Frontiers in Business, Economics and Management 
ISSN: 2766-824X | Vol. 16, No. 1, 2024 

 

384 

Economic Transformation Development in Shanxi 

Zihang Zhao 

Lyceum of the Philippines University, Philippines 

 

Abstract: Shanxi is one of the most typical provinces in China that mainly rely on mineral resources to develop economy. 
While making great contributions to the national economic development, many problems such as the imbalance of industrial 

structure, the deformity of ownership structure and the primary factor endowment have become more and more prominent, which 

have seriously affected the sustainable economic development of the whole province, and the transformation and reform is 

particularly urgent. As an important economic lever and regulation tool, fiscal and tax policies play an important role in 

promoting economic transformation. Therefore, it is necessary to conduct in-depth research on how to innovate fiscal and tax 

policies and deepen fiscal and tax system reform, so as to provide ideas and basis for government decision-making. 

Keywords: Coal, Industrial structure, Ownership structure, Economic development, Fiscal policies, Tax policies. 

 

1. Introduction 

For Shanxi coal enterprises in the recession and moving 

towards the early stage of transformation, this paper analyzes 

and studies the current enterprise financing strategy, 

enterprise development status and the relationship between 

them, so as to provide financial guarantee for the development 

of enterprises in special periods and provide a strong basis for 

avoiding the failure of enterprises to break through the 

recession and move towards benign development due to 

financial problems. It also makes an in-depth study on how to 

innovate fiscal and tax policies and deepen fiscal and tax 

system reform, so as to provide ideas and basis for 

government decision-making. 

2. Methodology 

2.1. Sample Selection and Data Source 

The selection of sample time range in this study first will 

take into account the reform of accounting system in 2007 and 

the establishment of "comprehensive reform zone" in Shanxi 

in 2010. This paper will take 15 listed companies in Shanxi 

coal industry from 2010 to 2017 as the research object. 

Relevant data will mainly come from sina finance, Shanghai 

and Shenzhen stock markets, guotai'an and Ruisi databases. 

In addition, in order to ensure the reliability of the data, this 

paper will delete the company data with many missing values, 

large fluctuations within the time range of the selected sample 

and marked as St during the sample period. 

2.2. Variable Design 

(1) Explained variable and explanatory variable.  

Operating profit growth rate: This paper will find the best 

variable, i.e. operating profit growth rate, main business 

income growth rate, return on net assets and return on assets, 

after principal component analysis. Average cost of capital: 

the weighted average cost of capital is used in the research of 

enterprise financing strategy in this paper. Whether the 

enterprise can obtain the maximum financing amount with the 

lowest weighted average capital cost is the focus of the 

enterprise in financing. Asset liability ratio: since the research 

content of this paper will be the specific financing strategy 

adopted by enterprises under the transformation and 

development of resource-based economy, the asset liability 

ratio can reflect the proportion and intensity of enterprise debt 

financing. Therefore, this paper will select the asset liability 

ratio as the research index. 

(2) Control variables.  

In order to avoid the one sidedness and singleness of the 

research results, five key factors of enterprise transformation 

and development will be selected as control variables through 

analysis, namely enterprise scale, technology scale, 

profitability, capital utilization rate and financing risk. (Table 

4) β0 

2.3. Model Construction 

(1) Test model of the relationship between enterprise 

development and average capital cost: 

𝑀𝐵𝑅𝐺 = 𝛽0 + 𝛽1𝑊𝐴𝐶𝐶 + 𝛽2𝑆𝐼𝑍𝐸 + 𝛽3𝑇𝐸𝐶 + 𝛽4𝑅𝑂𝐴 +
𝛽5𝑅𝑆 + 𝛽6𝑅𝑂𝐸 + 𝛽7𝐺𝐴 + 𝜀  

(2) Test model for the relationship between enterprise 

development and asset liability ratio: 

