Sharing resource wealth for peace: A Chinese strategy to cope with the resource curse

• Understanding the negative externalities of extractive industries.
• Exploring state responses to the curse of natural resources.
• Proposing the sharing of resource wealth as a solution for resource-triggered conflicts.
• Emphasizing the role of local state in resource conflict resolution and prevention.
• An empirical case study of mining areas in China.

One symptom of the resource curse, as comparative studies suggest, is that rich mineral resources often contribute to social conflicts and even civil wars, especially in developing countries with weak political institutions. How can resource-rich countries deal with these social conflicts? This research provides some lessons from China, a country that hosts rich resources in many of its localities and faces high risk of resource-triggered social instability. Through a case study of one coal-rich Chinese locality, we find that the local state designed various schemes to allow the local communities to share the resource wealth, which effectively alleviated popular grievance and prevented resource-triggered social conflicts in the region. Based on the findings, we argue that the government of resource-rich regions can play crucial roles in designing institutions and implementing policies to redistribute resource wealth as a strategy to cope with the resource curse.