Gap between the rich and the poor in resource—based region:A study on Yulin City

Abstract： Scholars haven’t paid much attention to resource-based regional divide between rich and poor. However， the impact on regional social development cannot be underestimated. And we should explore the solutions to deal with this problem. Based on the basic theory of the resource-based cities divide between rich and poor， this study made an in-depth analysis of Yulin City， including the rich-poor divide characteristics， causes， and social impact. The results mainly discovered the phenomenon the great gap between resource-based economy in the same area and the non-resource-based economy and the gap between different sectors. This “non-rich poor gap” strongly leaded to an unfair psychological effect on social stability. The paper suggests that we should seek solutions in the mode of development and fiscal policy as soon as possible to maintain coordinated regional development.

Key words： Resource-based region， Gap between the rich and the poor， Strategies

In the recent decades， the income gap increase rapidly in our country， and Chinese scholars have carried on widely research on the income disparity and distribution. These studies investigate some aspects about this problem， such as its origin， its current situation， the influence factors and countermeasures. But most of them are only focus on the urban-rural incomes gap. Reasons for the urban-rural income gap mainly include： the dual economic structure of division urban and rural areas； the slowly development of urbanization； the industrial-oriental development strategy which advocates agriculture to support industry； the influence of the income distribution system； and the development of financial markets. This resourceful income gap is different from the gap of urban-rural income gap， or the income gap between the western and eastern. It has its own causes； meanwhile its influence for our social development is also differing. This problem needs our deep analyze for corresponding solution. In this paper， the income gap problem is approached systematically， with a typical area--Shaanxi Yulin as an example.

1. The current situation of income gap in Yulin

1.1 "coal and non-coal" regional gap between rich and poor

"Coal and non-coal” is a commonly used word in resourceful areas. It refers to two kinds of regional economy： one relies on coal， the other engages in the traditional agricultural production. Administrative regions in Yulin include one city district and 11 counties. The city district is called Yuyang District. Bordered by the ancient Great Wall， the local people call Yuyang district， Shenmu county， Fugu County， Hengshan County， Jingbian County and Dingbian County as "the six northern counties"， which can be regard as coal-producing counties. While the Mizhi County， Jia County， Wubao County， Qingjian County， and Zizhou County are called "the six South County，” belong to agricultural counties. As graph 1 is shown， in 1978， the per capita GDP in north and south counties are basically at the same level； but with the exploration of coal resources， this income gap gradually expanded. Especially in recent years， this gap increases rapidly. The disparity on GDP， fiscal revenue， resident’s income and other indicators between coal production counties and non-coal counties is quite large.

According to the statistic， in 2011 the six north counties which are resources enrichment attributed 94% for the total GDP in Yulin， while the six south counties only accounted for 6%； as for the local fiscal revenue， the six north counties attributed more than 98%， while the six south counties accounted less than 2%. Even in the same area， the countries abound with coal resource develop much rapider than the countries which are not. Take Shenmu county as an example， in 2011 the GDP of Daliuta area reached 2.9 billion yuan， while Gao Jia Bao country， though also located in Shenmu， the GDP is only 0.166 billion yuan， farmer’s per capita net income is only 5320 yuan. These areas show a typical phenomenon of "not rich is poor"： some people become rich overnight because of the resources they control， while the general people still remain in poverty.

1.2 The Resident Income Gap

There is a huge difference between the urban and rural resident income. According to statistic， in 2011 the per-capita disposable income of urban households reached 20030 yuan， increase by 14.2%； while the per capita income of rural residents was only 5905 yuan， with the income ratio between urban and rural residents raised to 3.55：1. According to relative researches by experts， after the elimination of some unreasonable statistical factors， now the income gap between urban and rural income in Yulin is at least 5 - 6 times； furthermore， the gap is continuous widen now. The gap between urban and rural areas， however， is not only about the income gap， it also reflected in the education investment， public health resources and so on. Data shows that in 2010， the rural residents， which accounted to 75% population in Yulin， only enjoy 27% of the total health resources. The rural medical insurance coverage rate is only 21.2%， while the urban resident is 78.21%. As to the social security， rural residents basically cannot enjoy its benefits， though some relatively rich rural countries in Shenmu and Fugu has began to establish rural social pension systems， only 15% of rural people can enjoy them.

The difference between different industry and different classes is significant. The state monopoly industries and some important departments， such as some large coal， oil， electricity enterprises rely on monopoly mineral resources， and special administration departments--for example tax bureau and environmental protection bureau--can get high income in a certain period， thus form the industry gap. According to Yulin statistical yearbook， in 2011， the average annual salary of employees in city is 45053 yuan. Among them， the wages of workers in monopoly industries--such as power and gas-- is 63655 yuan， while in non - monopoly industry such as agriculture， forestry ，animal， husbandry and fishery， the workers’ wage is only 29873 yuan， the difference is about 2 times. The lowest income lies in accommodation and service industry， with the average annual salary of 19388 yuan. In addition， because of the difference in resources possession， the income gap in six north counties is particularly significant. According to incomplete statistics， in 2010， only in Shenmu County， the number of families which has 100 million yuan assets is more than 6000， in Fugu County the number is more than 1500. While in Yulin， 2010 per capita net income of farmers is only 5113 yuan， it means that the powerful coal boss’ one year income is equivalent to the sum of the net income for all farmers in the city.

