Download Impetus-attenuated Resource City Transformation Strategy Thought—Take Handan as an Example

Impetus-attenuated Resource City Transformation Strategy
Thought—Take Handan as an Example
WANG Zhifeng, ZHAO Pengfei
School of Management Science and Engineering,
Central University of Finance and Economics, Beijing, P. R. China, 100081
Municipal government of Cixian, Handan, P. R. China, 056500
Abstract
From the 1980s to 1990s, resource cities such as Fuxin, Fushun and Daqing began to
generate resource shrinking and resource industry decline. From this period, the nation and the
government began to research and study resource city’s economic transformation problem.
Impetus-attenuated resources city has the common characteristics of resource city, and at the same time
is different from resource exhaustion city. It accounts for a large share in resource cities of our country.
Based on the research to the transformation occasion of resource city and the characteristics of
impetus-attenuated city, this thesis makes a thorough exploration to the status quo of Handan, an
impetus-attenuated resources city, and puts forward pertinent measures and suggestions for its
transformation strategy.
Key words Resource city, Impetus-attenuated resources city, Economic transformation, Strategy
Thought, Handan
1
Introduction
As the outcome of industry civilization, resource city are mainly formed in the initial period and
middle period of industrialization. The characteristics of industry in this period witnessed economic
development’s highly dependence upon the application and exploration of mine resources. Resources
have become the decisive elements and strategic basis for the economic development of a country or a
region. Under this macro economic background, a series of mine resources exploration and processing
regions developed rapidly and formed resource city gradually. Most of the resource cities in our country
are established in the industrialization in the initial period of the birth of our country. In the initial
establishment period of the nation, for economic development, the demands to mine resources increased
rapidly, thus resource cities formed in regions with rich resources. The productions of resource city are
mainly resources production and the enterprises are mainly resources enterprises. The industry is also
mainly resources industry. Thus resources have become the main sources to maintain the development
of a city, a region and the life of citizens.
In 1930s to 1940s, the earliest western resource city became to have resources exhaustion. At the
same time, various social problems such as city decline problem, employment problem, poverty problem,
environmental problem and stability problem generated, and some even caused social turbulence.
Countries were actively exploring how to solve these problems through resource city’s transformation.
At the later half of 20th century, advanced western countries took the initial to start resource city’s
economic transformation. Ruhr in Germany, Nous in French, Kyushu in Japan, and Houston in America
are representative resource cities or regions with successful transformation. From the 1980s to 1990s,
resource cities such as Fxin, Fushun and Daqing began to generate resource shrinking and resource
industry decline. From this period, the nation and the government began to research and study resource
city’s economic transformation problem. Our country now has 118 resource cities, some of them have
become resource exhaustion cities and some of them have begun to shrink. A series of speculated social
contradiction and economic and social development problems caused by resource exhaustion have
seriously endangered the ultimate interest of the people, and affect the overall development of the
national economy. Resource city transformation is pressing, more and more experts and scholars pay
more attention to this problem.
2
Resource city transformation and Impetus-attenuated Resource City
962
The so-called economic transformation of resource city refers to the application of new emerged
sustainable dominant industry to replace the recessionary dominant industry, in a bid to realize dominant
industry transformation and labor force transformation. Through system innovation, mechanism
innovation, science and technology innovation and culture innovation, promote the optimizing and
upgrading of industry structure and economic structure, perfect the comprehensive service function of
production, life and employment of the city, and promote the overall and sustainable social and
economic development of the city. The economic transformation of any resource city needs to pay
transformation cost, which includes the forming cost of sustainable dominant industry, the development
cost of the industry associated with the sustainable industry, the quitting cost of decline industry, the
treatment cost of zoology environment, as well as the construction cost of urban infrastructure. How to
decrease the transformation cost to the minimum is a difficult problem faced by every resource city, and
the startup of suitable transformation occasion is the key to lower transformation costs.
If make transformation in the industry decline period of resource city, then the industry life has
ended. The contradictions and problems of resources industry and resource city are fully exposed. The
enterprise does not have the ability to solve the existing problems and contradictions; the market has lost
its effect. The transformation must depend on the government. The government not only needs to pay
transformation cost, but also needs to bear corresponding social cost, so the passive transformation has a
high cost. If make transformation in the earlier or middle the resource industry’s mature period, the
industry is in the ascended impetus, the starting of transformation can avoid the generation of various
social problems and their damages to a large extent and reduce transformation time to the maximum.
