Market integration across regions
Some have argued that China’s provinces are becoming less integrated but, becauseofthemethodandthedata, themeasuresareverydifficult.1 What can we say about regional integration? A number of measures exist to estimate the degree of interdependence betweenseveralregions.Twomainmethodsmaybeidentified:
• directmeasuresof integrationbasedondifferent typesofeconomicflows: tradeflowsandcapitalflows;
• thepotentialconsequencesofintegration,consideringeithertheprocessof specializationof eachprovince,or thepricesfluctuationsor theeffectsof local or national shocks.