The New Economic Geography [NEG] considers, within the context of economic development, what are known as forces of agglomeration and forces of dispersion. This thesis considers the latter has deagglomeration economies between regions. Agglomeration economies necessarily result from increasing returns to scale. However, how these arise is very much a black box. It is the contention of this thesis that agglomeration economies arise directly as a result of concentrated infrastructure investment .For example, a concentrated investment in infrastructure in the SEZ's[manufacturing] and NHTIDZ's[knowledge ] of the coastal regions of China has led to the Coastal regions prosperity and the expense of the interior regions. On the other hand, de-agglomeration economies arise from knowledge spillovers, but the NEG gives no analysis of the impact of knowledge creation. When knowledge spillovers and knowledge creation are greater in one region of a country compared to another, then the forces of de-agglomeration are stronger between a country's regions; and only serve to increase disparities in income between these regions. This effect is enhanced if the forces of agglomeration in one region of a country are greater, through enhanced infrastructure investment, than in any other region. This thesis has analysed the impact of government policy on infrastructure, knowledge spillovers; and knowledge creation on China's economic growth since 1949.The analysis has evaluated how the forces of agglomeration and de-agglomeration have impacted on China's economic development. In the light of this analysis, the fundamental reasons for the deepening disparities in income between China's regions has been laid bare, the IKSC [Infrastructure, Knowledge, Spillover, Creation] framework has been developed to evaluate a country's economic development.