Spatial and temporal scale analysis on the regional economic disparities in China

By using the multi-stage nested Theil decomposition method and the wavelet analysis of the Theil index sequence, this paper studies the spatial and temporal scales of regional economic disparities in China from 1952 to 2000. The main conclusions are: (1) the regional economic disparities in China, including the disparities within-province, between-provinces, within-region (the eastern, central and western regions) and between-regions, have existed since 1952. (2) The first stage decomposition of Theil index shows that the dynamic trend of disparity in the eastern region is consistent with that of whole China. The disparity in the central and western regions remains small, and the evolution is rather slow. The disparity between the three regions has been continuously increasing. (3) The second stage decomposition of Theil index reveals that the within-province disparities is the most significant component of all in the overall regional inequalities, which is more significant than that of the between-province and between-region disparities components, constituting the important part of the overall regional inequalities. In addition, the influence of within-province disparities in the eastern region on the overall regional inequalities is more significant than that of in the other two regions, and, the influence in the western region is more significant than that of in the central region. (4) Based on the decomposition and approximation of Theil index sequence using wavelets by different time scales, we elicit a conclusion that the evolutionary process of regional economic disparity in China is not a simple inverted U-shaped pattern but a compound of several U-shaped patterns. The result tells us the evolutionary process of regional economic disparity in China does follow the inverted U-shaped patterns a time scale of 16 years. That is to say that the regional inequality tends to rise in the first stage of economic development, and falls slowly over the peak in the second stage of economic development. However, if we shorten the time scale to 8 or 4 years, then a link of several U shaped patterns will appear.