City-Biased Economic Policies, Urbanization, and Urban - Rural Market Segmentation in China

Abstract

Since the introduction of market reform in the late 1970s China has had the fastest-growing major economy for the past 30 years with an average annual GDP growth rate above 10%. In tandem with the rapid developments, however, China’s market has maintained many of the dual features for a prolonged period. Among the dual features, spatial separation of urban and rural markets is, if not the only, a main form and its disadvantages have been gradually affecting the long-term economic development of China. A large literature has been analyzing the patterns of market behavior between urban and rural regions and attempting to draw conclusions from that behavior about the nature of the underlying market. In particular, many analysts have attempted to draw conclusions about the degree of market segmentation and the causes for it.