Policy implications of China's regional inequality

China has experienced a rapid economic growth in three decades as a result of market-oriented reforms. However, regional inequality in China has also shown a tendency to increase over the past three decades. Though often overlooked in analyses of China's rapid economic growth in recent years, the existing literature suggests that ensuring the benefits of growth shared equally is a key component of social and political cohesion. This study explores the policy implications of regional inequality in China concerning historical review and policy recommendation. The main findings of this study to address the regional inequality are two points: first, new policies should provide more business chances for the inland region, in particular, government should set new SEZs (Special Economic Zones) in central and west in order to link the regions together sharing the benefits of economic reform; moreover, through the reform of SOEs (State-owned enterprises), the country should let private sectors gain more incentives and dynamic to boost the efficiency of economic development especially interior areas.