Chapter 2 opens with a description of mineral resource distribution and the development of mining industries in reform-era China. It then examines the impacts of resource endowment on local economic development, with a focus on capital accumulation and investment. Through qualititative studies on mining entrepreneurs and statistical analysis on Chinese provinces, it shows that resource boom in general benefits capital by not only boosting capital accumulation in the mining industries but also generating positive spillover effects on other industrial sectors, especially those labor-intensive ones. However, resource-generated capital tends to impede the investment in high-tech industries and induce speculative investment in real estate, which may discourage industrial upgrading and undermine economic growth in the long run. Therefore, resource boom has rather mixed effects on local economic development.

In contrast to the benefits that capital enjoys, Chapter 3 shows in detail the largely negative impacts of mineral extraction on labor. Based on qualitative evidence on the working conditions and employment opportunties in mining industries, it reveals that resource boom in general does not benefit common citizens as the labor force. Moreover, mining industries generate various negative externalities to local communities, which impose heavy financial and health costs on local citizens. Statistical analysis corroborates the empirical observations and shows that resource abundance diminishes employment opportunities in not only high-tech but also labor-intensive industrial sectors and represses labor income in both urban and rural areas. The findings suggest that the resource sector can be characterized as pro-capital and anti-labor, which generates profound implications for social equality and stability.