Towards inclusive urban development? New knowledge/creative economy and wage inequality in major Chinese cities

Capitalist economic development and urbanization in recent decades has seen the rise of a knowledge-based economy and a widening income gap. Attempts to pursue a creativity-led urban development strategy amidst the ascent of a knowledge-based economy have led to the popularity of inclusive growth urban and regional policies. However, policy acceptance of the concept of inclusive growth and its cognate variations appears to have run ahead of serious empirical substantiation of a growth-inclusion nexus. This paper contributes to the emerging literature on inclusive growth and urbanization through an investigation of the patterns and determinants of industry-based wage inequality across 35 major cities in China during the period of 2003–2013. The empirical analysis identifies a distinctive process of simultaneous tertiarization and industrialization that contributed to the rise of wage inequalities in Chinese cities. It also reveals the significant role played by the Chinese state as enterprise owner, public employment provider, and social welfare supplier, in ameliorating income inequality in urban China. Our analysis draws attention to the contextualized nature of urban economic growth in order to understand its implications for inequality/inclusiveness. Copyright © 2019 Elsevier Ltd. All rights reserved.