Shanxi - Economy

Economy

The GDP per capita of Shanxi is below national average. Compared to the provinces in East China, Shanxi is less developed for many reasons. Its geographic location limits it participation in international trade, which involves mostly eastern coastal provinces. Important crops in Shanxi include wheat, maize, millet, legumes, and potatoes. The local climate and dwindling water resources limits agriculture in Shanxi.

Shanxi possesses 260 billion metric tons of known coal deposits, about one third of China's total. As a result, Shanxi is a leading producer of coal in China and has more coal companies than any other province, with an annual production exceeding 300 million metric tonnes. The Datong (大同), Ningwu (宁武), Xishan (西山), Hedong (河东), Qinshui (沁水), and Huoxi (霍西) coalfields are some of the most important in Shanxi. Shanxi also contains about 500 million tonnes of bauxite deposits, about one third of total Chinese bauxite reserves.

Industry in Shanxi is centered around heavy industries such as coal and chemical production, power generation, and metal refining. There are countless military-related industries in Shanxi Province due to its geographic location and history when it is used to be the base of the Chinese Communist Party and the People's Liberation Army. Taiyuan Satellite Launch Centre, one of China's three satellite launch centers, is located in the middle of Shanxi Province with China's largest stockpile of nuclear missiles.

Many private corporations joint with the state-owned mining corporations have invested billions of dollars in the Mining Industry of Shanxi Province. Hong Kong billionaire Li Ka-shing has made one of his largest investment ever in China on exploiting coal gas in Shanxi. Foreign investors include mining companies from Canada, the United States, Japan, the United Kingdom, Germany and Italy.

The mining related companies include Daqin Railway Co. Ltd., which runs one of the busiest and most technologically advanced railway in China connecting Datong and Qinhuangdao and exclusively for coal shipping. The revenue of Daqin Railway Co. Ltd. is among the highest in Shanxi Province's companies due to its exporting of coal to Japan, Korea, and South-East Asia.

Shanxi's nominal GDP in 2011 was 1110.0 billion yuan (US$176.2 billion), ranked 21st in China. Its per-capita GDP was 21,544 yuan (US$3,154).

Shanxi is infamous for bad working conditions in coal mining and other heavy industries. Thousands of workers have died every year in those industries. Cases of child labour abuse were discovered recently.

In contrast with the poverty, Shanxi is known for its wealthy mine owners in China. Consortiums of mine owners from Shanxi have influences in Beijing's real estate market because of their speculation. The only other wealth group in China having the same influence is the entrepreneurs from Wenzhou, Zhejiang Province which is the centre of light industry of China and the world.