Current understanding of spatial inequality in China is largely informed by the regional analysis framework (RAF). The RAF is built upon the proposition that the best geographical partition of the Chinese landmass for understanding spatial inequality is a partition into three supra-provincial regions: coastal, central and western. Empirical discussion revolves around how equal the three regions are along several different outcome measures (e.g. per capita income). However, a better framework for understanding spatial inequality is the one developed by Paul Krugman, the “manufacturing zones framework” (MZF), although this framework requires theoretical elaboration to encompass the Chinese reality in a realistic manner.

During the 1980s market reforms proceeded more slowly in Shanghai than in other Chinese coastal cities. Bureaucratic procedures had continued to determine employment conditions and few city residents assumed the risks of entrepreneurship. The pace of marketization quickened in the early nineties and, between 1990 and 1995, the percentage of Shanghainese working outside the state or collective sectors grew by a factor of ten. For the first time since the launching of the economic reforms, private sector activity approached parity with Guangzhou (see Table 1).

Like opening Pandora's box, Chinese reforms have unleashed institutional and social forces which have led to a variety of production regimes co-existing under the permissive banner of “market socialism.” The industrial scene of Guangdong, which boasts of itself as one of the first, the most and the best reformed provincial economies, bears witness to the profound and wide-ranging transformation in production politics. Compared to the era of state socialism, a restructuring of industrial employment has evidently occurred. The 740 state-owned industrial enterprises in Guangzhou, for instance, now account for only 15 per cent of a total of 4,903 industrial establishments, and the 307,000 employees in the state industrial sector account for one-third of the city's 940,000-strong industrial workforce. Twenty-one per cent and 46 per cent of all industrial employees are found respectively in 2,005 collective enterprises and 2,158 private, foreign and joint ventures. As recently as 1985, the state industrial sector was still dominant, employing 65 per cent of the city's industrial workforce, and producing 68 per cent of industrial output. The composition of the work force has also significantly changed: among the 2.03 million urban (including non-industrial) employees in Guangzhou, 700,000 are “registered” migrant workers, of whom 280,000 work in state and collective enterprises. For the province as a whole, registered migrant workers numbered 3.6 million in 1996, while a generally-accepted estimate for the entire migrant labour population reached a staggering 11 million. In the pre-reform days, this massive pool of rural labour was sequestered in the countryside by the hukou system and the number of those who found employment in state factories as temporary contract workers was estimated to be only about 6 per cent of all employees in urban state enterprises by 1978. Complexity is further induced by a new round of deepening reform measures in the 1990s, targeting enterprise ownership, scientific management and labour laws.

Human capital refers to the skills, knowledge and values that individuals acquire in formal schooling, in the workplace and in other settings that raise their productive capacity. In an increasingly global economy, investment in human capital is seen as one of the major strategies for enhancing the economic competitiveness of firms and nations and a major factor in determining the extent of economic polarization among social groups and nations.

The Chinese central-provincial fiscal relationship of the reform era has been at the centre of academic attention in the last few years. It is rapidly becoming one of the most researched areas regarding China. Despite numerous publications, however, there are still some crucial issues that have not been sufficiently elucidated. First, the emphasis of discussions so far has been on formal budgetary relations, particularly the distributive pattern of revenue collection. In reality, the scope and impact of the Chinese budget are very much smaller than those elsewhere and the pattern of revenue collection is only one aspect of the multi-faceted central-provincial fiscal relationship. An appreciation of these aspects and their implications requires a better understanding of the full range of arenas in which the Chinese central government interacts with the provinces over public finance than is currently available. Secondly, it is generally accepted that the Chinese central-provincial fiscal relationship has been decentralized during the reform era, and that this change has underpinned the growing strength of the provinces and the decline in central power. However, the change in the relationship is actually more complex than one-dimensional decentralization would suggest, and the link between fiscal decentralization and political decentralization is less straightforward from a comparative perspective. Thirdly, it is widely accepted that there has been a fiscal decline in China and that the revenue-sharing system – implemented up to 1993 – was the cause of this decline. From this understanding, erroneous conclusions have been drawn. On the one hand, some scholars suggest that this decline signifies a limit on the Chinese state in its relation to the economy, and it is this factor that has underpinned the success of the Chinese economy during the reform. On the other, this decline is considered to epitomize the emergence of a “weak centre, strong localities” situation in China that may eventually lead to the disintegration of the Chinese political system. But it is far from established that there has indeed been a fiscal decline in the true sense of the term. The same can be said on the question of this decline, if it exists, representing the limiting of the Chinese state in relation to the economy or the decline of the central power relative to that of the provinces. Fourthly, in 1994 the Chinese government launched important reforms to the central-provincial fiscal relationship, aiming to replace the previous revenue-sharing system with a tax-sharing system (TSS, or fenshuizhi), and ultimately to stem so-called fiscal decline. Despite earlier reported problems, recent official reports have claimed substantial success of this reform in terms of improvement in the so-called “two ratios” – the ratio of budgetary revenue to GDP, and the ratio of central budgetary revenue to total budgetary revenue. What do these two ratios signify? How should we interpret such success? Does the success on the one hand confirm the allegation that the revenue-sharing system was the cause of the Chinese fiscal decline? And does it on the other hand indicate a strengthening in the centre's power relative to the provinces'?

Proponents of Western-style democracy greeted the Chinese “Democracy Movement” of 1989 with great hope and anticipation. Yet the brutal end of this wave of political protest left many in despair. The rulers of the Chinese Communist Party had made it painfully clear that they would not tolerate any movement or organization which posed a threat to their political control. At the same time, however, observers and analysts also began to question the wisdom and effectiveness of the student protesters who had participated in the movement. Perhaps, many wondered, the students' behaviour had also contributed to the movement's unfortunate finale. In particular, many noted the students' disorganization, lack of respect for democratic procedures and inability to present a united position to the government. In addition, some remarked that the students' exclusive, non-integrative mobilization strategy may have weakened their ability to successfully put pressure on the government.

Since the summer of 1993, the Chinese central party-state has been engaged in a vigorous campaign to reassert control over “thought work,” or the flow of communications messages into and through Chinese society. The chief features of this sustained, omnidirectional crackdown – much more ambitious in scope than earlier, episodic crackdowns such as the 1983–84 “Campaign Against Spiritual Pollution” and 1987 “Campaign Against Bourgeois Liberalization” – include limitations on access to foreign Internet websites; restrictions on satellite television reception; efforts to suppress the surging tide of pornographic and other “bad” print publications; and many other measures aimed at curtailing the circulation of heterodox ideas and images in China. The underlying strategic goal is to restore the Centre's control over the “environment of symbols” from which Chinese people derive many of their most important world views, values and action strategies to pursue interests. If central party-state leaders can resume control over the symbolic environment, they seem to believe they will be much more able to maintain political stability and direct Chinese society towards the achievement of a variety of more specific goals, including reduced crime and corruption, the reform of state-owned enterprises, and the abatement of environmental degradation. On the other hand, a continued haemorrhaging of control over thought work would not only make current problems worse, but could over time facilitate the formation of a semi-autonomous, critical public opinion.

Many studies link family planning programmes to the extensive structure of government control in China. Some emphasize the determining role played by government control in Chinese family planning programmes, and some debate its consequences for human well-being, finding it either negative or positive or mixed. The rigidity of Chinese family planning programmes has been controversial both in China and around the world. There are however very few studies, which consider in detail how family planning policies are formulated and implemented at the local level, under a particular, concrete, social, economic and cultural context.