2. Reasons for Rich-poor Divide

2.1 Imbalanced Regional Development

Since the 1990s， the six northern counties of Yulin City made a rapid economic development relying on energy mineral resources， especially coal resources. Coal mining impelled the rapid economic development. However， the single industrial structure， short industrial chain and the extensive mode of development will cause the “only coal dominant” problem， like Fugu， Shenmu County. Fugu County （2011） the proportion of the output value and added value of coal mining and primary processing among the total industrial output value and added value has been up to 67% and 82%. Because of the rapid development of coal， the development of other industries in the region is seriously lagging behind. At the same time， practitioners and relative income continued to decline. Other poverty-stricken counties in Yulin City are also easy to poverty comes down to the question of resources. They thought that the rich county in the north due to its gas resources. The exaggerated importance of resource misunderstood its economic development， and leaded to the problem that there is no time to develop industries with local advantages. For example， Qingjian， red dates of Jiaxian， jujube， small grains， Suide County stone lions， etc.. these can actively promote the industrial management and make it a point of economic growth.

2.2 Non-standard Gas Resources Development

For historical reasons， the phenomena that mineral resources are owned and operated without specification. From the perspective of all operators， it mainly shows in three aspects. First of all， resources are cheap or almost free of charge to obtain the mining rights. Mineral rights of the state-funded exploration are transferred to the mining enterprises with a cheap price even free of charge through the examination and approval system rather than market behavior. Since the contracting costs are very low， a lot of mining enterprises can obtain mining rights with a cheap or even almost free of charge. In addition， insufficient safety investment phenomenon in coal enterprises is very common in our country， especially the private coal mine safety serious debt. In most of the small coal mine， the gap between the safety production conditions and production safety licensing requirements is very huge. They avoid the necessary safety cost and obtain huge profits. What’s more， resource-based enterprises ought to bear the mining environment compensation obligation， but they did not， which reduces the cost and leads to a huge profits. From the perspective of common framers and workers， it shows in three aspects. First， salary is too low. Wages commensurate with the nature of the type of work does not work intensity. Workers’ wage increased slowly. Although the price of raw coal per ton is growing rapidly， little gains miner's average wages. Second， security conditions are quite poor in many small and medium-sized private coal mines. Miners rarely pay medical insurance and pension insurance for miners. Some private mines even occur the phenomenon that the miners and mine owners sign a cheap contract of life and death. Third， mining brought some problems that make the peasants mine life difficult， such as landslides， destruction of vegetation， village mining subsidence， drying up of groundwater. In this way， it results the greater gap between the rich and the poor， the operators of gas mineral resources and the workers and farmers， which shows a significant "non-rich poor" characteristics.

2.3 Monopoly of the Allocation of Resources and Failure

of the System

First of all， the administrative monopoly is an important factor in China's current resource-based industries to obtain high returns （explicit or implicit） resource-based enterprises. They take advantage of national policies for the protection， maintenance and extension of the monopoly by restrictive competitive behavior， never playing field monopoly income. In addition， in the view of the current tax system， the main current taxation and fee of resources in China are resource compensation tax and resources tax. And the average rate of China's mineral resources compensation equivalent to only a few tenths of that of United States. Lower taxes of resource-based enterprises contributed to profits of resource extraction and exacerbated by the wealth gap between the resource-based economy and non-resource-based economy practitioners. At last， many large-scale resource-based enterprises are mostly state-owned enterprises. Their profits are dominated by the enterprises. Thus they shut off gains to increase and improve the welfare and real income of the employees， which leaded to the formation of the gap between the rich and the poor among employees in both resource–based and non-resource-based economy.

3. Social Impact Analysis on Resource Gap Between the Rich and the Poor

The gap between the rich and the poor has a duality. Under certain conditions， the gap between the rich and the poor enhances people's sense of competition and efficiency. However at the same time， especially the gap exceeds a certain level， it will also affect individual psychology， thereby affecting the group psychology， which will finally lead to serious sense of injustice and various social problems. As the question of the relationship of the so-called "Latin American trap"， this duality is essentially the efficiency and fairness [4]. According to our survey， in Yulin region， people pay much attention to the relative income， which is an important factor affecting the happiness index That is， though the positive effects of such resources gap between the rich and the poor in Yulin is relatively small， the negative effects are huge. More exactly， the resource gap between the rich and the poor has the character of short formation processing， low degree of recognition and long-time effect， which is easy to cause people intense social psychology and behavioral responses.

