Anyone may correct me if I am wrong. In regards of the ‘Alfred Marshall’s footnote’ (see note 35 & 36 in part 6), the concept is that regional government can charge different ‘land prices’ in order to compete with one another. Less attractive regions even offer ‘negative price’ to absorb investment.
I agree that regional competition is important to China’s growth. In fact, we may look at China, instead of a single country, as an union of regions that compete with one another. The EU model may help us to understand situation a bit more. Let’s see how Professor Cheung further develops the idea.
Wallace S.T. Chan