The Effects Of Non-Renewable Resources Abundance On Regional Economic Growth

Since the mid-twentieth century, more and more countries or regions rich in natural resources have tended to grow slower than those relatively poor in natural resources.This surprising phenomenon attracts much attention in academics and is called "resources curse" in economics, which means abundant natural resources hinder economic growth.From the domestic situation, non-renewable resources of our country is distributed much uneven, the central and western regions are rich in resources, reversely, most eastern coastal regions are lack of resources. However, the reality of economic development is conversely. That is, the central and western regions with their abundant resources have poorer economic performance than those eastern coastal regions lack of resources. For example, economic growth rate of Shanxi, Sichuan, Heilongjiang, Liaoning rich in resources is far slower than that of Zhejiang, Fujian, Guangdong and such provinces poor in resources.International academic research and the reality of our country lead the author to study how does non-renewable resource abundance effect regional economic growth in the "resources curse" hypothesis of theoretical framework. By using the method of economics, statistics and econometrics in an integrated manner, this research draws the following conclusions:Firstly, despite the non-renewable resources plays an irreplaceable support role for China’s economic growth, the "resource curse" phenomenon really exists in our inter-provincial level. Through establishing econometric model by using China’s inter-provincial panel data of our resources boom years from1997to2006to study the relationship between the abundant non-renewable resources and economic growth,we found that the relationship between the abundant non-renewable resources and economic growth remained negatively despite controlling other variables affect economic growth. This shows that abundant non-renewable resources can easily lead resource-based regions’ economic growth to be into a path-dependence. And over-reliance on resources will lead resource-based regions’economic growth to be slow or stagnant.Secondly, Compared with other countries of the world, the reason for the formation of the "resource curse" in resource-based regions of our country has its own characteristics. The impact of the early "dual track" price policies, the imperfections of the resource interests’allocation mechanism,the differences of the geographic conditions are the main reasons caused resources-based regions’economic growth rates to be lagged more far behind than those of other regions.Thirdly, empirical analysis shows that non-renewable resources abundance has very significant negative effects on capital investment, education level, market-oriented, R&D investment and institutional quality. Inhibiting the developments of the manufacturing and other technical services sectors, flight of domestic capital caused by the neglect of human capital because of the worsening investment environment, the neglect of nurturing human capital and supporting of technological innovation are channels how abundant non-renewable resources to restrict the resource-based regions’economic growth, the single industrial structure of the resources and irrational system of property rights arrangements are key causes of these problems.Fourthly, to break the "curse" and achieve rapid economic development for resource-based regions, they should start with solving the problems of resources revenues distribution, changing resource advantages into capital advantage, to provide funds for economic development. Followed by the scientific and rational use of resources income, they should increase investments in construction of infrastructure, nurturing human capital and promoting technological innovation, to create a favorable external environment for region’s economic development; finally, they should change the traditional single type of industrial structure, improve the extension and expansion of industrial chain, construct a complex industrial structure, develop market-oriented deep-processing industries and establish an open multi-level division of labor system, thereby resource-based regions can achieve their leapfrog economic development.