This paper, utilizing a Granger causal approach, examines the causal relationship between regional exports and economic growth in mainland China over the period of 1979-1989.
The empirical results suggest that one-way causality runs from exports to economic growth in the coastal region, and there are no other significant Granger causality results in either the central or western regions.
This finding implies that economic reform policy has favored the coastal region more than the central and western regions. The coastal region has assumed a pivotal role in the reform period and has outgrown other regions. Therefore, the gap of economic development between regions is likely to widen further.
To alleviate the regional economic development disparities that are arising, current regional development policies that clearly favor the coastal regional economic development must be revised.
