ABSTRACT
Much of the recent literature on China’s growth refers to the importance of foreign direct investment (FDI) (Huang 2003; Madariaga and Poncet 2007) and the privatization of state-owned enterprises (SOEs) (Garnaut et al. 2005). This chapter, however, focuses on regional spillovers from the coast to an adjacent province and the impact it has on private sector development (hereinafter ‘PSD’). With rising costs of land and labour, as well as changes in environmental regulations in coastal areas, various resources have started to shift from the coastal provinces to adjacent interior provinces. By focusing on four counties in Anhui Province in central China, this chapter describes and analyses the different resource flows from Jiangsu and other coastal provinces to Anhui and the consequent economic impact on private sector development. Furthermore, this chapter analyses the steps taken by four different county governments to attract certain types of resource flow from the coast.
