China is currently seeking to transform its economic structure from a traditional industrial to a more innovative, human-capital driven, and knowledge-based economy. Our research examines the effects of three key factors on Chinese regional development in an attempt to gauge to what degree China has transformed from an industrial to a knowledge-based economy, based on higher
levels of (1) technology and innovation, (2) human capital and knowledge/professional/creative
occupations, and (3) factors like tolerance, universities, and amenities which act on the flow of the first two. We employ structural equation models to gauge the effects of these factors on the economic performance of Chinese regions. Our research generates four key findings.
China’s Development Disconnect
