Economic responses to the closure of small-scale coal mines in Chongqing,China

In 1998, China launched a programme to close tens of thousands of small-scale coal mines within just three years. Few measures were put in place to mitigate the negative impacts. This paper reports on a study in the Chongqing Municipality of south-west China, with the aims of identifying the economic impacts of the mine closure campaign and examining what factors permitted some localities to respond more successfully to the resulting economic challenges. Those areas with greater wealth and more diversified economies were able to absorb the shock of mine closure more effectively than poorer areas and those with less diversified economies. These latter groups either failed to respond to mine closure or reacted by increasing output from the remaining mines. In the successful cases, though the economy of the area as a whole was able to withstand the impact of the mine closure campaign, no evidence was found of any attempts to assist those in the local communities directly affected by mine closure.