𝑀𝐵𝑅𝐺 = 𝛽0 + 𝛽1𝐷𝐵𝐿𝑇 + 𝛽2𝑆𝐼𝑍𝐸 + 𝛽3𝑇𝐸𝐶 + 𝛽4𝑅𝑂𝐴 +
𝛽5𝑅𝑆 + 𝛽6𝑅𝑂𝐸 + 𝛽7𝐺𝐴 + 𝜀  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

385 

Table 1. variable definitions are listed 

The name of 

the variable 

The 

variable 

symbol 

Variable evaluation metrics and 

definitions 

Growth rate 

of operating 

profit 

MBRG 

Growth in operating profit for the 

current year/Total operating profit 

for the previous year 

Average cost 

of capital 
WACC 

Weighted average cost of capital 

for an enterprise 

Asset-

liability ratio 
DEBT Total assets/total liabilities 

The size of 

the business 
SIZE 

The natural book value of the total 

asset 

Technology 

scale 
TEC 

The annual value-added of 

technological progress as a 

proportion of the annual growth of 

total output value 

Profitability ROA Net profit/total average assets 

Fund 

utilization 

rate 

RS 
Net cash inflow from sales 

revenue/financing activities 

ROE Net profit / average net assets 

Risk of 

financing 
GA 

Change rate per share/rate of 

change in earnings before interest 

and tax 

2.4. Statistical Treatment  
Table 2. List of descriptive statistics for each variable 

variabl

e 

The 

sampl

e size 

mean minimum 
media

n 
maximum 

MBR

G 
104 -0.0334 -283.4991 

-

0.4025 
228.6254 

WAC

C 
81 0.3811 -8.2969 0.0948 7.9974 

DEBT 104 0.6080 0.0001 0.4787 8.5226 

SIZE 104 22.7492 15.8903 
23.086

4 
24.7419 

ROA 104 0.0305 -0.9370 0.0128 1.0454 

GA 104 1.8137 -2.5881 1.0194 21.1273 

ROE 104 0.0283 -0.7083 0.0227 0.4481 

RS 100 
498.470

5 

-

22849.77

00 

0.4651 
76654.68

00 

 

Table 3. List of regression results for each model 

variable Model 1 Model 2 

DEBT  12.3359***(0.008) 

WACC -3.4930***(0.006)  

SIZE -9.4220***(0.000) 19.0044**(0.011) 

ROA -297.5369***(0.001) -104.3262(0.118) 

GA 0.2139(0.413) 1.6605(0.137) 

ROE -54.4409(0.515) -84.6132(0.288) 

RS -0.0305***(0.000) -0.0014***(0.000) 

TEC -160.6294(0.126) -41.1682(0.441) 

_cons 399.2205***(0.004) 363.5358***(0.009) 

