Convergence or Divergence? China's Land Rents, Transport Cost and Its Industrial Agglomeration

This paper constructs a general spatial economic model integrating land rent and transport cost according to the actualities of industrial aggregation and relocation of China. Then it uses numerical simulation to gauge the significance of the model. We found that the level of rents and wages were decisive factors in the model while the effect of transportation was in two-ways. Applying this proposition it also explains the features of industrial agglomeration and transfer in the southeast coast of China and makes some comments on the effects of industry policies and logistics.