Chapter 65. Spatial Distribution of Economic Activities in Japan and China

In this chapter we look at the spatial distribution of economic activities in China and Japan. Japan has excellent data and relatively uniform institutions since World War II, which allow us to track its spatial evolution and detail its key features today. For Japan we show how structural shifts in the national economy involved major transformations of the regional structure of economic activity. We address a central policy issue, the high extent of urban agglomeration in Tokyo. Then we turn to the details of the spatial distribution of industrial activity across cities, to see what general patterns hold and what they imply for our understanding of the role of different cities in the urban hierarchy. For China the approach is different. With the radical institutional changes since 1978 moving China away from being a planned economy, there is little consistency in data definitions and coverage over time and less detailed data are available. We focus on the last decade and on policy issues. We observe that Chinese cities tend to be over-capitalized and undersized, with strong spatial biases to policies, concerning migration, capital allocations, infrastructure allocations and location of FDI.