R2 0.7372 0.3808 

F 246.99 127.36 

Prob>F 0.0000 0.0000 

3. Presentation, Analysis, And 
Interpretation of Data 

3.1. Problems Encountered in The Economic 
Structure of Shanxi 

(1) The imbalance of industrial structure still exists 

Industrial structure is an important index to measure the 

quality of economic development. In 2016, the added value 

of Shanxi's mining industry accounted for 15.62% of the 

regional GDP. Although it was significantly lower than 34.13% 

in 2011, nearly 1 / 6 of the province's GDP still came from the 

mining industry. The four major industries of "coal, coke and 

electricity" account for 22.9% of the regional GDP, 22.12 

percentage points lower than that in 2011, but more than 1 / 5 

of the GDP still comes from the resource-based industries 

composed of "coal, coke and electricity". The provincial tax 

situation can also reflect the weight of resource-based 

industries in the financial economy. In 2018, the tax revenue 

of the mining industry accounted for 43.24% of the tax 

revenue of the province, contributing 38.3% to the increase of 

tax revenue. The tax revenue of the resource-based industry 

composed of "coal, coke and electricity" accounted for 52.8% 

of the total tax revenue of the province, and the tax 

contribution rate was as high as 57.5%. It can be seen that the 

financial and economic resources of the province are still 

highly dependent. The total scale of strategic emerging 

industries is small and the level is low, which does not play a 

strong leading role in economic growth. In 2018, the added 

value of high-tech industries (Manufacturing) in the province 

accounted for only 4.9% of the added value of industries 

above Designated Size in the province, which was far from 

the national average of 13.9%, a difference of 9 percentage 

points. Although the proportion of service industry in the 

province's GDP has increased, and its contribution to GDP 

growth is also higher than that of the secondary industry, this 

is mainly affected by the weak growth of traditional industries 

such as "coal, coke, metallurgy and electricity". The 

slowdown in the growth of the secondary industry highlights 

the status of the service industry to a certain extent, but 

fundamentally, the development of the service industry in 

Shanxi still lags behind. The service industry in the province 

is still dominated by traditional service industry and consumer 

service industry, and the development of producer service 

industry is insufficient. Among producer services, traditional 

producer services such as wholesale services, goods 

transportation and warehousing services account for the main 

body, while modern producer services such as R & D and 

design, energy conservation and environmental protection 

and training services that significantly promote quality and 

efficiency improvement and structural adjustment are small 

in scale and lack development width and depth. 

(2) Abnormal ownership structure 

Ownership structure plays an extremely important role in 

the whole economic operation. In Shanxi, state-owned and 

state holding enterprises have occupied the dominant position 

in the market for a long time, and the private economy is not 

active enough. The proportion of assets of state-owned and 

state holding enterprises in Shanxi at the end of the year is 

significantly higher than the national average level, and also 

significantly higher than the proportion of private economy in 

the province. In 2017, the assets of state-owned and state-

controlled industrial enterprises in the province accounted for 

65.74% at the end of the year, while the private economy was 

only 17.36% in the same period, 48.38 percentage points 

higher than the latter. According to the list of China's top 500 

private enterprises in 2018 released by the all China 

Federation of industry and commerce, only five enterprises in 

Shanxi are on the list, and none of them has entered the top 

100, and the best performance is only 387. Compared with 

other provinces, Xinjiang, whose economic aggregate is less 



 

386 

than Shanxi, has one enterprise in the top 100, ranking 19th. 

Even Ningxia, whose economic aggregate is much lower than 

Shanxi, has one enterprise ranking 67th. From the operating 

income as the ranking standard, the total operating income of 

Huawei ranked first is 603.6 billion yuan, while that of Shanxi 

enterprises is 19.7 billion yuan, less than 1/30 of Huawei. (see 

Table 1) from the industry of the shortlisted enterprises, the 

five shortlisted enterprises belong to heavy industry, of which 

four belong to heavy chemical industry, and none of the 

private brands is nationally famous and lack competitiveness 

in the country. The lagging development of private economy 

leads to the lack of economic vitality, which is a major 

weakness of Shanxi's economic growth. 

 

Table 4. Top 500 Private Enterprises in China 2018 

rank

ing 

The name of 

the enterprise 
Industry 

Operating 

income (100 

million yuan) 

1 

Huawei 

Investment 

Holdings 

Limited 

Computer, 

communications 

and other electronic 

equipment 

manufacturing 

6036.21 

387 
Shanxi Lubao 

Group 

Petroleum 

processing, coking 

oh nuclear fuel 

processing industry 

197.25 

396 

Meijin Energy 

Group Co., 

Ltd 

Petroleum 

processing, coking 

oh nuclear fuel 

processing industry 

192.57 

401 

Dayun 

Kyushu 

Group Co., 

Ltd 

Automotive 

manufacturing 
189.46 

455 

Shanxi 

General 

Talent 

Industry and 

Trade Co., Ltd 

Ferrous metal 

smelting and rolling 

processing industry 

170.15 

466 

Shanxi Liheng 

Iron and Steel 

Group Co., 

Ltd 

Ferrous metal 

smelting and rolling 

processing industry 

166.10 

 

