The Impact of International Trade on Development Inequality in Developing Countries Evidence from China

Development inequality has been a long-standing issue bothering the governments and many institutions, and is a problem that the United Nations Sustainable Development has been working with. It would lead to fierce phenomena like slow development speed and increasing crime rates. This research aims to explore the relationship between international trade and development inequality, using data from different regions in China as an example. The results suggest that international trade have negative effects on narrowing the development gap between the eastern coastal regions and the central and western regions in income level, living standards and consumption preference. This paper analyses possible reasons for the developmental inequality, such as comparative advantage based on the Heckscher-Ohlin theory and foreign direct investment. It also indicates that developing tourism industry and integrating intangible cultural heritage with souvenirs can boost local economic development in the central and western China. Meanwhile, improving social welfare system will eliminate negative effects caused by international trade.