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This paper seeks to address the causes of growing income inequality between Chinas coastal and interior regions in the 1980s and early 1990s Since the late 1970s Chinas coastal regions have experienced rapid growth rates Compared with these coastal areas however inland regions do not seem to have been as successful Between 1978 and 1993 the ratio of mean GDP per capita between coastal and noncoastal regions grew from 253 to 282 Poverty in inland areas is widespread income in the western regions is currently 65 percent of the national average Given these conditions finding the root of inequality should be a pressing concern for the Chinese government In addition determining the causes and trends of inequality between regions has importance for Asias other developing economies Providing a model for growth that will allow less advantageously located regions to develop at the highest possible rate raises the chance that the benefits of development will reach more than selected areas This paper will argue that government policies that gave preference to economic development in coastal regions starting in the 1970s has led to increased income inequality between Chinas coastal and inland regions Methodology This paper will focus on Chinas coastal and interior regions However such labels as coastal and interior are not fixed the provinces included under these headers have varied in studies of Chinese income inequality In general these studies agree that the coastal region includes Beijing Liaoning Tianjin Hebei Shandong Jiangsu Shanghai Zhejiang Fujian Guangdong and Guanxi provinces As for inland regions studies such as Terry Cannons have divided the remaining provinces into a central and a west zone Cannon further notes that certain considerations should be factored into any scheme for dividing Chinas provinces Pointing out that the Chinese government has been in a position to influence how the country has been divided possibly ignoring important local differences coastal provinces have some of the countrys poorest villages while areas such
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