(3) The dominant position of enterprise innovation has not 

been established 

Enhancing the ability of independent innovation is the 

basic requirement and driving force to promote the 

transformation and upgrading of Shanxi's industrial structure, 

improve its core competitiveness and realize comprehensive, 

coordinated and sustainable development. From the current 

situation, Shanxi's independent innovation ability is 

insufficient, and the construction of the main position of 

enterprise technological innovation needs to be strengthened. 

In 2017, there were only 468 enterprises with R & D activities 

among industrial enterprises above Designated Size in the 

province, accounting for 12.2% of Industrial Enterprises 

above Designated Size in the province and only 0.46% of the 

national total. The number of new product development 

projects, development expenditure, sales revenue and other 

indicators to measure the development and production of new 

products are at a low level. In 2017, there were 3119 

development projects of new industrial products above 

Designated Size, with development expenditure of 8.955 

billion yuan and sales revenue of 154.348 billion yuan, less 

than 1/7, 1/5 and 1/5 of Anhui, which also has a considerable 

gap compared with other central provinces (see Table 2). The 

number of scientific and technological small and medium-

sized enterprises and high-tech enterprises is small. By the 

end of 2017, there were 1117 high-tech enterprises in the 

province, less than 1% of the national 136000. There were 

217000 small and medium-sized enterprises in the province, 

but less than 2000 met the national identification standards 

for scientific and technological small and medium-sized 

enterprises. 

 

Table 5. Development and production of new industrial products 
above the scale of the six central provinces in 2017 years 

 

Number of 

development 

projects 

(items) 

Development 

expenditure 

(100 million 

yuan) 

Sales revenue 

(RMB 100 

million yuan) 

Shanxi 3119 89.55 1543.48 

Anhui 22904 511.71 8843.08 

Jiangxi 11689 294.96 3857.17 

Henan 13058 398.23 7095.89 

Hubei 12460 464.06 7523.49 

Hunan 10204 485.75 8585.72 

 

(4) Primary factor endowment 

Affected by the weak demand for technology and talents 

due to the intensive resources and capital of resource-based 

industries, there is a serious lack of advanced production 

factors in Shanxi. In terms of the number of scientific 

researchers, in 2017, there were 8817 scientific researchers in 

the province, accounting for only 1.9% of the national total. 

In terms of scientific research investment, the R & D 

investment intensity of the whole province is 0.95%, while 

the national average is 2.13%. Shanxi lags behind the national 

average by 1.18 percentage points, and the gap with the whole 

country is becoming larger and larger. Among the 31 

provinces (cities and districts) in China, Shanxi's R & D 

investment and investment intensity rank 20th and 22nd, both 

in the lower position. The average R & D investment of 

Industrial Enterprises above Designated Size accounted for 

0.94% of the main revenue, only 0.68% in Shanxi, and the 

investment intensity of some subdivided industries was less 

than 0.2%. In terms of science, technology and finance, there 

are only 6 venture capital guidance funds and emerging 

industry venture capital funds established by the government 

in the province, and the number is relatively small. In terms 

of scientific research achievements, the number of authorized 

patent applications, invention patents and effective invention 

patents in Shanxi account for a very low proportion in the 

national total, only 0.54%, 0.51% and 0.7%, and the turnover 

of the provincial technology market accounts for only 0.7% 

of the country, which is a great gap compared with developed 

provinces. From the perspective of human resource quality, 

85% of the employees in the province have high school and 

below education level, and only 15% have bachelor's degree 

or above. The overall quality of employees is not high, and it 

is difficult to convert human capital into high-quality output. 

Insufficient R & D investment and lack of talents reflect the 

insufficient formation of high-quality production factors in 

Shanxi, showing the obvious characteristics of primary factor 

endowment. 

