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What is reason for widening economic gap between North and South?

The GDP data for all provinces and regions of country for 2019 has been published. In terms of economic data, economic aggregate of southern region is 65% of national aggregate, while northern region is only 35% of national aggregate. The Southwest region, which has lowest economic level in South, almost surpassed Northwest and Northeast regions. Why is gap between North and South widening? We must look at problems from point of view of historical development and use economic laws to analyze problems.

What is reason for widening economic gap between North and South?
1. Northern pioneer advantage in ancient times

The shift of economic center of gravity to south is a historical trend in economic development of Ancient China. This tells us that at an early stage China's economic center of gravity was in north, and at a later stage it shifted to south. Why does such a phenomenon exist? Let me first talk about why north was early economic center of gravity.

  • China is an agricultural and civilized country
  • The ancient world mainly includes an agricultural civilization, a maritime civilization, and a nomadic civilization. Maritime civilization attaches great importance to development of coastal territories, and agricultural civilization - to development of inland areas. China is most typical agricultural civilization. At dawn of civilization, more favorable place for birth of agriculture, more developed civilization was. In ancient times, economy of north was more dependent on agriculture, while south was more in need of a commodity economy.

  • The north is more favorable for development of primitive agriculture
  • In China, agriculture originated earlier in south than in north, but in south there are more mountains and fewer flooded plains, making it difficult to develop land. Most of northern plains are formed by influence of Yellow River, and soil is loose. Before Spring and Autumn period and Warring States period, agricultural tools used by Chinese were mostly primitive agricultural tools, and there were very few metal agricultural tools, so they were more suitable for development in north.

  • In ancient times, northern climate was warm
  • The climate in ancient China was constantly changing, but in general climate in north before Spring and Autumn and Warring States periods was similar to current subtropical climate with warmer temperatures and abundant rainfall. Such a climate favors development of agriculture. At that time, ecological and natural environment in north was also very good: Loess Plateau was still a large area of ​​forest, and Hexi Corridor was full of lush water and grass.

    What is reason for widening economic gap between North and South?
Second, belated advantage of South

    With development of social productive forces and changes in natural environment, advantages of South began to appear. With beginning of Spring and Autumn Period and Warring States Period, these kinds of changes began to appear, and development of south accelerated. The advantage of South manifests itself in several ways.

  • The south is more favorable for development of a resource-based economy
  • Economic development of man is gradually moving from a subsistence economy to a commodity one. In south, there are many rivers and lakes and a large number of excellent ports, which are more conducive to development of commerce and foreign trade. For example, during Western Han Dynasty, Lingnan was still very backward, but Guangzhou at that time became center of China's foreign trade. Especially after opening of new sea route, international trade along southeast coast became extremely prosperous. There is also an international trade route, Silk Road, in north, but means of transportation along this road are mainly horses and camels, and traffic is limited. In addition, nomads greatly interfered with Silk Road on way. Since Song Dynasty, Silk Road has fallen into disrepair.

    What is reason for widening economic gap between North and South?

    The ancient economic center of gravity has shifted south

  • Iron agricultural tools accelerated development of agriculture in south
  • The Spring and Autumn Period and Warring States Period saw introduction of iron plows and pastoralism, which then continued to advance throughout country. As a result, a large number of lands that were difficult to develop in south began to be developed. During Han Dynasty, Sichuan Basin, Jianghan Plain and Jiangnan District had already become land of fish and rice. Under Sui and Tang dynasties, economies of North and South were largely balanced. During Song Dynasty, "Suhu is ripe, world is full", and during Ming and Qing dynasties, it was "Huguang is ripe, world is full."

  • The climate in south is more favorable for growing crops
  • The south receives more rainfall than north, temperatures are warmer, and crop growth cycles are shorter. After advent of two crops a year during Song Dynasty, advantages of south were further revealed. In past, scale was limited due to land development, and later a large amount of land was developed, resulting in more food being produced in south than in north. During Song Dynasty, there was a saying: “Suhu is ready, peace is enough,” and during Ming and Qing dynasties, there was a proverb: “Huguang is ready, peace is enough.” However, climate in north continued to be dry, forests were constantly destroyed, meadows turned into deserts, and forests on Loess Plateau disappeared. Thus, area of ​​arable land in north has decreased, and production has also suffered to a certain extent.

