4. 2.

4  Natural Resources

Overall, China is a land-scarce and labor-abundant economy. With 18.7% of the

world’s population, China occupies only 7% of the world’s land area. China’s

share of world mineral wealth is roughly proportional to its share of land area, so

per cap- ita mineral reserves are typically half of world averages or less. Even

reserves of coal, which China mines and burns in abundance, amount to only 11%

of total veri- fied world reserves. China was the eighth-largest extractor of

petroleum in 2016, but proven reserves of petroleum and natural gas amount to

only 2.1% and 2.8% of the respective world totals. China may be able to develop

its abundant shale gas deposits, but it is not yet clear whether complex geologic

structures can be econom- ically exploited. There are, however, rich deposits of no

nferrous minerals, such as tin and copper and especially tungsten and rare earth.

The distribution of mineral and energy resources in China is extremely uneven.

Fossil fuels are predominantly in the north, which has 90% of the oil and 80% of

the coal reserves. Hydroelectric potential is substantial where there is water (the

South) and relief (the West): 68% of the hydropower potential is in the Southwest

macroregion. The rapidly growing southern coastal regions have virtually no

energy resources. Geographic constraints, therefore, foreclose resource-based and

land- intensive development strategies; China must develop along a labor-

 intensive and, ultimately, knowledge-intensive path. Moreover, unforgiving

environmental constraints will make economic trade-offs more difficult and

complex for the fore- seeable future.

5. 2.5  The Built Landscape

Geography provides a baseline, describing the spatial conditions and resources

that give a structure to what is possible and a form to economic activity. However,

geographic conditions are not fixed and immutable; human activity is constantly

reshaping geographic possibility. Even in premodern China, a significant part of

the geography was “man-made.” The rich landscape of the Lower Yangtze is the

prod- uct of many years spent draining swampland and fertilizing new fields, and

the strik- ing terraced hills and irrigation networks of upland southern China are

also the outcome of centuries of hard work. A modern economy has a much larger

capacity

36 Legacies and Setting

to reshape landscapes, and modern economic growth constantly creates new pat- terns of

habitation and transportation. This is particularly true in China given the extraordinarily

large investments that have accompanied rapid economic growth (see chapter 7), which
has accelerated the pace at which landscapes are being re- constructed. The rapid build-

out of modern infrastructure in China is changing the meaning of space and the impact of

geographic conditions. China is becoming much “smaller”: areas that were remote 20

years ago are now accessible to tourists, mer- chants, and government functionaries, and

local people in those areas find it much easier to get out, migrate, or travel for business or

experience.

Internationally, China was relatively isolated during the Mao years, but during the first

years of reform and opening, a massive infrastructure effort was directed par- ticularly

toward reestablishing links with ocean-borne trade networks. Today, China is by many

measures the most connected country in the world. It has 6 of the world’s 10 busiest ports

(Shanghai is the largest). The United Nations computes a Liner Ship- ping Connectivity

Index based on shipping lines, capacities, and volumes; the 2015 edition assigned China

by far the highest value, 167, compared with next-best Sin- gapore at 117 and the United

States, the United Kingdom, and the Netherlands in the 95–98 range. The reintegration of

maritime China and the success of China’s export drive would have been impossible

without this massive investment effort.

Since 2000, the focus of infrastructure construction has shifted to domestic land transport.

China has now built a national expressway network that is the world’s largest, at 123,500

kilometers, compared with 76,000 kilometers in the United States. Since 2004, China has

added 8,000 kilometers of expressway every year. Interregional car travel is now feasible,

while traffic fatalities have dropped in half, notwithstanding the explosion in private
vehicles. A new wave of transformation is occurring with the advent of high-speed rail. A

nationwide grid of four north- south and four east-west main lines is planned for 2020,

and about half of this grid was operational in 2015, shrinking the time required to get

from Beijing to Shang- hai, for example, to under six hours (figure 2.5). Like the rest of

the world, China is getting wired: 1.27 billion mobile phone subscribers (more than one

for every adult), and 577 million broadband Internet connections were in use at the end of

2015. It is clear that these changes in infrastructure will have significant ramifications for

nearly every aspect of economic growth.

Moreover, the impact of these dramatic changes in communication and mobility is still

just beginning to be felt. China has consistently followed a strategy of building out

infrastructure ahead of demand. As a result, in some cases, infrastructure invest- ments

have been overly hasty and poorly planned, leading to low utilization rates and poor

efficiency. Logistics within China are still relatively expensive, the result of rugged

terrain, less efficient infrastructure, and administrative delays. However, thus far, the

economy has steadily grown into the infrastructure created. As the cost

37 The Geographic Setting

Figure 2.5

Urumqi

Harbin Changchun

Shenyang Beijing

Shijiazhuang

Taiyuan
Jinan
Xining Lanzhou

Zhengzhou

Changdu

Chongqing Changsha

Guiyang Kunming

Nanning

High speed rail network (operational July 2017).

Source: Xi’an Marco Polo International Travel Service. Accessed at https://www.travelchinaguide.com

/images/map/train/high-speed-railway.jpg.

of land transport declines, it will change urbanization patterns, create new linkages that

blur boundaries among macroregions, and facilitate the redistribution of eco- nomic

activity across the expanse of China.

2.6 Changing Regional Dynamics

For almost 30 years after the beginning of China’s market transition, economic growth

was more rapid in the coastal provinces than in inland provinces. At first, this reflected

catch-up growth on the part of the coastal regions: the development strategy under the

planned economy had neglected the coastal provinces, which entered the reform era

significantly underperforming their obvious potential. However, the economic

transformation went far beyond this. The Chinese govern- ment extended preferential

policies to coastal regions and poured resources into

Xi’an

Nanjing
Hefei Hangzhou
Shanghai

Nanchang Fuzhou

Guangzhou Haikou

Wuhan

38 Legacies and Setting

the infrastructure necessary to link maritime China to world markets. Moreover, as

restrictions on population movement were gradually relaxed, a steady and growing

stream of migrants came to the coastal provinces. The result was that China’s econ- omy

tilted to the coast. The nine coastal provinces that participated fully in the explosive
development of China’s external economy—Beijing and Tianjin down through

Guangdong—produced 43% of China’s GDP in 1978 and increased their share to 55% by

2006. By that time, all the highest per capita GDP provinces were on the coast, and the

coast-inland gap had become one of the most widely remarked features of the Chinese

economy.

A few years into the twenty-first century, the tilt toward the coastal regions stopped and

gradually went into reverse. Growth in the coastal provinces slowed, and by 2015, the