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AbstractThis article investigates the dynamic relationship between economic development and the identification of ethnic minorities and argues that identification ofChina's ethnic minorities manifests itself at various levels. At the national level, the introduction of market mechanisms and economic growth initiatives have been concentrated predominantly in the coastal areas and metropolises, and are thus increasingly distant from ethnic minorities, a disproportionate majority of which reside in the western parts of the country. This growing regional disparity has placed ethnic regions and populations in a distinctly unfavourable position in terms of economic engagement and development. Regional development in the ethnic‐minority homelands has been characterized by the representation and reinvention of ethnic cultural traditions and the production of cultural economies. Unequal economic growth has resulted in a massive migration of ethnic minorities to the cities. Simultaneously, urban development has reinforced ethnic identity, particularly through urban labour‐market development. Urban and regional development has, in turn, led to the production, activation and magnification of ethnic identity at individual and group levels.

China's market transition has become a powerful integrative force, increasing social and economic interaction between the Han Chinese and ethnic minorities, by drawing various ethnic migrant workers into the urban labor market. In this article, we explore the ethnic dimension of migration and labor market dynamics, and compare wage earnings between ethnic minority and Han migrant workers in Kaili City in the Guizhou Province of China. The finding suggests that the labor market transition has increasingly put ethnic migrant workers at a disadvantage in the urban labor market in terms of wage earnings. With the economic restructuring from the 1990s to recent years, the earning gap between ethnic minority and Han migrant workers has widened. The study finds that the labor market experiences and outcomes of ethnic minority and Han migrant workers are quite similar.