Is China’s western region development strategy on track? : an assessment

China’s government launched the western region development strategy in 2000 with the aim of boosting economic development in 12 provinces, municipalities and autonomous administrative regions in the western part of the country. This paper presents the results of an assessment of the progress made so far and makes suggestions for better performance in the future. We conclude that although the western region has experienced impressive rates of economic growth, regional disparities in China have continued to widen in spite of the western regional strategy. We also develop a regional growth model to determine the major drivers of regional economic growth in the western region of China. Further, the sources of regional disparities are examined using Morduch and Sicular’s (2002) regression-based decomposition approach. These models are used for suggesting a more targeted package of regional development policies for the period beyond 2010.