(5) Environmental pollution hinders economic growth 

Although some achievements have been made in 

ecological construction, Shanxi is still one of the provinces 



 

387 

with prominent ecological and environmental problems in 

China. In 2017, the emission of volatile phenol in the 

province's sewage discharge was 18.07 tons, the largest 

among the six provinces in Central China, causing serious 

pollution to water resources. The emissions of soot, dust and 

sulfur dioxide are also among the largest in the country. In 

2017, the average concentration of PM2.5 increased by 4% 

year-on-year, making it one of the few provinces in China 

with reduced atmospheric environmental quality. Among the 

six provinces in Central China, the annual emissions of sulfur 

dioxide and smoke (powder) dust in Shanxi are significantly 

higher than those in the other five provinces, and the air 

quality needs to be further improved (see Table 3). Forest 

resources have been largely destroyed due to years of resource 

exploitation. In 2017, the forest coverage rate of the whole 

province was only 18%, the lowest among the six provinces 

in Central China. 

 

Table 6. Emissions of major pollutants in the six central provinces 
in 2017 

 

Pollutant 

content (tons) 

in wastewater 

Content of major pollutants in 

exhaust gases (10,000 tons) 

 
Volatile 

phenols 

sulfur 

dioxide 

Nitrogen 

oxides 

Smoke 

(powder) 

dust 

Shanxi 18.07 57.31 52.10 43.36 

Anhui 12.35 23.54 49.00 28.08 

Jiangxi 6.17 21.55 35.54 27.95 

Henan 2.36 28.63 66.29 22.34 

Hubei 5.36 22.01 37.67 18.80 

Hunan 3.61 21.46 36.47 20.71 

3.2. The Relationship Between Enterprise 
Development and The Following Factors 

(1) Descriptive analysis. 

In this paper, 104 valid samples were analyzed by stata15.0. 

According to the data in Table 2, the average growth rate of 

operating profit is -0.0334, indicating that the overall growth 

rate of operating profit of the sample enterprises selected in 

Shanxi coal industry is negative and the enterprise 

development is relatively poor. The average value of 

enterprise asset liability ratio is 0.6080 and the median is 

0.4787, indicating that the enterprise asset liability ratio is at 

a relatively high level. The minimum value of enterprise scale 

is 15.8903 and the maximum value is 24.7419, indicating that 

the sample enterprise scale is different and the sample set is 

representative. The average return on total assets is 0.0305, 

the median is 0.0128, and the profitability is positive, 

indicating that the development of enterprises under the 

transformation of resource-based economy has made some 

progress. The fund utilization rate and fund share rate are 

positive on the whole, but they are still negative in many years, 

indicating that there is still a large deviation in the use of 

funds. In terms of technical scale indicators, the average value 

is 1.0023 and the minimum value is 0.7961, indicating that 

although many enterprises have carried out technology R & 

D and achieved certain results, most enterprises are limited by 

capital and have low investment or effectiveness in 

technology. The average value of financial leverage index is 

1.8137, while the maximum value has reached 21.1273. 

Therefore, enterprises generally have large financing risks, 

indicating that enterprises' financing strategies are improperly 

used and there are many problems. (Table 5) 

(2) Regression analysis. 

Firstly, the Hausman test is used to test the specific model 

that should be adopted. The results show that the fixed effect 

model is suitable for this paper. It can be seen from table 3 

model 1 that the goodness of fit of the model is 73.72%, the 

F value is 246.99, and the p value in the table is 0.0000, which 

shows that the overall model is significant within 1%. From 

the above data analysis, it can be seen that the model has a 

certain significance of empirical research and interpretation, 

and can be used as the research demonstration of this paper. 

