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Urban Economic Growth in China: Theory and Evidence

Department of Economics, University of Nebraska at Omaha, Omaha, Nebraska 68182, USA, shuanglin_Lin{at}unomaha.edu

Shunfeng Song

Department of Economics, University ofNevada, Reno, Nevada 89557-0207, USA, song{at}unr.nevada.edu

This paper analyses the relationship between per capita GDP growth and investment, foreign direct investment, labour force growth, government expenditure and urban infrastructure based on the data for 189 large and medium-sized Chinese cities for the period of 1991-98. Cross-sectional analyses indicate that several factors, such as foreign investment, paved roads and government expenditure on science and technology are positively related to per capita GDP growth, while the overall size of government, measured by total government spending share in GDP, appears negatively related to per capita GDP growth. Contrary to the literature on economic growth, total investment share in GDP is insignificantly related to per capita GDP growth. Also, there is no clear evidence of convergence in per capita GDP among Chinese cities.

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