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Mining towns dig deep for change
2005-04-21
China Daily
For many people, Jiaozuo, an inland city in Central China's Henan Province, is still known for its coal mining.
There are many cities of this sort in the country, built almost entirely on one business, such as mining.
Now these cities are more often than not in deep trouble.
The single-minded chase for ever increasing output, as practised in the era of the planned economy, is no longer considered good economics. Former mining towns are now faced by a dilemma that city planners did not anticipate half a century ago. When their resources are close to depletion, how will local businesses diversify enough to accommodate the inevitable change in these cities' economic foundations?
But residents in Jiaozuo do not have to worry as much as others.
Jiaozuo's coal reserves have been dwindling at speed since the mid-1990s.
On the ground, however, the city has taken on a completely new look. Jiaozuo has become a tourist city, no longer dependent, as it once was, on mining and the manufacturing of mining equipment, which used to account for 90 per cent of its industrial operations.
The change was brought about only through tremendous pain. Through the 1990s, the city was struggling hard to change.
In 1999, for example, its gross domestic product (GDP) recorded a net decline of 13 per cent from the previous year, at a time when the entire nation's GDP was racing ahead at a speed unmatched by any other nation in the world.
From 1995 to 2000, Jiazuo's GDP grew only by an annual rate of 3.5 per cent, while the national average was 8 per cent.
As the manufacturers of mining equipment began to learn how to produce other machinery, the local government drew up a plan to develop the service industry. This focused on tourism and the utilization of its nearby historic relics and sites with cultural significance.
The strategy worked.
The city's revenue from tourism and related industries has grown markedly, from a less than 1 per cent of the total GDP in 2000 to 9.4 per cent in 2003.
As a result, as the share of mining in the overall industry plummeted from the previous 90 per cent to only 3.6 per cent in 2003, Jiaozuo's GDP growth was able to pick up. It registered an 11.8 per cent increase year-on-year in 2003, and 20.9 per cent last year.
For many mineral resources-dependent cities and towns across the country, what Jiaozuo has undergone is just what they have already experienced, are experiencing or will experience.
At national level, however, not all cities are like Jiaozuo.
Many with depleting mineral resources are trying desperately to work out their survival strategies.
Figures from the Ministry of Land and Resources show that 50 mining towns, out of a total of 390 in China, are faced with the loss of their resources and a total loss of 3 million jobs.
Worse still, another 440 mines are on the verge of complete shutdown because of their dwindling resources.
Dongchuan, a copper mining city in Southwest China's Yunnan Province, is one such case.
Its copper ore ran out in 2002 and unemployment immediately shot up to 34.2 per cent, excluding 40,000 unemployed farmers. Without finding alternative industries, it will be hard to bring the city of 300,000 back to life again.
According to Xiao Jincheng and Wang Qingyun, two researchers from the National Development and Reform Commission, resources-dependent cities and towns are inhabited by 154 million people.
So whether these cities can successfully find a way to sustain their economic growth after their natural resources are gone will have a huge bearing on social stability and the nation's overall development.
"Resources will be depleted one day, so resource-dependent cities have to push ahead with economic restructuring to sustain their economic growth," Xiao said.
The current woes encountered by these cities in transforming their economies are, to a large extent, the result of the planned economy. That is according to a report on how to transform mining cities, which was drafted by the Chinese Peasants and Workers Democratic Party and published in People's Daily.
In this sense, the government should foot the bill to transform these mining cities, as well as recommends the report.
It is a view that is shared by some experts.
"Part of the resources tax should be used to assist mining cities' transformation and to subsidize unemployed mining workers," said Zhou Mingliang, a researcher from the Chinese Academy of Social Sciences.
Xiao and Wang from the National Development and Reform Commission have made a similar proposal, suggesting the government set up a special fund to facilitate this transformation.
The report also calls for the government to work out preferential policies to facilitate this process.
Stagnating economic growth, high unemployment, environmental degradation and a lack of a vibrant private economy are the major woes currently faced by mining cities, according to the report.
And this is exactly what Jiaozuo experienced in early and middle 1990s.
Clearly, what Jiaozuo has done in the past 10 years shows that the successful transformation of a dying mining city is not only necessary, but also possible.
It is hoped that Jiaozuo's success will inspire other ailing mining cities in their transformation and there will be more cities following its example.
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