Dying Chinese towns - economic restructuring in action

The UK has been through the pain of resource based contraction after the closure of UK coal mining and steel making with the loss of hundreds of thousands of jobs and the economic decimation of local villages and towns. The the same experience is beginning to come to China despite the current economic boom.

For the UK is marked the transition from a manufacturing to a service based economy. However, this transition took 100 years - China appears to be on a fast track to .....who knows where?

In China, political unrest is only one crisis away (see previous stockmarket post).

FEATURE - Dying China Oil Town A Warning To Beijing [PlanetArk]

Dying towns are rare in booming China, but the expanses of rubble and abandoned homes that ring the once-wealthy oil centre of Yumen mark it out as one of them.

And though it is home to just a few thousand people, in a nation of over 1.3 billion, Beijing's stability obsessed bureaucrats are fretting about their fate.

They worry because Yumen's poor, disgruntled inhabitants are the thin end of a wedge of discontent that could engulf hundreds of thousands of people within a decade unless the central government can tackle one of the more obscure but troubling legacies of past socialist policies.

The potential troublemakers live in dozens of "resource towns" scattered across China, which were built by Mao-era economic planners to exploit energy or mineral deposits regardless of how remote or inhospitable the location.

Now some seams of oil, coal and ores are starting to run out, pushing up unemployment and migration while leaving behind shells of towns that are impoverished tinderboxes of unrest.

These towns like Yumen should never have existing and are a result of central planning gone mad. However, the human misery tales are all too real.

"I can't eat well, I can't buy clothes, I can't even think of travelling or having fun. All I can do is try to slowly pass my days," said a laid-off worker who gave only his surname, Quan.

"We have all been out to protest."

The article goes to to point out the link with the UK and US:

Resource towns everywhere shrivel up or suffer when their key source of income fades. Texas is dotted with ghost towns and industrial centres of northern England struggled for decades after coal and heavy industry slipped into decline.

Perhaps most damning of all is the lack of progress in the attitudes of officials. In the face of such obvious economic hardship we get the following:

Officials declined repeated requests for statistics on budgets, population, and the economy of the new town, and trailed a journalist who tried to interview residents of new Yumen.

And the provincial government seems equally oblivious to Beijing's concerns about unrest, poverty and marginalisation.

Asked about the impact of the move, Gansu provincial governor Yu Shoucheng said: "Today's Yumen is glowing and in its prime."

The problem is that whilst the government can keep a firm lid on the changes in economic circumstances and the protests it throws up it is simply building up the pressure so that when it blows the result will be all the more catastrophic.

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