Balanced Regional Growth in China through Optimized Resource Allocation and Industrial Restructuring

Abstract

In the process of industrialization in China, the intervention of administrative forces in the factor market has resulted in the mismatch of resources and the imbalance of industrial layout, which is closely related to the long-standing gap between the eastern region and the central and western regions. This paper is a structured narrative literature review, which examines how optimizing resource allocation and industrial restructuring can promote more balanced regional growth in different stages of industrialization, and accordingly puts forward differentiated factor allocation strategies. The research comprehensively uses four classical frameworks, namely, Petty-Clark's Law, Hoffmann's Law, the Solow Growth Model and the Lewis Dual Economy Theory, and combines with the empirical research on resource allocation and regional growth in China in recent years. Evidence shows that resource allocation following the natural law of industrial evolution is often associated with lower regional imbalance. This paper interprets the existing literature as pointing to two regional patterns: some eastern regions may face the problems of improper upgrading order and insufficient support for innovation activities, while many central and western regions may show weak industrial capabilities and the outflow of skilled labor and capital. Accordingly, this paper puts forward targeted policy suggestions for various regions that match the stage.