North China’s Shanxi province lies at the heart of China’s coal belt. And it’s the center of the nation’s largest pilot zone known for reforming mining areas and diversifying economic drive.
After years of economic downturn, Shanxi achieved better economic growth in 2017 thanks to its continuing supply-side reform.
Shanxi plays a leading role in cutting overcapacity in China. In 2016 and 2017, Shanxi shut down more than 40 coal mines and cut capacity by over 43 million tons, despite rising coal prices revealed by local official statistics.
In the first three quarters of this year, Shanxi’s economic growth rate recovered, reaching 7.2 percent, 0.3 percent higher than the national average. It’s the first time Shanxi outperformed the national average in three years.
Wang Yuan, deputy director of China Taiyuan Coal Transaction Center, said, “As supply-side reform deepens, a new mechanism of mid- and long-term coal trade contracts was put in place this year. It has greatly contributed to the balanced and stable growth of the coal market, ensuring the healthy development of the industry.”
The non-coal industries include new materials, clean energy, information technology, green agriculture, ecological medicine, and cultural tourism.
“The provincial government has issued many favorable policies to attract talent and also create a very favorable environment for businesses in non-coal sectors to boom,” says Professor Wei Hulin, head of the Business Administration Institute of Shanxi University of Finance and Economics.
This year has seen supply-side reform taking place across China. Shanxi’s improved economic performance has not only proved the efficacy of the reform, but also become a motivating force for the province to further promote the policy in years to come.