Examining the environmental consequences of China's mineral wealth and governance in the context of the natural resource curse

Abstract

This study investigates the environmental consequences of China's mineral wealth and governance within the framework of the natural resource curse. The natural resource curse posits that countries rich in natural resources often experience less economic growth and worse development outcomes than countries with fewer natural resources. This phenomenon is particularly relevant for China, which has experienced significant mineral wealth since the 1990s. The primary aim of this research is to assess how China's mineral wealth and governance structures have influenced environmental outcomes from 1990 to 2022, using an econometric model. The results reveal three key findings: First, regions with higher mineral wealth have experienced more severe environmental degradation, particularly in terms of air and water pollution. Second, governance quality plays a critical role in moderating these effects, with better governance associated with less environmental harm. Third, economic growth driven by mineral wealth does not necessarily translate into improved environmental conditions, highlighting a disconnect between economic and environmental objectives. The policy implication is clear: to mitigate the environmental consequences of mineral wealth, China must strengthen its governance mechanisms and integrate environmental considerations into its resource management strategies.