Economic integration of the Chinese provinces: a business cycle approach

Abstract

This paper uses a correlation of business cycles to gauge the degree of economic integration of the Chinese provinces. The more integrated the provincial economies are, the stronger their correlations should be. Only the correlations between some provinces in eastern China are found to be consistently strong, suggesting that an integrated national economy is yet to be shaped. It also implies that treating China as a single entity could be misleading—even at the macro level—especially in analysing China’s business cycles. Show more