Which is important?—the economy or people’s livelihood

Abstract

The adjustment of industrial structure not only is an important driving force of economic development but also affects the income gap between urban and rural areas through the effect of resource allocation. Based on this, this article constructs an index of the adjustment range and adjustment quality of the industrial structure. The results show that the adjustment of industrial structure in the eastern region has significantly promoted economic catch-up but inhibited the widening of the income gap between urban and rural areas. The adjustment range and quality of industrial structure in central China has promoted economic catch-up, but the adjustment quality has inhibited economic catch-up. In the western region, the adjustment range and quality of the industrial structure have restrained the regional economy from catching up and expanding the income gap between urban and rural areas. In the eastern and central regions, economic catch-up and the narrowing of the urban-rural income gap significantly promote each other, while in the western region, economic catch-up and the urban-rural income gap significantly promote each other. This shows that both economic development and people’s livelihood improvement can be achieved in economically developed areas but not in underdeveloped areas.

Keywords:

• Economic overtaking
• urban-rural income gap
• adjustment of industrial structure
• economic development and people’s livelihood

JEL CLASSIFICATIONS:

• J01
• N15
• O15

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 The National Bureau of Statistics divides China's economic belt into eastern, central, western and northeast regions, and it is of little significance to separate the northeast region. This paper divides China's economic belt into three major economic belts: central, eastern and western. The eastern region includes 11 provinces (municipalities): Beijing, Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Hainan. The central region includes Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei and Hunan Provinces. The western region includes 11 provinces (autonomous regions and municipalities directly under the Central Government): Inner Mongolia, Guangxi, Chongqing, Sichuan, Guizhou, Yunnan, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang.