This paper considers the determinants of economic growth of the cities of Jiangsu Province, China, adopting a Kaldorian approach. It is found that there is a close correlation between the growth of non-industry and industry (Kaldorโs first law) that provides indirect evidence for the export-base theory. The paper discusses two competing explanations of the foundations of the Verdoorn law (Kaldorโs second law), which, in its simplest form, is the relationship between industrial productivity and output growth. It also considers the static-dynamic Verdoorn law paradox. This arises from the fact that estimating the Verdoorn law in log-levels often gives statistically insignificant estimates of the Verdoorn coefficient while the use of growth rates gives significant values of around one half. The results in this paper show that this does not occur when data for the cities is used. A plausible explanation for the paradox is that it results from spatial aggregation bias. It is also found that inter-province urban productivity disparities first increase, but subsequently decrease over the period considered
