Foreign trade, local protectionism and industrial location in China

Abstract

In this paper, we find that, in China, geographical changes of industrial bases in the 1980s had led to a slight drop in the extent of specialization and location imbalance, but in 1990s the specialization and industry imbalance have further developed. The geographical advantage for trade has a significant impact on the location patterns, and the effects of local protectionism are confined to the hinterland in 1990s. The role of comparative advantage in shaping industry location is evident, and some predictions derived from new economic geography are partially supported.