Foreign investment and trade: impact on spatial structure of the economy

Today's tolerance and encouragement of spatially unbalanced growth should be seen in the context of the past history of regional policy in China. This attempted to force development in locations and settlements which were often not the most suitable. It seems now that China hopes the coastal regions will become "growth poles' which will help to develop the interior provinces. Regional policy aims to develop the interior provinces and link them to the modernisation and industrialisation which is so rapidly taking place in the coastal provinces. Particular attention must therefore be paid to developing transport links, as the poor network presently deters foreign investment in many interior locations. Immense efforts have been made to shift manpower and resources to the west; however, there have been few changes in the past four decades in the overall east-west balance in China. Indeed, it seems likely in view of greater regional specialisation, competition and recognition of comparative advantage and scale economies, that regional disparities will increase in the future. -from Authors