In this study, I examined the reasons for this rapid economic growth by way of identifying the industrial features unique to Inner Mongolia. Also, I examined issues related to unemployment being faced by local economies.
This examination has revealed that economic growth in Inner Mongolia is deeply related to the characteristics of the regional industrial structure. The basic industries of Inner Mongolia are the mining, electric power, iron and steel/metal-processing, and chemical industries, which are all strongly related to one another, offering the multiplier effect of economic growth to the region. Such characteristics of industrial structure are supposed to be principal factors for the achievement of the rapid economic growth of Inner Mongolia.
Not being labor-intensive, however, these basic industries can hardly be expected to absorb labor force. With the advance of regional differentiation, the development of light industry with high labor absorption and of forward-related industry, that is, tertiary industry, is limited, blocking labor absorption. In this industrial context, rationalization of the employment structure of primary industry has been promoted, and labor force eliminated from the agriculture and livestock industries has served to raise the unemployment rate.
To resolve unemployment issues, therefore, it is important to develop light industry that can meet regional needs. This would promote the development of tertiary industry and, consequently, employment in the region. The mining, agriculture and livestock industries are foundations for industrial linkage in Inner Mongolia, where no other industries would develop in their absence. It is, therefore, thought that the sustainable development of Inner Mongolia depends on the successful achievement of rational development and environmental protection (regarding cultivated land and grassland).
JEL Classification: L16, O11, O18, R11
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