  • The social environment is more stable in south
  • To west of south of Hengduan Mountain, to south of Southeast Asia, to east of sea, there are almost no external threats around, and it has always been relatively stable. The north is facing influence of nomadic peoples in four areas: desert, Qinghai, western regions and northeast, and there have been constant wars in history. The war caused a lot of damage to economy. Whenever a war breaks out, a large number of northerners migrate to relatively stable south, which accelerates development of south.

    What is reason for widening economic gap between North and South?
3. Changes in North-South economic model after founding of New China.

    Changes in China's modern economic structure are mainly due to continuous progress in line with ancient trend of development. For example, commodity economy is constantly replacing subsistence economy, and economic share of southeast region continues to grow. But after founding of New China, there was a counterattack in northern economy. Why is this?

  • New China had a planned economy for first 30 years
  • We now use term "market economy" instead of term "commodity economy". After formation of PRC, "three major transformations" were carried out, turning Chinese economy into a highly centralized planned economic system, that is, Soviet model. The biggest advantage of this economic system is that it can focus on development of economy, and biggest disadvantage is that it ignores objective laws of economy, low economic activity and low standard of living of people. During economic period, most Chinese investment has been towards north, especially northeast. This caused a short-lived "renaissance" in economy of North. If state invests a lot of money in Qinghai and Tibet in this era, Qinghai-Tibet Plateau may not become an industrial base.

  • There are plenty of coal and iron resources in north
  • The main feature of Soviet model is priority of development of heavy industry, and main resources of heavy industry are coal mines and iron ore, which are basis of industry. China's coal and iron resources are mainly concentrated in north. Not only coal and iron, but also "blood" of modern industry - oil is mainly distributed in north. That is why North plays an important role in process of industrialization. In virtually every country in era of early industrialization, cities with coal-mining resources, such as northeastern United States, northern England, and Ruhr area of ​​Germany, will emerge. From this point of view, revival of north of that time also had certain economic patterns.

    What is reason for widening economic gap between North and South?

    After reforms and opening up, economy in south has grown rapidly. Now that economy in south has outperformed economy in north, why?

  • The market economy system replaced planned economy system
  • After reforms and opening up, China began to reform its economic system, gradually abandoning Soviet model and learning from Western market economy model. This is also in line with trend of world economic development. A market economy system was established, and advantages of South began to emerge again. For example, residents of Guangdong and Fujian have closer ties with foreign countries and can attract foreign investment and technology. Sea transport in south is more convenient. In north, traditional planned economic system is relatively limited and it is difficult for people to change their mindset. At same time, international competitiveness of heavy industry products produced in north is relatively low, while competitiveness of light industry products in south is more obvious.

    What is reason for widening economic gap between North and South?
  • The advent of information age
  • From second industrial revolution until end of 20th century, mainstay of century was heavy industry, that is, an economy based on coal and iron. However, after 1990s, information revolution that began in United States reformed world economic structure. The development of high-tech industries, such as nuclear energy, microelectronics and genetic technologies, has turned national economic competition into a technological one. This change has led to demise of most of world's resource-intensive cities and emergence of technological smart cities one after another. Nor can large raw-material cities of north, which arose in era of planned economy, escape this trend. In contrast, cities in south that travel light are more likely to embrace this new industry, such as Hangzhou and Shenzhen are such high-tech cities. At present, China's main Internet giants are based mainly in south.

    What is reason for widening economic gap between North and South?

    Although economic gap between North and South is widening, this does not mean that North will shrink, because gap is only relative. The regional economies of any country are not balanced, even in United States. Each region must find a model suitable for its economic development, and a division of labor must form between regions. Thus, economy will be relatively coordinated.

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