Research On Economic Transition Of Resource-based Cities In China

Resource-based cities （resource-based regions）are some cities whose leadingindustry based on mining, forest harvesting, or their and other processing. Over theyears, as the basis of energy and important raw materials suppliers, resource-basedcities have made a great contribution to China’s economic and social development.However, due to some factors as the depletion of natural resources, alternativesincreased, and environmental&ecological damage, those resource-based cities’sustainable development are facing severe challenges. Their economic transition can’tbe avoided. In order to guide and promote the transformation of resources cities, theState Council had issued the Act of "State Council’s some advice on thoseresource-based cities’ sustainable development [Guo（2007）38]" in the second half of2007. The act had clearly set goals that "to significantly enhance most of theresource-based cities’ sustainable economic and social development capacity before2010" and "to bring those resource-based cities into economic and social into asustainable development track before2015".However, due to "significant economic, institutional and social sunk costs"（Song Donglin,2006）, transformation of resource-based cities are facing enormousinstitutional and mechanism barriers. On the one hand, China needs to consume largeamounts of natural resources in order to achieve rapid economic development. On theother hand, in order to protect those other regions and industries getting enough cheapraw materials and energy, Chinese government had put strict supervision andintervention on oil, coal and other resource products prices. A large some of benefitshad been transferred from resource-based cities, which had been belonged to theresource-based cities. Under the pressure of state financial, the proposed resourcemining compensation and declining industries assistance mechanisms can not fullymeet the need for transformation of resource-based cities. The most critical is that theso-called "resource mining compensation and declining industry assistance" is onlythe external aid. Under the conditions of "function lock, lock cognitive and politicallock (Grabher,1993)", successful transformation of resource-based cities can be getonly by spontaneous endogenous accumulation and efforts.In this context, it is of great significance to study on the resource-based cities’ economic transition. Theoretically, to explore the nature of those resource-basedcities’ economic transition, summarize and discover the power of transformation, toestablish a scientific evaluation index system about transition is making contributionsto economic theory of development with Chinese characteristics and transition theoryof resource-based economic. From the practice, China is in a critical period of laterindustrialization and economic transition. It is of important practical significance tomake some advice about Chinese resource-based cities’ economic transition, which isto help transformation of economic development, regional coordination andsustainable development.First, the paper had studied the nature of the resource-based cities and theirtransformation using the literature research and survey methods. The paper concludedthat the resource-based cities’ most basic feature was that their industrial structure hadbeen heavily dependent on natural resource. The amount of resource mining is theireconomic stability and prosperity’s necessary but not sufficient condition. The essenceof the transformation of resource-based cities is that the city pillar industries gettingrid of the stock of natural resources bound, and its fundamental purpose is to achievecities’ sustainable development.Secondly, the paper had examined the economic and social characteristics of theresource-based cities, using the research and survey research methods, and alsoexplored the power mechanism of transition utilizing empirical methods. The resultsshow that those resource-based cities’ development are facing serious difficulties,economic restructuring is imminent. Factors of urban growth, its own capital, FDI,knowledge and technology stock has a significant positive impact. Among them, thecapital is the most positive factor.1%investment in fixed assets would generate anadditional GDP growth of0.42percent. Increasing FDI can bring0.04spillovereffects for cities’ economic growth. The growth of the number of employees is in anegative impact on GDP growth. Labor redundancy is an important negative factor inconstraining economic growth. Knowledge and technological innovation has obviouspositive effect on the growth of urban economic. Especially in the ferrous metallurgycity, knowledge and technological innovation variable’ coefficient is of0.30, the oilcity reached0.12. Emerging elements are providing a strong impetus for the growth ofresource-based cities. Third, the thesis had analyzed those difficulties of the transformation ofresource-based cities using literature, comparative studies and research methods. Theprevalence of sunk costs had formed the basic obstacles on business investmentincentives (to enter) and disinvestment (exit). Belonging to local governments’financial restrict, due to higher depreciation of fixed capital, those cities’ netinvestment may even be negative. Those seriously restrict the cities’ economictransition. The weakness in innovation, difficulty in technology diffusion, theinhibition of spillover effect, the technological innovation’s ability of drivingeconomic growth had been weakened. The lock of human resource structure, thePsychosocial characteristics of pursuing stability had made those resource-basedcities’ transformation are facing the constraints of lack of human capital.Forth, the paper had studied some successful experience from foreignresource-based cities, in order to provide some experience to domestic cities with usesof literature research methods.Fifth, on the basis of previous studies, the paper proposed China’s resource-basedcities’ transformation goal, principles, and path selection. The paper concluded thatcities’ economic restructuring is not completely to abandon the old industrial base butto deepen and widen them. Only by this, can those resource-based cities make playtheir comparative advantages and get transition’s success.Finally, the paper had design of a scientific evaluation system for resource-basedcities’ transformation. The evaluation system might help government departments geta baton and an assess criteria with which to guide transformation. The paper had madean empirical research on the transformation of China’s important oil city, Daqing，provided a reference for other cities in transformation.