| Abstract | China’s regional economic showed the feature of "convergence within the club, divergence between the clubs", a valid economic theory must explains the convergence and divergence between regions simultaneously. We find that China 's regional trade showed a typical " club cooperation" feature, namely the smaller the economic gap between areas , the lower the degree of market segmentation, and vice versa yes. Through mining "club cooperation" mechanism, this paper explains the characteristics that regional economic convergence and divergence coexist in China . On this basis , using China’s (1985-2010) provincial panel data and simultaneous equations to overcome the endogenous problems, we found that regional disparities exacerbated the degree of market segmentation between regions, and, in turn, the market segmentation exacerbated regional disparities . This finding suggests that the economic growth have endogenous effects of cumulative causation, too large regional disparities may make China into a situation of "one China, many worlds" . Therefore, from a global perspective, the central government must be selecting the right fulcrum and appropriate balance policies, give full play to "leverage effect" of regional economic cooperation , leveraging large balance, natural style balance through the small balance, policy-based balance, to promote regional economic growth into the "virtuous cycle" track. |