Transformation of Resource-Based Cities in China
Previous research
The resource-based cities are the cities which leading industry is the exploitation and processing of mineral, forests and other natural resources. The resource-based cities has been providing a lot of energy for the development of China, but around 2000, the depletion of resource-based cities began to arouse people's attention. And from that time, the research about resource-based cities began to increase. In previous research, the life cycle curve of resource-based cities based on the output of resource has been mentionedwidely. According to the life cycle curve of resource-based cities, the researcher divides the life cycle of the resource-based cities into growth, mature, decline stage. And consider that the depletion of resource-based cities has a correlation with resource depletion.
On the policy side, China began to explore the policy making of the resource-based cities from 2000. And the government promulgated the transformation policy of resource-based cities in 2007 which mainly aimed at resource-exhausted cities. Then, the government promulgated the transformation policy of resource-based cities that covered all resource-based cities in 2013. In the final transformation policy, the policy maker divided all resource-based cities into four categories, growth, maturity, decline and regenerate resources-based cities. The firstthree categories of resource-based cities are based on previous research, and the last one is the city which basically get rid of resource dependence. Furthermore, specific rules for different categories of resource-based cities were formulated in the final transformation policy.
The questions and demonstration method in this paper
In this paper, we try to solve the following questions.
- If the resource depletion is the basic reason for the decline of resource-based cities or not.
- Previous research focused on the fossil resources, but under the viewpoint of renewable resources, what is the relationship between resource depletion and the resource-based cities.
We will use the following methods.
- We will invert the life cycle curve of resource-based cities in previous research to get production cost cycle curve of resource-based cities. Through the relationship between the production cost cycle curve and the price mechanism, we will discuss that what influence on all kinds of resource-based cities is, when the price changes. Finally, we will also consider the case that renewable energy is developed.
- We will also give the empirical research in this paper.In perfect competitive market, a kind of resource will face competition from the same resource and other resources which have substitution effect with it. In this paper, we will analysis the two cases to make sure that which case caused the decline of resourced-based cities in China up until now.
- For the competition between same resources, we believe that the region possess lower production costs has a huge profit margin that could adjust production flexibility according to fluctuate market price. But there is not the same flexibility in the region possess higher production costs. When the market price down, the region which possess higher production costs will stop running until the marker price become higher than it 's production cost. So we can speculate that the region possess lower production costs has a higher relational degree between resource price and output than the region possess higher production cost. If this hypothesis is verified, we could believe that the competition ofthe same resources is exists. And if the region possess higher production cost has the same relational degree between resource price and output with the region possess lower production cost, we cannot consider that the competition of same resources is exists.
- For the competition of different resources, we will verify it through substitution elasticityof different resources as follows.
The substitution elasticity of the consumption shareof different resourcesin different industrial sectors
The substitution elasticityof different resources in different industrial sectors
：The total consumption of coal, oil, natural gas and electricity in industrial sectors .
：The consumption of resource in industrial sectors.
：composite resource price index.
：price index of resource .
-1is the previous period.
2.3.We will also give the case study of “Jiaozuo Phenomenon” which regarded as the successful transformation of resource-based cities in China. Through two indicators of industrial location coefficient and the average wage of employed persons by industrial sectors, we will prove that the rapid development of Jiaozuo City is not the result of successful transformation, but has a strong correlation with the output of coal. Finally, we will find that market demand has a strong correlation with the decline of cities, rather than resource depletion.
The conclusions
- Resource depletion is not the main reason for the decline of resource-based cities. The main reason is the competition of resources. At the present stage, the competition of resources in China is mainly reflected in the competition of same resources. Especially in the competition of coals, which produced by different areas (figure1-5). But the competition of different resources is not obvious (figure6-7).
- The development of renewable energy will cut down the conditions of resource-based cities to exit the resource market. Thus the standard life cycle of resource-based cities in previous researchthat have growth, maturity, decline stages will be changed. Especially in decline stage.
Policy suggestion
- Resource-based cities must reduce production cost in order to obtain a competitive advantage. Therefore, economies of scale and intensive utilization of resource development should be realized, through guide and support the accumulation of all kinds of production factors. And Encourage medium and small-sized mining companies that possess higher production cost to merge and reorganize.
- Improve resource pricing mechanism. Under the planned economic system, the resource price cannot get a reasonable response through the market system. As the result, the resource-based cities did not get the corresponding development funds to develop the advanced industry through the exploitation of resource. So after the resource exhaustion, the resource-based cities declined due to lack of continuous industry. For that reason, improve resource pricing mechanism allows the resource-based cities get more development funds to support the development of the city.
- Promote the development of renewable energy. As we have mentioned in policy suggestion2, the resource pricing mechanism should be improved, but from the current energy consumption structure in China, that will lead to a higher coal price, finally, that will lead to a higher consumer price. It is a very important reason that why Chinese government intervened the coal price several times so far. Therefore, through promoting the development of renewable energy, the current energy consumption structure in China can be optimized, and the coal demand can be relieved, the coal price can be stabled.
- Now that from a long-term perspective, the development of the renewable will bring influence on resource-based cities, so we should establish new transformation model based on renewable energy. The goal of existing policy is to realize the sustainable development of resource-based cities, but it ignores an important part of the urban development, the sustainable energy supply. Without a sustainable energy supply system, the existing policy just can achieve the goal that transform the resource-based cities from resource-output to resource-dependence, obviously this is not a sustainable development, also cannot fundamentally solve the current environmental problems in China, which brought by large consumption of fossil energy. Therefore, we must pay attention to the sustainable energy supply in policy making, and establish a new transformation model of resource-based cities, which based on renewable energy.
Innovation and Inadequate points
- In this paper, the life cycle of resource-based cities in previous research is developed from static process to dynamic process. In the dynamic process, the resource-based cities will not strictly follow the growth, maturity and decline stage.
- In this paper, through introducing the viewpoint of renewable energy, we are trying to change the current transformation model of resource-based cities, which achieved by industrial upgrading without considering the sustainable supply of energy. Essentially, the current transformation model transformed the resource-based cities from resource-output to resource-dependence, however, the progress of industrial structure and Scio-economic will lead to more energy consumption. Without considering the sustainable supply of energy, the growth energy consumption will shift to the new resources-based cities. On the whole, the resource-based cities still exist. And therefore, it seems to me that the current transformation model is not a sustainable model.
- As the Inadequate point, the definition of fossil resources in this paper mainly refer to the fossil resources thatare used to provide energy. Actually, the consumption of the fossil resources that are used as raw material cannot be ignored. Meanwhile, the fossil resources that are used as raw material and the renewable energy cannot be replaced by each other. But in this paper, because of data unavailable, we did not consider this point in our analyses.
Figure 1-5. The result that shows the region possess lower production costs has a higher relational degree between resource price and output than the region possess higher production cost.
Figure 1-2. The relational degree of the region possess lower production costs
Figure 3-5. The relational degree of the region possess higher production costs
Figure 6.The substitution elasticity of the consumption share of different resources in different industrial sectors
Figure7. The substitution elasticity of different resources in different industrial sectors