In addition， due to particular forming of the resource gap between the rich and the poor， it is easy to make people generate social cognitive biases. They may mistakenly believe that all of the gap between the rich and the poor are caused by the systems， policies， resource endowments， which will reinforce the unfair psychological. Under normal circumstances， the resource gap between the rich and the poor caused by psychosocial mainly show three psychosocial phenomenon： sense of deprivation， frustration and anxiety [5]. Though geographically near with each other， resource area are clearly different from the non-resource areas. Non-resource area residents have a more strong sense of deprivation caused by the resource gap between the rich and the poor. Poverty and the slow regional development is due to the social environment and natural resources， which leaded to lose the sense of social justice， or hostile， rebellious， negative emotions and sense of loss and development of the society. This emotional frustration is obvious in resource area， particularly under the social structure in which the resource gap between rich and poor due to the rich that the poor "and the polarization. The great gap between reality and their own expectations， easily lead to the marginalization of personality and the formation of anti-social personality， is typical of the hatred of the rich psychological and attack signatures.

4. Conclusions and Strategies

4.1 Adjusting industrial structure， and transforming economic growth patterns.

It is required to alter the development concept， change the structural imbalance among the three industries， and transform economic growth patterns to advocate the sustainable development and circular economy. First of all， we should vigorously develop the primary industry and optimize the adjustment of agricultural and rural economic structure. What's more， we should develop characteristic agriculture and modern agriculture and improve the efficiency of agriculture to make sure that both agricultural income and non-agricultural income will increase rapidly. Second， we should promote coal industry level up to synthetic materials， fine chemicals， chemical products in downstream of the coal chemical industry. Therefore， the coal industry will realize the transformation from bottom-end to high-end ， from the type of raw material to fuel ，and from a single traditional industry to an integration of services including research and development， production， processing， completion. Third， we should energetically develop modern logistics industry and cultural tourism so as to form the system that energy industry interacts with non-energy industry.

4.2 Reforming resource allocation system and Promote the development of market economy.

Resource property rights reform and resource costs clarification is of priority to Institutional improvement. We should break the monopoly， cancel the unreasonable restriction of admittance of resources industry， lift the control over resource exploitation， processing and sales market， and gradually introduce the competition mechanism of resource allocation. Besides， we should establishing the market mechanism of resource property rights transfer ， form the reasonable transfer price and clarify the resource products costs which mainly include mining right cost， resource tax and environment compensation cost and safety input costs. In addition， we should carry out the market-oriented transfer between mineral exploration right and mining right， modify the resource taxes and dues system， Raise a proportion of Resource tax levy， levy mineral land reclamation deposit or establish the reserves of land reclamation in order to build the ecological civilization.

4.3 Increasing the transfer payment system and ensuring regional scientific development.

Through transfer payment， we should attach importance to handle the north-south imbalance of regional development and the gap between rich and poor. Firstly， on the basis of understanding the present situation of NaBuXian development， we should bring the comparative advantage into play， formulate the overall plan to support NaBuXian accelerating the development， implement related preferential policies and develop a batch of major projects together. Secondly， In terms of money， we should introduce some policies conducive to the development of NaBuXian as well as other economic aid distribution methods to ease the local financial pressure and improve the residents living standards to make up for the income gap of inevitable market competition as far as possible. Thirdly， for farmers in the coal mining area， we should practice a variety of compensation policy such as “coal compensates for agriculture”， meanwhile， we should improve the miners' wages and security including improving the accident compensation standards[6]。

4.4 Improving the social security system， and speed up to push the new urbanization.

Government should strive to establish and perfect the multi-level social security system in order to maintain social stability and harmony. Firstly， we should adhere to the basic pension and medical care system， which combines social pooling and individual account to implement the lowest living security， especially to strengthen the construction of rural social security system ， so as to gradually narrow the gap between different social groups in planned and phased way. Secondly， we should strengthen the lever and adjustment of tax and transfer payment and strengthen the regulation of tax revenue. Through taxation， we should make the rich take more social responsibility （public goods） and encourage coal bosses to develop charity. Thirdly， we should improve the system of rural land property rights and circulation as soon as possible， guarantee the rights of farmers' basic property， increase investment in rural education， speed up to improve the quality of the rural labor force. Thus， gradually establish a rural labor employment service and management system， promote the rich labor force to cities and promote the great development of urbanization. Fourth， we should strengthen the work of social psychology， accurately grasp the psychological dynamic social wealth and build social psychological persuasion mechanism， control the extreme social behavior， maintain social stability and safeguard social and economic steady development.

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Brief Introduction of the Authors：

1、Zhan Shaowen，（1970-），male，Huanggang， Hubei Province， Ph.D， Professor， Xi'an University of Architecture and Technology. Research interests： public policy analysis， management of cultural industries.

2、Han Zhurong，（1988-），female，Yulin，Shaanxi Province， Postgraduate of Administration， Xi'an University of Architecture and Technology.