Factors of Industrial Growth And Regional Inequality-Empirical Evidence from China

The main subjective of this article is to find the change of industrial function of 31 provinces(CHIPs) of China on the basis of provinces' characteristics using 1985, 1995, and 2005's province data and to grasp the relative importance and the difference of growth inequality using factors obtained from factor and cluster analysis. In the results of these analyses, numbers of factor obtained through factor analysis were each four, i.e., the manufacturing industry factor(INC_F), the service factor(SER_F), the livestock factor(STO_F), and the agricultural factor(ARG_F). "INC_F" and "SER_F" appeared to be the most important factors. On the other hand, "STO_F" and "ARG_F" were confirmed to be a relatively less important factor. And in SER_F model of the highest group, regional inequality measured by the Gini coefficient, has increased 3 times from 0.1249 in 1985 to 0.3780 in 2005. The important result of this study show the fact that it is the rapidly increasing regional inequality accompanying rapid increases in per capita income, and the acceleration of intra-regional inequality as well as extra-regional inequality, rural and urban inequality in recent years. The most important function of policy for the improvement of regional industrial function should be to back up the local growth poles, effectively utilize government support, improve industrial efficiency and specialize industrial functions. Conclusionally, policies with regionally heterogeneous characteristics are indicated to be powerful enough to influence and advance regional industrial structure, so as to influence their growth patterns.