Natural Resource Abundance And Economic Growth Of China Revisited

In the long term, researchers treated natural resources as essential part of national wealth, as well as the fuel of economic growth. Yet recent studies show that some countries with abundant resources have gone through a painful growth path so called resource curse——with lower growth rate and severer poverty. People started to rethink the role of natural resources in economic growth but not see them as welfare intuitively after check Sachs&Warner(1995) and their followers'work, also those most publicized countries' experiences like Algeria, Congo, Mexico, Nigeria.We also can find some kind of relationship between natural resources and China's economic growth. Everyone knows that the western region of China who born with rich resources have a lower growth rate than the eastern who did not have resource self-sufficiency. Therefore some scholars come to a conclusion that the resource curse hypothesis is also helpful on explaining regional difference of China's economic growth. However, we doubt about this conclusion after a thoroughly literature review. We found that some defects in these papers may mislead us to a wrong verdict and tried to resolve them in our paper.Based on a much larger data set we collected and estimated, we recheck the relationship between natural resources and regional economic growth of China. Our work started with three indicators we created to evaluate the natural resource differences among provinces, they are the Resource Abundance (RA), the Resource Dependence (RD) and the Resource Exploitation Intensity (REI). And the empirical results could be concluded as follows:Firstly, there is no evidence that China has suffered from resource curse. Most resource indicators show a positive correlation with economic growth except for land. The energy resources output per capita, which we thought is the most important and valuable indicator, presents a robust positive relationship with GDP growth rate and GDP as well.Secondly, different resources have different mechanism of action to economic growth. The Diffuse resource such as land has a negative regression coefficient with growth and point resources like energy has positive coefficient with growth.Lastly, the Crowding-out mechanisms of natural resources to economic growth do not exist in our research. We examined the relationship between energy resources output per capita with investment ratio, human capital accumulation, industry structure, proportion of private economy, openness and government expense, we found none of these intermediate variables have negative regression coefficient with energy resources output per capita. Which means the more energy output may bring us a higher growth rate through those intermediate channels.As we know, this paper is the first one who uses RA, RD and REI to examine resource curse hypothesis in China, and the indicators and data set also provides a sample for researchers who are interested in this theory.