Ordos is a city in northern China. Although many people wouldn't recognize the name, Ordos is important economically. Its GDP per capita was greater than Hong Kong’s in 2012. How could that be possible? The answer is black gold - coal - a natural resource that spurred growth in many other cities in northern China since the turn of the century. Prior to 2000, cities like Ordos were under-developed, with animal husbandry as the primary economic activity. An increasing reliance on coal has contributed to China’s rapid economic growth and in particular, it has accelerated the growth of coal-producing cities. Propelled by coal, Ordos has experienced a typically unhealthy development pattern. Coal mine owners become overnight millionaires, government officers are promoted quickly to central government, car dealers sell expensive cars to local people and there are new night clubs, restaurants, and hotels opened every day. However, their clean land is gone, their animal husbandry business is ruined and their air quality has deteriorated. In fact the biggest economic cost for them is not the transportation fee for coal but an environment that has become polluted.
China’s coal sector is not only the world’s largest, but also the most dangerous and most polluting. New central government leadership and a five-year plan recognize that the development of cities like Ordos needs to be radically altered. A good example of action beyond words is the central government providing direction and incentives to local government to redevelop animal husbandry and other environmentally friendly businesses.
Bottom Line: Development is important but both the long and the short term have to be considered together with the environment.
* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.