A data mining analysis of the Chinese inland-coastal inequality

Abstract

As in many countries, even in China the socio-economic changes have affected income inequality in recent decades. The various economic opportunities have led to different paths of development causing severe disparities in GDP per capita level. In addition to the well-known Chinese rural/urban inequality, in this work we study the inland/coastal differences. There are many known causes of inequality, but we aim to discover the actual determinants of the local GDP and, therefore, of income in a period that includes the international economic crisis started in 2007. With this aim, we use different variables to obtain clusters of the Chinese provinces in the period 2004–2015 and, subsequently, we investigate the determinants of income with a multivariate adaptive regression splines (MARS). There is an extensive economic literature on the Chinese case: MARS allows us to integrate this literature enabling us to find which GDP determinants are the most relevant in the certain areas of China.