Bridging the Gap to Common Prosperity: Rural Development and Urban-Rural Income Disparities in Zhejiang Province, China

The Chinese government’s common prosperity policy has inspired a series of rural development initiatives aimed at reducing income disparities between urban and rural areas. Zhejiang Province was designated as the first demonstration zone in China’s pursuit of common prosperity. To explore the demonstration effect of rural development on narrowing the income gap between urban and rural areas, this study adopts the Theil index to measure urban-rural income disparity levels and explores spatial evolution patterns of the income disparity in 52 counties of Zhejiang Province, China from 2011 to 2020. The spatial Durbin model is also used to investigate the impact of rural development on the urban-rural income disparity. The results show that: 1) Urban-rural income disparities have gradually narrowed. Moreover, income disparities across the province are spatially clustered from north to south. Narrowing the gap between mountainous and non-mountainous counties is imperative for resolving these spatial imbalances in the short term. 2) Rural development reduces urban-rural income disparity levels and generates economic and technological spillover effects, as evidenced by the phenomenon where development in one county leads to reduced income disparities in neighboring counties. 3)The technological innovation enhances the co-development of rural industries through technological diffusion effects, further strengthening rural development. Finally, enhancing the ecological environment synergizes with rural development to reduce urban-rural income disparities. The research results provide policy implications for narrowing the urban-rural income disparity and promoting common prosperity.