INTERPROVINCIAL MIGRATION IN CHINA: THE EFFECTS OF INVESTMENT, MIGRANT NETWORKS AND THE “GO WEST” POLICY by

Since the late 1980s, the Chinese government has gradually eased restrictions to internal migration. This easing, along with rapid growth of the Chinese economy, substantial increases in foreign and domestic investments, and policies encouraging development in the Western provinces, have greatly stimulated internal migration. Earlier studies have established that since the 1980s, migration patterns have been responsive to spatial differences in labor markets in China, particularly during the 1990s. However, other important economic determinants of interprovincial migration flows have not yet been examined. These include migrant networks, foreign direct and domestic fixed asset investments, and government policies designed to encourage Westward migration. We estimate an economic model of interprovincial migration in China that includes as explanatory variables regional economic conditions, human capital, domestic and foreign investments, amenities and migrant networks, using province-level data from the National Census and China Statistical Press for the 1980s and 1990s. To account for possible two-way causality between investment and migration and between the two forms of investment, we also report 3SLS estimates. Among key results, we find strong evidence that migration is influenced by the size of the pre-existing migrant community, investments and spatial differences in economic conditions. However, we find no evidence that the “Go West” policy influenced migration patterns in the late 1990s.