Study On Resource-based Economic Transition Dilemma And Strategy Of Shanxi Province

Shanxi Province is renowned for its immerse coal resources. Under multiple influences of resource endowments, areal division of labor and policy inclination, resource departments are expanding continuously, resulting in industrial structure imbalance, along with a resource-based economic system which displays severe dependence on resource exploitation especially coal resources. Confronted with a series of problems developed within the resource-based economy, Shanxi has initiated various attempts on resource-based economic transition since 1996, concentrating on the adjustment of industrial structure, the reservation of ecological environment and so on. Shanxi was officially established as National Resource-Based Economic Transition Synthetically Reform Testing District in December 2010, leading to a comprehensive economic transition. This transition has accomplished some progresses in certain fields such as the reservation of ecological environment and the development of tourism industry, however, the overall economic situation of Shanxi Province has undergone a cliff-like drop, accompanied by low economic growth and coal resources price decline. To some degree, it means that the problem of economic overdependence on resources, particularly coal resources, hasn’t been solved fundamentally, and there are still some difficulties to overcome during the economic transition. Exploring and explaining the resource-based economic transition dilemma will help to find breakpoint of this dilemma within the proceeding of further transition, which in turn proposes specific approaches to getting out of the economic transition dilemma.The study employs a research method combining qualitative analysis with quantitative analysis and relating practical research to theoretical basis. Based on sorting and organizing existed documents on resource-based economic transition, the IV study conduct its research from the angle of current difficulties faced with Shanxi resource-based economic transition. First, in the perspective of different economic situations’ influence on resource-based economic transition, the study establishes an analysis frame of associated theories from multiple views such as the government, companies and laborers, attempting to provide a theoretical support for resource-based economic transition. Second, with reliance on the analysis frame the study discusses Shanxi resource-based economic transition dilemma thoroughly, offering practical references to seek a breakpoint for the dilemma. Third, based on the organization of Shanxi resource-based economic transition policies, with representations of the coal resource integration policy emphatically carried out in 2009, the study tries to build a time series regression equation, demonstrating an empirical analysis of policy effects in the perspective of industrial adjustment. Finally, based on theoretical analysis, current problem discussion and empirical research on policy effects, the study puts forward related suggestion on the breakthrough of resource-based economic transition dilemma.Major conclusions are as follows:First, during the process of resource-based regional economic development, when the economy is prospering and resource products market is soaring, resource-based companies, the government and laborers wish to gain higher profits, higher financial revenue and higher wages respectively, which renders resource departments to expand continuously and neglect the transition. When the economy is depressed and resource products market is shrinking, resource-based companies are constrained by capital and technology, in the meantime are expecting the resource product price will rise and the economy will recover soon, while the government and laborers are inclining to non-resource departments, which are also constrained by financial situation and skill. Thus, under the circumstance of resource-based companies showing declines or even deficit in economic benefits, resource-based region will be faced with transition dilemma.Second, Shanxi has settled on the exploration of resource-based economic transition since 1996. However, the practical situation faces difficulties. To be specific, the year from 1997 to 2000 is the period during which the transition was constrained by multiple factors as a result of low economy, while the year from 2001-2011 is the period during which resource departments expanded continuously due to coal resources “Prime Ten Years” of development. As the economy has entered the New Normal phase, resource products like coal are experiencing constant price decline, and Shanxi resource-based economy is showing signs of cliff-like drop, leading to the challenge for transition once again. The relating practical research further confirms that the price of resource products like coal will fluctuate with variation of the market trend, thus affects the resource-based economic transition. Transitional policies are not working well in the adjustment of industrial structure, the problem of industrial structure imbalance hasn’t been solved yet, so Shanxi economic transition is still in a dilemma.Third, resource-based industries like coal industry are profoundly influenced by the New Normal phase and the Resource Revolution. Such industries are in a deep adjusting period. If Shanxi is aiming at breaking the economic transition dilemma and promoting the transition further, it is unwise to be restricted only to holding high expectation on increasing price of resource products. In addition, it is recommended to seek solutions to the dilemma in terms of policy effects, including improving coal industry revenue distributing institution, promoting innovation ability, encouraging private sector’s participation, advancing non-resource industry development.