Regional economic resilience of resource‐based cities and influential factors during economic crises in China

Abstract

Resource‐based cities (RBCs) whose economies depend primarily on exploiting and processing natural resources usually have rigid, singular, and low‐end industrial structures, which often cripples their ability to cope with external disturbances such as international resource price fluctuations and economic downturns. This paper quantitatively analyzes the economic resilience of RBCs in China in terms of resistance and recoverability during the Asian financial crisis and the global financial crisis. Furthermore, it identifies the main factors affecting resilience. There are four main findings: First, RBCs were quickly and negatively impacted by the Asian financial crisis, which suggests that economic resistance was generally low during this period. In the recovery period, while the rate of recovery was slow at the beginning, economic recoverability improved after 2002. Economic resistance and recoverability were found to have a strong negative correlation. Second, at the beginning of the global financial crisis, the economic resistance of RBCs was generally high. However, after 2012, the number of cities that were severely affected by the economic crisis increased rapidly. Third, economic resistance varied across different types of RBCs. Coal‐based and forestry‐based cities had lower economic resistance, while oil & gas‐based cities were more resistant. RBCs in the Eastern region generally had low economic resistance, while the economic resilience of recessionary cities was also low. Finally, while factors affecting the economic resilience varied across the two economic cycles, we found that economic development, labor conditions and, most of all, the industrial structure had a statistically significant negative effect on economic resilience.

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“…On the one hand, the region's featured economic structure deserves regional resilience research in new crisis contexts ( Hu & Yang, 2019 ; Tan et al, 2020a ). It is evident that the region's economy was less sensitive to the 2008 financial crisis ( Tan et al, 2020b ) due to its long-term domination of state-owned enterprises characterized by inward-looking national supply chains and markets. Despite higher resistance, the structurally weak (over-specialization on mature heavy manufacturing and resource mining) economy has led to a weak recoverability and dynamism ( Li et al, 2019 ; Tan et al, 2017 ).…”

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“…Stability refers to the ability of the system to maintain its original state when responding to environmental disturbances. Elasticity refers to the system's response to disturbances through the system's own structure to absorb disturbances and ensure no fundamental change of system functions (Guan et al, 2018;Li et al, 2020;Tan et al, 2020). Generally speaking, adaptability is negatively correlated with sensitivity, but positively correlated with stability and elasticity.…”

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“…Simmie et al found that regional innovation systems policies can contribute to their economic resilience [ 24 ]. Tan J. found that economic development, labor conditions, and the industrial structure had a statistically significant negative effect on economic resilience [ 25 ]. Liu et al pointed out that there are significant differences in economic resilience revealed by multi-dimensional indicators [ 26 ].…”