INTRODUCTION

The spatial arrangement of population and economic activities is an important and complex dimension of Chinese economic development. Yet it is understudied, with Yuan-li Wu's (1967) classic work, The Spatial Economy of Communist China, standing as the last comprehensive analysis, which is now seriously outdated. This present chapter is not intended to be its update. Instead, we aim at a more modest goal: to examine two key aspects of changes the Chinese spatial economy has undergone in the past half century, with a focus on the last ten or fifteen years. These two changes are (a) the extensive urbanization that has occurred since the early 1980s, involving migration from rural areas to traditional cities and industrialization of the rural sector with growth of many townships into urban centers and expansion of existing cities and (b) the changing spatial inequalities across provinces, resulting from allocation of state investment and budgetary resources, distribution of foreign direct investment (FDI), and other pertinent factors. It is hoped that this chapter will help the reader to understand the enormous changes in the spatial configurations of the Chinese economy, how they are shaped by the institutional landscape and policies, and how they have impinged on economic development.

As a prelude to our subsequent discussion, it is useful at the outset to briefly highlight some critical economic thinking on the importance of the spatial dimension in the process of development.