Infrastructure, knowledge creation, knowledge spillovers and economic growth in China

The New Economic Geography [NEG] considers, within the context of economic development, whatare known as forces of agglomeration and forces of dispersion. This thesis considers the latter has deagglomerationeconomies between regions. Agglomeration economies necessarily result fromincreasing returns to scale. However, how these arise is very much a black box. It is the contention ofthis thesis that agglomeration economies arise directly as a result of concentrated infrastructureinvestment .For example, a concentrated investment in infrastructure in the SEZ's[manufacturing] andNHTIDZ's[knowledge ] of the coastal regions of China has led to the Coastal regions prosperity andthe expense of the interior regions. On the other hand, de-agglomeration economies arise fromknowledge spillovers, but the NEG gives no analysis of the impact of knowledge creation.When knowledge spillovers and knowledge creation are greater in one region of a country compared toanother, then the forces of de-agglomeration are stronger between a country's regions; and only serveto increase disparities in income between these regions. This effect is enhanced if the forces ofagglomeration in one region of a country are greater, through enhanced infrastructure investment, thanin any other region.This thesis has analysed the impact of government policy on infrastructure, knowledge spillovers;and knowledge creation on China's economic growth since 1949.The analysis has evaluated how theforces of agglomeration and de-agglomeration have impacted on China's economic development. Inthe light of this analysis, the fundamental reasons for the deepening disparities in income betweenChina's regions has been laid bare, the IKSC [Infrastructure, Knowledge, Spillover, Creation]framework has been developed to evaluate a country's economic development.