China's cellular economy: A test of the fragmentation hypothesis

Using recent data pertaining to transportation performance, this paper tests the hypothesis that China's economic growth since the mid-1950s has been characterized by a tendency toward local self-sufficiency. Growth of freight transportation in China is compared with the growth of freight transportation in other large countries, with the growth of aggregate output in value terms, and (by commodity) with the growth of output in physical terms. The results are consistent with the fragmentation hypothesis. Fragmentation in China appears to be associated with the manner in which the economy is partitioned for planning purposes.