338 Eurasian Geography and Economics, 2012, 53, No. 3, pp. 338–355. http://dx.doi.org/10.2747/1539-7216.53.3.338 Copyright © 2012 by Bellwether Publishing, Ltd. All rights reserved. Regional Wage Inequality in China, 1996–2010 Jessie P. H. Poon and Qingyan Shang 1 Abstract: This paper examines regional wage inequality in China between 1996 to 2010, subdividing that time span into a period of increased wage inequality during 1996–2002 and one of stable to decreasing inequality for 2003–2010. Based on the interplay between wage levels and wage growth, the authors develop a typology whereby China’s provinces can be assigned to either peripheral, emerging, lagging, or leading regions. The particular character- istics associated with each type of wage region, and the factors underlying shifts of particular provinces from one category to another between the two periods, enable them to identify speciic causes for the reversal (after 2002) of the trend toward increasing wage inequality (the causes especially relect wage patterns in the mining and energy industries, information and communication technology industries, and foreign-invested enterprises). The recent wage convergence involves instances of both interior provinces advancing from the “emerging” to the “leading” wage category as well as the decline of a few “leading” coastal provinces to “lagging” status. Journal of Economic Literature, Classiication Numbers: E240, J310, J380, 0180. 9 igures, 1 table, 47 references. Key words: China, wage inequality, labor productivity, endogenous regional development, INTRODUCTION C hina’s meteoric economic growth and development over the past two decades has been accompanied by signiicant regional inequality. Several scholars have observed that under the government’s tripartite policy of globalization, marketization, and decentralization during the post-reform years, regional inequality in the country increased markedly during the 1990s (Wei, 2007; Fan and Sun, 2008; Chen and Groenewold, 2011), leading one prominent China scholar and his colleagues to conclude that “China has not only one of the highest rates of economic growth but also one of the highest degree of regional income inequality in the world” (Fleisher et al., 2010, p. 229). Spatial and regional inequality has been predominantly studied in terms of income or GDP, but economic geographers are increasingly calling for a broadening of regional devel- opment perspectives beyond the income measure. Florida et al. (2008) maintain that income captures a region’s wealth, whereas wages directly relect regional labor productivity. A region that is wealthy need not necessarily be economically productive, for example, if it is inhabited by many non-wage residents (e.g., retirees) or is a site that attracts capital light. In other words, because income can come from sources other than wages, it may not adequately represent a region’s productive level and capacity. Yet there is a dearth of studies among geog- raphers on the role of wages in regional development. This paper seeks to address this gap. First, it examines the spatial distribution of wage level among China’s provinces. Second, it attempts to explain the factors that inluence regional wage distribution and inequality. 1 Respectively, Professor of Geography, University at Buffalo-SUNY, Amherst, NY 14223 (jesspoon@buffalo .edu) and Assistant Professor of Economics, University at Buffalo-SUNY, Amherst, NY 14260 (qshang2@buffalo.edu).