China's Regional Development

How China's coastal regions surged ahead after reform, the resulting gaps with inland provinces, and the policies to develop the west and centre.

China’s rapid growth since 1978 was not evenly spread. Coastal provinces, like Guangdong, Jiangsu, Zhejiang and Shanghai, grew fastest, while inland and western provinces lagged.

Why the coast surged

Special economic zones and open cities were mostly on the coast.
Access to ports made exporting cheaper.
Foreign investment flowed to coastal areas.
Proximity to Hong Kong and Taiwan, sources of capital and know-how.

By the late 1990s, income gaps between coastal and western provinces were large.

Migration

Hundreds of millions of workers migrated from inland provinces to coastal factories. Their remittances supported families in home provinces, but the hukou system limited their access to urban services.

Policies to rebalance

Western Development Strategy, often called Go West, launched in 2000, directed investment into infrastructure, energy and industry in western provinces.
Rise of Central China policy from the mid-2000s.
Revitalising the Northeast, China’s old industrial heartland, which faced decline similar to rust belts elsewhere.
Infrastructure: high-speed rail, highways and airports connected inland regions.

Results

Inland provinces, such as Chongqing, Sichuan and Guizhou, grew faster than the coast during parts of the 2000s and 2010s, as factories moved inland seeking lower costs and infrastructure improved. Regional gaps narrowed somewhat. But the northeast continued to struggle with population decline and ageing industries.

Factories move inland

As wages rose in coastal Guangdong, some electronics manufacturers opened factories in inland cities like Chongqing and Zhengzhou, where wages were lower and governments offered incentives. Workers who once migrated to the coast could find jobs closer to home. This shift helped inland provinces grow faster.

Thinking China grew uniformly

China's growth was highly concentrated at first on the coast. Regional gaps grew large before policies and rising coastal costs helped inland regions catch up partially.

Key takeaways

China's coastal provinces grew fastest after reform, creating large regional gaps.
Special economic zones, ports and foreign investment favoured the coast.
Policies like Go West from 2000 invested heavily in inland regions.
Inland provinces caught up partly, while the northeast struggled.