Make transformation in the latter half of the resource industry’s mature period is also a practical choice.
At this period, the position of resource industry declines, but the industry has not been to the bad, and
still has some profits. Seize the opportunity to start transformation at this time, the city will still located
in an active position. The impetus-attenuated resources city we are studying belongs to this type. This
kind of city accounts for a large share among our nation’s resource city. The research to the
transformation of such cities has great significance to the overall active transformation of resource city
in our country.
As a special type of resource city, dominant industry of impetus-attenuated city has developed to
the crests. Though the dependent resource has not dried up yet, the whole city now can keep certain
development speed. Resource dominate industry’s position in the social and economic development
presents a descending trend, and it has presented as insufficiency of impetus in the enlargement of
employment and the increase of people’s income. Impetus-attenuated resources city has the common
characteristics of resource city, and at the same time is different from resource exhaustion city. Though
resource industry’s contribution to the city has presented a decline trend, its dominant position will keep
a certain period of time. The financial and material resources of the city are somehow sufficient, having
the ability to pay the cost of economic transformation. If the government does not design beforehand,
and actively start the transformation of such cities, and only consider the transformation after the
exhaustion of resources. The economic resuscitation will cost large transformation cost and will cause
serious social issues, as well as large political pressure. Fuxin is a telling example. Before the resource
exhaustion, both the government and the enterprise have not considered economic transformation, and
after the emergence of social problems, they began to consider transformation and the government at
that time did not have sufficient ability to start transformation. And finally, they start the transformation
under the support of central government and provincial government. Lessons drawn form others’
mistakes need our speculation. Therefore, attention should be paid to impetus-attenuated resources city.
Beforehand transformation should be conducted before the exhaustion of resources. Only in this way,
the city can rely on its own ability to realize transformation with relatively little transformation costs.
3
Impetus-attenuated resources city——Characteristics and problems of
Handan
Handan is one of the representatives of many impetus-attenuated resources city in our country.
Handan has rich mine resources, which is one of the top ten coal bases of our country and one of the
963
important ironstone production areas. Based on resources advantage and labor force comparative
advantage, Handan has formed a Resources-relied Heavy Industry city. Mining & Washing of Coal,
Mining & Processing of Ferrous Metal, Ferrous metal foundries and presses, Production & Distribution
of Electric Power & Heat Power which are based on Mineral Resource are the supporting industry of
Handan. In 2004, the Above-scale enterprise of the above four-resource industry have developed to 108,
the GDP, profits and taxes, enterprises’ employment personnel accounts for 80.4%, 92% and 53% of
scope enterprises of the city respectively. During the “10th five-year plan”, with resource industry as the
backbone, Handan’s GDP gross had doubled, the GDP annual increase speed was 12.1%, GDP per
capital broke through 1000 USD, and the GDP per capital’s annual increase is 11.3%. At the same time
of quick increase of economy and society, with the large exploration of resources, the effect of dominant
industry to city development had been gradually weakened. In the enlargement of employment, increase
of citizen’s income, the power is not enough. At the same time, the common contradiction and problems
with other resource cities generate.
3.1 Resource exhaustion
The industry of Handan is mainly coal industry and steel industry. These two resource industries are
established in the first and second five-year plans. Through long period exploration, the exploration
reserves of the majority of current mine is limited and enters into caducity and rejecting period gradually.
It had been mentioned in Handan’s 2004 Government Work Report, in the future 20 years, among the 63
state-owned mine and resource enterprises, 35 would be closed for resource exhaustion, accounting for
56% of the state-owned mines of the city. Handan’s resource industry would be faced with resource
exhaustion.
3.2 Singular industry structure
The development of Handan has long depended on resource enterprises and the adherence of
economy to natural resources in very large. Most resource industry belongs to the second industry.
Therefore, the second industry accounts for a large share in the industry structure, and present an
ascending tendency. The share of the second industry has increased from 44.1% in 1995 to 53% in 2005,
which not only deviates from the development trend of world city development, but also seriously
affects the industry upgrading and economic sustainable development. To change this unreasonable
industry structure, Handan must start economic transformation as soon as possible; otherwise the
unreasonable industry structure will be further pricked up.
