In the mid-1980s economic reform began in earnest in urban China. This involved the gradual dismantling of central planning, the decentralization of decision making to enterprises, and the emergence of markets. Reform of the labor market was tardy, but both the decentralization and the introduction of market forces were likely to affect wage setting. The changes occurred at different rates across provinces and cities. A spatial analysis of urban wages and income per capita may therefore reveal interesting patterns.