The Relationship between Coastal Preferential Policies after 1980s and Inequality of Regional Development in China

Preferential policies implemented in the coastal regions in China after 1980 have enhanced the economic development of eastern coastal provinces, while inland provinces are left with less development opportunities, leading to increased regional economic inequality. Although abundant research has been conducted in 1960s and 1970s to evaluate the macroeconomic impact of coastal preferential policies, less focus on revealing the pathway in which these policies enlarge regional inequality and how different regions could effectively respond. This paper takes Pearl River Delta and Guizhou Province as cases to discuss the impact of preferential policies implemented in coastal regions on regional inequality and its mechanisms. By comparing economic data and other indexes, there is a stark regional gradient difference between Pearl River Delta and Guizhou in terms of GDP, economic structure, human capital net flow. This essay confirms that such economic inequality is largely due to preferential policies toward coastal regions. Moreover, these preferential policies are self-reinforcing, and the initial effect of policies is amplified through capital and human capital agglomeration and financial mechanisms, resulting in continuous enlargement of coastal advantages.