The paper tries to analyze China’s regional disparity in a framework of convergence in neoclassical
theory of growth. We employ comparative productivity of agricultural labor as an index of labor
market distortion to see the impact of difference of labor market maturity among regions on regional
growth performance, controlling for a set of variables determining growth rate. The finding is that (1)
there is an evidence of conditional convergence in China’s growth, namely, per capita GDP in the
initiative year is negatively related to growth rates in following years, (2) labor market distortion
negatively impacts regional growth rates, and (3) many other variables used at previous studies impact
growth performance, as is expected by neoclassical theory of growth. D 2002 Elsevier Science Inc. All
rights reserved.