This study analyses the impact of rural industrialisation in China on poverty and spatial inequality at the county level between 1982 and 2000. The most positive consequence of industrialisation has been its contribution to absolute poverty reduction, especially in the coastal provinces. Much less clear is whether migration - mainly from west to east and driven by rural industrialisation - has contributed to poverty reduction in the interior. For, remittances have accrued mainly to the relatively well off rather than to the rural poor. More negatively, counties which were large exporters of labour have suffered a skill drain. However, the main adverse effect of rural industrialisation has been its exacerbation of spatial inequality, which has also resulted in a rise of inequalities in per capita gdp among China's counties.
