Blessings or curses? – The bittersweet impacts of the mining industry on rural livelihoods in China

Abstract

Mineral resource development is essential for poverty reduction, but its potential blessings or curses are contentious. Micro-level studies on this topic have been limited, failing to thoroughly analyze the impact pathways on local livelihoods. This study employs the sustainable livelihood framework and statistical techniques to investigate how mineral resource development affects farmers' livelihoods in China and explore the micro causes of the “resource curse”. Data from the Chinese Rural Microeconomic Survey Database in 49 counties across 13 provinces are used for analysis. Our findings show that mining boosts physical capital but depletes nature capital. Mining reduced the proportion of the farming household labor force engaged in pure agriculture by 2.21% and increased the proportion in mixed work by 9.65%. The mining industry directly caused a 14.21% decrease in the proportion of farming household laborers working in their own townships and a 11.61% increase in the proportion working outside the county. Both direct and indirect impacts of mining on livelihoods are identified. The irreversible destruction of agricultural livelihoods by the mining process and the long-term labor outflow may lead to population migration, exacerbating the hollowing out of rural areas in mining areas, and be an important microscopic cause of the “resource curse”. Policy recommendations derived from our analysis include enhancing nature capital in mineral resource development areas, providing sustainable alternative livelihoods, and encouraging the return of labor force to rural regions.