The average capital cost in the analysis table has a p value of 

0.006, indicating that it is significant at the 1% level. As the 

explanatory variable of this paper is the growth rate of 

operating profit, it shows that there is a significant correlation 

between the development of Shanxi coal industry under the 

transformation of resource-based economy and the average 

capital cost of enterprises. This paper is H1, which shows that 

the follow-up research is of certain significance. Secondly, 

according to the coefficient of average capital cost of model 

1 in Table 3, its value is -3.4930, which is negative, indicating 

that there is not only a significant correlation between the 

development of Shanxi coal industry under the transformation 

of resource-based economy and the average capital cost of 

enterprises, but also a negative correlation, that is, the lower 

the average capital cost of enterprises, the more conducive to 

the development of enterprises. Therefore, the correctness of 

H2 in the selected sample enterprises can be obtained. 

According to model 2 in Table 3, the goodness of fit of the 

model is 38.08%, the F value is 127.36 and the p value is 

0.0000, indicating that the model is significant at 1%, which 

has certain significance for empirical research and 

interpretation. Firstly, the p value of asset liability ratio is 

0.008, indicating that it is significant at the level of 1%, and 

the significance is high. The relevant conclusions are 

persuasive. Secondly, the coefficient of asset liability ratio in 

the table is 12.3359, which is positive, indicating that there is 

a significant positive correlation between enterprise 

transformation and development and enterprise asset liability 

ratio, that is, the improvement of asset liability ratio of 

selected sample enterprises will promote enterprise 

development. According to this conclusion, it can be 

concluded that although Shanxi coal industry enterprises are 

in a recession, according to the life cycle theory, they are 

suitable to adopt the contraction financing strategy, but the 

proposal of resource-based economic transformation policy 

can help enterprises break through the recession and move 

towards a new round of growth. Therefore, under a certain 

ability and risk level, enterprises should appropriately 

increase debt financing, appropriately adjust and increase the 

amount of financing, and choose a high defense financing 

strategy. Therefore, H3 is proved in this paper. (Table 6) 

(3) Robustness test.  

In order to ensure the accuracy of the research results, this 

paper uses the equity liability ratio as the measurement index 

of enterprise financing strategy to analyze its relationship 

with enterprise operating profit growth rate. After Stata 

analysis, the equity liability ratio is significant at the level of 

1%. Therefore, the results obtained by using the equity 

liability ratio are significant. Therefore, the above analysis 

results have certain empirical significance, and the data 

analysis of this paper has a certain basis to verify the 

correctness of this hypothesis. 



 

388 

4. Summary, Conclusions, 
Recommendations 

4.1. Summary 

Driven by the general situation, if Shanxi enterprises want 

to survive and develop continuously, they must clarify the 

challenges of the severe situation of the external coal industry 

to the enterprises. Firstly, the problem of overcapacity in 

Shanxi coal industry has seriously affected the financing 

effect. Enterprises raise funds for the production of coal 

products, but the imbalance between supply and demand 

leads to the accumulation of some products, which makes the 

capital of enterprises unable to turnover, and the capital 

recovery rate of many enterprises is poor; Secondly, many 

enterprises have serious financing difficulties. This is because 

enterprises do not have specific practical conditions for debt 

financing and no good investment projects during the 

recession, so their external financing ability is low; Finally, 

the coal industry has been in recession for a long time. 

Combined with the current transformation and development 

situation of resource-based economy, enterprises are in the 

early stage of transformation, and their development is 

different from the general start-up period. Therefore, under 

such special circumstances, enterprises need to have the 

optimal financing strategy, obtain the maximum amount of 

funds with the minimum financing cost, provide financial 

guarantee for the sound development of enterprises, and lay 

the foundation for the success of transformation in the period 

of recession. 

4.2. Conclusions 

Through the research on the financing strategy of 

enterprises under the transformation and development of 

resource-based economy in Shanxi coal industry, the 

following conclusions are drawn:  

(1) Although Shanxi's coal industry has developed under 

the transformation of a resource-based economy, the overall 

development status is relatively poor.  

