Located in northeast China's Liaoning Province, Fuxin was once prosperous because of its coal industry, with an aggregate output of 700 million tons. But as the coal reserves depleted, the city's GDP growth once dropped to 2 percent in the years around 2000, in a striking contrast to its previous peak of 20 percent. Its unemployed population amounted to nearly half of the city's total employees. In 2001, the State Council set Fuxin, a resource-exhausted city, as a pilot for transformation. Fuxin had a developed hydraulic industry in the 1960s and was once home to China's first hydraulic component factory. The city, therefore, identified the hydraulic industry as an alternative industry after coal resources were exhausted.

Following over 10 years of experiments, Fuxin has solved problems involving people's livelihood and, more importantly, expanded its hydraulic equipment manufacturing industry. By 2012, there had been 970 enterprises producing hydraulic equipment, and many laid-off workers from the coal industry found jobs in the new industry.

Du said the transformation of Fuxin has made progress, but has not yet been completed. If successfully transformed, it will be listed as a regenerative city.

Ruhr is a model of successful transformation. Once a city of steel and coal, Ruhr made great contributions to Germany's recovery after World War II. But since the 1960s and 1970s, the heavy industry in Ruhr supported by steel and coal industries began to decline, with a large number of shuttered mines and steel mills, laid-off workers and worsening public security.

From 1966 to 1971, Germany spent more than 15 billion Deutsche marks on reinvigorating Ruhr, and later increased the investment and formulated a plan to revive the city. Decades later, Ruhr has regained vitality and become a university town and a cultural center. The service industry now contributes 70 percent to its GDP.

According to Du, after Fuxin, the NDRC, the Ministry of Land and Resources and Ministry of Finance listed another 60 resource-exhausted cities as pilot cases and granted specific support. The NDRC established a special program on supporting alternative industries in these cities and allocated 2.1 billion yuan ($342.58 million), stimulating 30 billion yuan ($4.89 billion) in investment from other sources. This has greatly promoted the development of diversified industrial structures in resource-dependent cities.

Assessment mechanisms

Du said China will no longer use GDP as an indicator to assess economic development in resource-dependent cities, with the aim of guiding them to focus on ecological and environmental protection and sustainable development instead of blindly chasing foreign investment and excessively exploiting local resources.

The NDRC is formulating a mechanism for pricing of resources that can fully reflect the supply and demand as well as the scarcity of the resources. The core issue is to further advance reform of the resource tax.

The NDRC is also formulating a compensation mechanism for the ecological system, under which those who exploit resources and benefit from the development should be responsible for compensating for and restoring the environmental degradation.

"After these mechanisms are established, the problem of sole pursuit of GDP growth by the resource-dependent cities can be solved to some extent," said Du.

Xu Hongcai, Director of the Budget Department of the Ministry of Finance, said the ministry has a whole set of criteria for assessing the achievements of resource-exhausted cities, including unified requirements for all resource-dependent cities and some specific requirements for different cities of particular resource types such as coal, metal, oil and gas as well as forestry.

The ministry will also assess the proportion of resource extraction industry in a city's total GDP. "The more the proportion drops, the better the achievements the city has made," Xu said.

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Resouce-Based Cities

Total Number: 262

Categories: Growing (31), maturing (141), declining (67), regenerative (23)

General Goal: Achieving significant improvement in five aspects by 2020: efficiency of resource utilization, greater contribution by alternative industries to local GDP, restoration of degraded mines, boosting of local residents' income, renovation of shantytowns.

(Source: Sustainable Development Planning for National Resoures-Based Cities (2013-20))