Regional capital mobility in China: 1978-2006

► We examine cross-region capital mobility in China from 1978 to 2006. ► There was a significant improvement in China's regional capital mobility over time, particularly for private capital in the more developed regions. ► The central and provincial governments appear to have promoted capital mobility through government spending, taxation and transfers in the less developed regions. ► There are considerable differences between more and less developed regions in the degree of capital market integration.