(2) There is a negative correlation between enterprise 

development and its average cost of capital. When the average 

cost of capital is low, the effect of the implementation of the 

corporate financing strategy is better, which can promote the 

rapid development of the enterprise.  

(3) There is a positive correlation between the development 

of an enterprise and its asset-liability ratio. In terms of 

specific financing strategies, the Shanxi coal industry should 

appropriately increase the existing debt-to-asset ratio, 

increase debt financing, and choose a high-defense financing 

strategy under the transformation of a resource-based 

economy, so that enterprises can have sufficient funds to cope 

with the transformation and enable enterprises to enter A new 

round of growth. 

According to the above research, companies should aim to 

reduce the average cost of capital, increase debt financing 

appropriately, and complete corporate financing at low cost 

and efficiently. 

4.3. Recommendations 

The suggestions for companies:  

(1) Adjust the capital structure, and reasonably allocate the 

proportion of corporate equity financing and debt financing 

according to the specific conditions of the enterprise.  

(2) Maintain financial flexibility, so that enterprises can 

quickly and efficiently adjust the capital structure to achieve 

the optimal capital structure.  

(3) Appropriately increase debt financing, adopt a high-

defense financing strategy, increase financing, and provide a 

capital base for enterprises.  

(4) Strictly control the cost of each link, so that the funds 

raised can be used in places that can really promote the 

development of the enterprise. 

(5) Make full use of the diversification of equity financing 

to carry out appropriate equity financing, avoid excessive 

debt financing and generate excessive debt ratio, which 

makes the financial risk of the enterprise high.  

4.4. Suggestions for the Government's Fiscal 
Policy:  

(1) Promote the optimization and upgrading of industrial 

structure as a traditional pillar industry in Shanxi, the coal 

industry still has a great impact on the province's economic 

development and fiscal revenue. We should further improve 

fiscal and taxation policies, support the upgrading and 

transformation of traditional industries, give enterprises 

preferential tax rates, increase expenditures and other tax 

incentives, and increase the enthusiasm of enterprises to carry 

out technological research and development and 

transformation activities. Strengthen the guidance and policy 

promotion for the development of the clean coal industry, 

promote the rapid development of coal deep processing 

industries such as coal chemical industry and coal bed 

methane, and enhance the government's comprehensive 

decision-making and coordination capabilities in the 

development of the coal industry, resource utilization and 

ecological environment protection. Increase investment in 

high-tech applications and accelerate the mutual grafting of 

traditional industries with new technologies, new processes, 

and new models. Promote the high-quality development of 

strategic emerging industries and strive to create a diversified 

industrial system. Relying on the existing foundation and 

advantages of emerging potential industries such as 

equipment manufacturing, new materials, and biomedicine, 

accelerate the occupation of high-end industries, form new 

advantageous industries, and promote the improvement of the 

quality of the province's economic structure. Encourage 

social funds and entrepreneurial venture capital to support 

emerging industries, through the use of government 

procurement, financial subsidies and other financial 

expenditure methods and improve the risk investment 

mechanism, to share the high operating risks, huge capital 

needs, financing difficulties and fierce market competition for 

emerging industries and other issues.  

(2) Support the healthy development of the private 

economy Whether the private economy is developed or not 

reflects the economic vitality of a region to a large extent. To 

promote the accelerated development of the private economy, 

it is necessary to make better use of the government's public 

service functions, continuously innovate around the 

outstanding problems in the development of the private 

economy, and form a fiscal and taxation policy system that is 

conducive to the development of the private economy. It is 

recommended to comprehensively use financial tools to 

support the development of private enterprises, such as 

adopting direct financial investment to prevent and defuse the 

liquidity risk of private enterprises, adopting capital injection 

to improve the level of financing re-guarantee, adopting fiscal 

rewards and subsidies to promote the transformation and 

upgrading of private enterprises, and adopting tax reduction 



 

389 

Ways to reduce the burden on enterprises, adopt government 

procurement, guide private enterprises to participate in PPP, 

and expand market share for private enterprises.  