3.3 Serious situations in employment
There will be totally 23,000 employees in the whole city who need to change their jobs in the
following years along with the exhaustion of resources. Because these employees are good at a single
work technique and their ability of reemployment is weak, moreover, there are increasing new
employees every year, the pressure from deployment and reemployment of these people will be very
high and the employment pressure is also high. Therefore, serious problems on society security and
stability led by these pressures will come along with.
3.4 Serious pollution of environment
The amounts of SO2 and TSP are excessive in part of Handan, and the amount of discharged
industrial SO2 increased from 9.35 billion standard cubic meters in 1991 to 1791.04 billion standard
cubic meters in 2003, having increased 180 times; the amount of discharged industrial fumes increased
from 37,336 tons in 1991 to 80,282 tons in 2003, having increased 2.5 times, so the bad air quality has
threatened the health of citizens. In addition, many geologic damages such as vacancy, subsidence, and
slump led by long-term exploration have increased. The geologic structure of Handan is of faulted zone,
so the appearance of many vacant areas and subsidence areas may lead to serious geologic damage.
3.5 The low degree of economic opening-up
Because of the influence of resource-dependent industry, the industrial system of Handan is a highly
closed resource-dependent economic system. The ratio of FDI to GDP and the degree of dependence
upon trade are two important guidelines to measure the extent of opening-up in a country or area, but the
two guidelines in Handan are lower than the average of the province. In 2003, the average ratio of FDI
to GDP of the province is 1.5 times of the Handan’s, and the average degree of dependence upon trade is
5 times of the Handan’s. In the economic transformation of modern city, an open environment, in which
964
the input of production factors such as external capital motivates the economic transformation, is
required in order to shake off resource dependence and achieve multi-development strategy. The low
opening up degree of Handan makes the transformation of the city more difficult.
According to the analysis above, although the resources of Handan are not completely exhausted, the
effect of using resource-dependent industry to motivate the development of the city is weaker and
weaker, and which has led to a series of problems and contradictions. Therefore, we should start
economic transformation before the exhaustion of resources, or a series of social and economic
problems coming along with will increase the cost of transformation.
4
The countermeasures and suggestions for the economic transformation of
Handan
4.1 Set special fund for economic transformation
In order to guarantee the successful practice of transformation and to solve the problems during the
transformation, Handan need to set special fund for economic transformation, and it will be used in the
following aspects: (1)the expense on social security of the resources-dependent enterprises, including
pension and medical fees of the retired employees, unemployment payments for laid-off workers, and
the expense on the minimum living standard security of the citizens;(2)the expense on strengthening
occupation training. The most difficult point in transformation is the change of people, but most people
in resources-dependent enterprises have low education and single technique, so they cannot find job in
other fields. Therefore, Handan needs to strengthen the occupational and technical training on
purpose;(3) the expense on continuing the social institutions set by resources-dependent enterprises such
as primary and middle schools for compulsory education, public security organs, fire control institutions,
and so on;(4) expense on supporting the regulation of environment and the construction of fundamental
facilities in resource city, in order to improve the investment environment of the city.
4.2 Promote actively the strategy of new-type industrialization
As an impetus-attenuated resources city, at the beginning of the economic transformation, Handan
should use advanced and applicable technology to reconstruct and improve the traditional industries,
choose appropriately alternative industries based on original resources-leading industries, and make
efforts to explore a new type industrializing road of high-tech, high economic profit, low resource
consumption, and low pollution of environment. Under the guide of market, use new technology to
reconstruct the traditional industry having development potentiality, focus on grasping the update and
improvement for traditional industries like energy, metallurgy, textile, electro mechanism, building
materials, and so on, and develop vigorously metropolitan type industries such as food and beverage,
clothes, tools for framing, tourism products, and so on. All the measures can take full use of the
advantage of resources, and win enough time for economic transformation, provide economic support.
