Format: Hardcover
• Copyright: 2009-01-15
• Publisher: Routledge

Summary

Although China's economy has grown very rapidly in recent decades, there are still very large differences between the economy of mainland China and the economies of Hong Kong, Macau and Taiwan. For example, per capita income in Hong Kong is many, many times higher than per capita income in mainland China. This book considers the degree to which economic convergence between mainland China, Hong Kong, Macau and Taiwan has occurred, and the prospects for increased convergence in the future. It considers economic integration between China and its two Special Administrative Regions (SARS), emphasising the large volume of capital flows and exports, especially from Hong Kong into China, and showing that the economies are highly integrated, despites their differences. It examines income convergence, and changes in productivity, using the same measures for both China and the two SARS, unlike most existing studies. It explores how economic reforms have been crucial to increasing convergence so far, and will continue to be in the future, and concludes by discussing the implications for policy of encouraging increased convergence.

Author Biography

Shujie Yao is Professor of Economics and Chinese Sustainable Development at the University of Nottingham, UK. He is Special Chair Professor of Economics, Xi'an Jiaoting University, China. Chun Kwok (Henry) Lei is Assistant Professor of Economics in the Department of Finance and Business Economics, University of Macau, China.

Table of Contents

List of tables	p. x
Preface	p. xiii
Acknowledgement	p. xxii
Abbreviations	p. xxiii
Introduction	p. 1
Economic integration	p. 1
Economic integration in practice	p. 2
Stages of economic integration	p. 3
The role of China in the world economy	p. 3
The economic integration between China, Hong Kong, Macau and Taiwan	p. 6
Significance of the economic linkage between China, Hong Kong, Macau and Taiwan	p. 10
Conclusion	p. 12
Economic profiles of China, Hong Kong, Macau and Taiwan	p. 15
Introduction	p. 15
China	p. 16
Hong Kong	p. 40
Macau	p. 53
Taiwan	p. 61
Conclusion	p. 68
Economic integration between China, Hong Kong, Macau and Taiwan	p. 70
Introduction	p. 70
The trade tie	p. 71
Foreign direct investment	p. 91
Human flows	p. 99
Conclusion	p. 104
Parametric analysis of the economic integration between China, Hong Kong and Macau	p. 107
Introduction	p. 107
Correlation of real gross domestic product per capita	p. 108
Cointegration analysis and vector error correction model	p. 110
Consequences of economic integration	p. 123
Conclusion	p. 123
Income convergence between China, Hong Kong and Macau	p. 125
Introduction	p. 125
Diversification in economic performance	p. 125
Disparities at national level	p. 126
Disparities at the regional level	p. 129
Income convergence between China, Hong Kong and Macau	p. 133
Stochastic convergence	p. 154
Conclusion	p. 157
Total factor productivity convergence between China, Hong Kong and Macau	p. 159
Introduction	p. 159
Total factor productivity in stochastic frontier approach	p. 159
Total factor productivity measurement	p. 163
Estimation results	p. 166
Convergence in total factor productivity	p. 174
Conclusion	p. 181
The closer economic partnership agreement between Mainland China, Hong Kong and Macau	p. 184
Introduction	p. 184
The closer economic partnership agreement	p. 185
Impacts of CEPA	p. 187
CEPA in practice	p. 190
Conclusion	p. 196
Reduction of income dispersion	p. 199
Introduction	p. 199
Methodology	p. 200
Estimation results	p. 201
Policy suggestions	p. 202
Conclusion	p. 204
Conclusions, policy implications and prospects of economic convergence in Greater China	p. 206
Economic integration of the Greater China economies	p. 206
Economic integration between Mainland China, Hong Kong and Macau	p. 208
Income convergence between Mainland China, Hong Kong and Macau	p. 208
Convergence in total factor productivity between Mainland China, Hong Kong and Macau	p. 210
Reforms as a driving force of economic convergence in Greater China	p. 211
Policy implications and prospects of economic convergence in Mainland China	p. 212
Notes	p. 217
Bibliography	p. 220
Index	p. 234
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