(3) Guide enterprises to innovate independently Enhancing 

the ability of independent innovation is a strategic measure 

and an important guarantee for promoting the transformation 

and development of Shanxi's resource-based economy. In 

order to fully stimulate the initiative of enterprises in 

independent research and development and technological 

innovation, the allocation of financial technology resources 

should be further optimized, and the fiscal expenditure policy 

should be gradually transformed from a preferential type to 

an incentive type. The first is to give play to the guiding role 

of financial investment in science and technology, and for 

high-growth enterprises engaged in the development of 

strategic emerging industries, explore ways such as subsidies 

or rewards and subsidies after the investment of enterprise 

research and development funds to guide and encourage 

enterprises to increase investment in science and technology. 

The second is to give play to the incentive effect of 

preferential policies that support enterprises’ independent 

innovation to encourage high-tech enterprises to use the 

income tax deductions and exemptions they enjoy when 

implementing the pre-tax deduction policy for research and 

development expenses. Research and innovation activities. 

The third is to improve the guiding support, stability support, 

post-subsidy and rewards, and actively construct and optimize 

the cooperation mechanism of industry, academia, and 

research, and promote enterprises to create technological 

innovation mechanisms and scientific and technological 

foundation platforms to improve their innovation capabilities. 

(4) Increase the accumulation of technology and talent 

elements The inclination of finance to science and technology, 

culture and education can effectively promote the 

accumulation of key elements such as technology and talents, 

thereby affecting production methods and efficiency, and 

forming potential advantages and sustained momentum for 

the transformation and development of resource-based 

regions. Shanxi should further improve the mechanism for the 

steady growth of financial investment in science and 

technology and make investment in science and technology 

the focus of financial budget guarantees at all levels to 

provide adequate funding guarantees for technological 

development. Strengthen support for the research and 

development of major technologies and key technologies that 

support the transformation of the resource-based economy, 

and strive to achieve the national leading level in research and 

development investment in advantageous industries such as 

coal science and engineering, equipment manufacturing and 

strategic emerging industries. Promote the establishment of 

various joint funds for innovation and development and 

strengthen the innovation of financial technology investment 

methods. Establish and improve a growth mechanism linking 

fiscal education expenditure to total fiscal expenditure and 

GDP, improve the structure of education investment, focus on 

the coordinated development of basic education and higher 

education, and the professionalism of disciplines, and 

promote the improvement of the overall quality of the labor 

force. Strengthen the introduction of high-level talents and 

teams, innovate the use of various provincial talent special 

funds, focus on the key areas of Shanxi's industrial 

development, adopt the "industrial capital + human capital" 

model, and actively introduce domestic and foreign enterprise 

groups and multinational companies, and strive to Introduce 

its core R&D team or establish branches.  

(5) Optimize the ecological environment The destruction of 

the ecological environment is a prominent problem faced by 

the resource-based economy, and it is also a major factor 

hindering the sustainable development of the economy. 

Shanxi should firmly establish the concept of ecological 

priority, further strengthen the management and protection of 

the ecological environments, and strengthen ecological 

restoration and improvement. Establish a long-term financial 

investment mechanism, increase the financial budget for the 

construction of ecological civilization, and innovate the 

budget management mechanism, so that the budgetary funds 

will be tilted towards the fight against pollution and ensure 

that the financial investment matches the key tasks of the 

construction of ecological civilization. Set up a large-scale 

environmental protection special fund, focusing on the 

comprehensive treatment of air, water, soil and other 

environmental pollution and major environmental 

infrastructure construction projects. Make areas with 

important ecological functions and ecologically fragile and 

sensitive areas as key ecological protection areas, increase 

capital investment in key ecological protection areas, and 

ensure sufficient funds for each key protection area. 

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