4.3 Construct a city of economic and trade center in the border regions
Handan took full use of its resources endowment and comparative advantage in the past to gain the
fast development of its society and economy, but at present, just like other resource cities, coming along
with the reduction of the resources reserves, the comparative advantage is being weakened. In order to
keep the city developing long and healthily, we need to re-survey the advantage of the city, and
re-orientate the development of it. Handan is located in the border regions of four provinces: Shanxi,
Shandong, Henan, and Hebei, and There are almost the connecting area of large capital cities such as
Shijiazhuang, Jinan, Zhengzhou, and Taiyuan in the 200 kilometers area around the downtown area of
Handan, and Handan lies on the center of this area.Therefore, Handan is not only the edge of four
capital cities, but also the center of border regions, which provides a best chance for building a city of
economic and trade center in the border regions. Through the construction of an economic and trade
center in border regions, the development of tertiary industry will be promoted greatly, especially the
development of service sector and logistics sector, the industry construction of Handan will be
optimized and updated, and the rate of resource city transformation will be accelerated.
4.4 Lead the development of outward-oriented e economy actively
Opening up is what being lack of in Handan. Handan is an economically underdeveloped inland city
965
in the coastal provinces, so opening up is the necessary way for rapid development, and is also the key
act to implement the strategy of resources transformation and reduce the cost of transformation. The
introduction of large foreign capital, technology and management experience will be of benefit to
reconstruct the traditional resource type industry and promote the appearance and development of
alternative industry. Outward-oriented economy will break the original closed resource type economic
system and accelerate the rate for economic transformation and integrating international economy.
Therefore, Handan should form a good situation of planning opening-up, keeping opening-up, and
promoting opening-up, explored a good investment environment to make investors rich, to attract keep
investors, and meantime it is necessary to establish and assure the enterprises’ main body position in
market opening-up.
4.5 Exploring good transformation and development environment
Under the condition of market economy, talents, capital and projects are attracted to the places where
they can get maximum functions and benefits, so environment is the first condition of the central city
attraction. Therefore, we must form the conception that environment is the first competition point of city
economy, confirm the confidence of economic transformation, and grasp the construction of soft and
hard environments. On the one hand, the government needs to build convenient public infrastructure and
improve the hard environment of the city; on the other hand, the government also needs to change
administrative style, improve the efficiency of management, and create good soft environment. In
addition, the government needs to work out right industrial policy to promote the transformation of the
city. Try our best to make Handan a city of talents, factors, investment and living, in a bid to achieve the
economic transformation and city competition force enhancement finally.
5
Conclusion
For a long time, the home and abroad government, experts, and scholars pay more attention to the
resource-exhausted cities, but pay not enough attention to the impetus-attenuated city in which the
resources have not exhausted and resource-dependent industries still are the mainstream, but the impetus
of leading industries has been attenuated. Being different from resource-exhausted city, in
impetus-attenuated resources city, though resource industry’s contribution to the city has presented a
decline trend, its dominant position will keep a certain period of time. The financial and material
resources of the city are somehow sufficient, having the ability to pay the cost of economic
transformation, and if we grasp this moment to start transformation, the city will be placed in a positive
status. Handan is an example of impetus-attenuated city. The resource-dependent industries have
contributed a lot to the development of Handan, but with the large-scale exploration of the resources, the
resources reserves have been daily decreased, and in the development of the past several decades,
Handan, like any other resource cities, has many common contradictions and problems, for example,
resource exhaustion, singular industry structure, serious situations in employment, serious pollution of
environment, the low degree of economic opening-up. In order to avoid the high cost of transformation
after resource exhaustion and to optimize and improve industrial structure of the city, Handan needs to
establish economic transformation strategy early and fully implement economic transformation from
aspects of setting special fund for transformation, promoting actively new type industrialization strategy,
construct a city of economic and trade center in the border regions, lead the development of
outward-oriented e economy actively, exploring good transformation and development environment,
and so on.
References
[1] Amy L. Nelson, Kent P. Schwirian, Patricia M. Schwirian. Social and Economic Distress in Large Cities,
1970~1990: A Test of the Urban Crisis Thesis, Social Science Research, 1998, 27(4): 410 431.
[2] Robert J. Rogerson. Quality of Life and City Competitiveness, Urban Studies, 1999, 36(5): 969 985.
[3]Wang Qingyun. Resource City Economic Transformation Study, Beijing: China Economy Press, 2003:16. (In
Chinese)
～
966
～
[4] Zhu Deyuan. Introduction to Resource City Economic Transformation, Beijing: China Economy Press, 2005:30.
(In Chinese)
[5]Handan Municipal Statistics Bureau, Handan Municipal Statistics Yearbook, China Statistics Press, 2000-2005.
The author can be contacted from e-mail : [email protected]
967