Regional GDP per capita disparities between the coastal and interior provinces of China seemto be a bugaboo the Chinese government cannot get rid of. This paper shows that there areagglomerative forces within China which emerge from the unbalanced growth strategy andlead to a considerably west to east migration of workers. Instead of reducing the disparities, migration actually worsens the problem. The knowledge that an agglomerative process takes place should have a decisive impact on regional policy. Therefore we examine whether thepolicy measures taken within the last years were appropriate to reduce regional inequitywithin China. We show that in the case of agglomerative forces the hukou system can reduce disparities while a reduction of trade costs between the interior and the coastal provinces leads to more inequity.