Research On The Relationship Between Resource Abundance And Chinese Interprovincial Economic Development

Natural resources are in the first place promised rice which is thematerial basis of economic growth. However, since British scholar Autyproposed the hypothesis of Resource Curse in1993, scholars from bothChina and abroad have made a lot of theoretic and empirical researches thatshowed that natural resources and economic growth display a negativecorrelation: the abundance of natural resources inhibit the economic growth. Inaddition, phenomena of income inequality, rent-seeking corruption, destructionof ecological balance also exist in resource-abundant regions. And for sure,some scholars have also challenged the proposition of Resource Curse.Efficiency and Equality are the two value objectives pursued in economicdevelopment, economic growth and income distribution are also the hot topicsin the of economic research. Though the natural resources are relativelyabundant in western and middle China, in the long run its rate of economicgrowth is obviously lower than eastern China where the resources are poor.This shows that the hypothesis of narrow sense Resource Curse may exist.Meanwhile, the income inequality in China’s resource rich area is alsosignificant. It shows that abundant natural resources possibly have negativeeffect on income distribution. And income inequality is also considered to bean important part of the transmission mechanism. In order to study the effectsof resource endowment on the Efficiency and Equality in economicdevelopment at the provincial level, this article would firstly analyzes the relationship between resource abundance and economic growth, discusses thestimulation of resource abundance to economic growth and then would discussthe negative effects of natural resources on such positive elements as the levelof investment in the manufacturing industry, human resources input, andinstitutional quality. These are just the acting mechanisms that resourceabundance may hamper economic growth.Meanwhile, the article would also analyze the income distribution effectsof natural resource based on broader sense Resource Curse perspective. Andtake the view that resource abundance has widened the income gap for theunfair distribution of benefits from resources development, the underestimationof human capital value and the employees’ inferior position when bargain withthe employers.Through establishing Mediating Effects Model, the empirical study hasdifferentiated the direct and indirect effects of natural resource abundance oneconomic growth. By making use of panel data between1998~2010of31provinces, it has established a model that is suitable for data characteristics andconducted quantitative analysis. The empirical findings showed that naturalresources exert direct positive effects on economic growth, and indirectnegative effects on economic growth through the Dutch Disease effects,forcing out human resources input, and weakening institutional quality. And theabsolute value of the latter is larger than that of the former, so the total effect ofresources on the economic growth turns out to be negative at present. Amongthem, Dutch Disease effects and human resources input are thecommunication pathway with the strongest effects. And the empirical analysisproves that natural resource abundance truly intensifies income disparity. Wecan see that Efficiency and Equality are both absent in resource abundant area.The paper puts forward two standards to judge whether the phenomenon ofResource Curse exists: one is that natural resources exert total negative effects on economic growth, and the other is that they block equitable growth.Thus, it is believed that there exists Resource Curse in China’s provinciallevel at large. In such an era when resources are expensive, theresource-abundant region may achieve rapid economic growth by way ofshort-term income, but it should be alerted that that is made at the price of otherpositive elements.This article puts forward the viewpoint that resource abundance may notnecessarily lead to slow economic growth and income inequality. ResourceCurse is embodiment of that individual reason conflicts with collective reason,and the objective root of Resource Curse is the bad management of resourcesand resource wealth by the government. Therefore, through reasonableguidance of government policy, resource-abundant region could avoid the curseeffect of resources. At last, this article puts forward beneficial policy advice forthe economic development in resource-abundant region.