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To Narrow the South-North Gap, China Needs to Speed up Innovations in Reform and Opening-up (No.112, 2021)

Jul 08,2021

By Hou Yongzhi, He Jianwu and Jia Shen, Department of Development Strategy and Regional Economy, DRC

Research Report, No.112, 2021 (Total 6177) 2021-5-10

Abstract: In recent years, the development gap between China’s southern and northern parts is widening, making regional development imbalance become prominent. The aggregate GDP and per capita GDP in northern region keep falling down below that of southern China. In northern China, the northeastern region and the Bohai-Rim region witness the sharpest drop in GDP. The percentage of added value of northern China’s secondary industry in the whole country sees the largest decrease among three industries. The rapidly widening gap between the south and north regions is a result of multiple causes, but the lack of innovations in reform and opening-up is identified as the fundamental reason for the sluggish development in northern China. In order to boost the growth of northern economy and curb the widening trend in terms of the south-north gap, it is necessary to bring into play the role of the government and the market entities. We need to build a positive business environment by deepening the reform designed to delegate powers, improve regulation and provide better services and support all market entities to make innovations in line with market performance. In addition, we need to provide more policy support to northern China in opening-up and sci-tech innovation in a bid to back up local governments to give full scope to their merits.

Keywords: north-south gap, reform and opening-up, business environment for innovation