WRI partnered with Chinese provincial decision-makers, policy institutes, coal companies and communities to shift Shanxi’s economic focus from coal production to tourism. The project ultimately created more than 1,000 jobs for displaced coal workers.

The Challenge 

Shanxi is China’s largest coal-producing province, accounting for roughly one-third of the country’s coal production and employing nearly one-quarter of its coal workers. Its economy is deeply dependent on coal, which contributes 73% of local tax revenue and 45% of industrial employment.

As China shifts away from fossil fuels to achieve its decarbonization goals, Shanxi’s coal-dependent economy poses complex challenges for its workers and the community. Local governments focused on maintaining economic stability, coal companies eager to explore low-carbon business models, and workers accustomed to relatively high mining wages are navigating how to survive the transition to cleaner energy. The central challenge is how Shanxi can protect jobs, its economy and communities.

WRI’s Role

WRI worked with Shanxi’s provincial leaders to support an inclusive low-carbon shift — one that ensures coal workers are not left behind as the economy diversifies beyond coal.  This required both a top-down and bottom-up approach. WRI collaborated with local governments to produce research underscoring the importance and urgency of the coal transition. We also partnered with coal companies, coal communities, research institutes, and other stakeholders to explore a “coal-to-tourism” business model that encourages coal workers to proactively move into the service sector.

WRI surveyed 56 national experts and conducted in-depth interviews with local officials, coal companies, workers and affected communities. This research helped to identify risks, priorities and viable transition options. WRI also helped connect provincial leaders with national institutions and global expertise to strengthen policy design.

The Outcome

In 2024, Shanxi began transitioning its coal-dependent economy to a more diversified one, with tourism as a key pillar. The province converted mining areas into tourism destinations featuring nature and historical sites.

More than 1,000 displaced coal workers transitioned into tourism-related jobs such as tour guides, heritage restoration assistants and bus drivers. Households near new tourism sites saw annual incomes increase by 10%-20% due to increased economic activity and rental incomes.

The Shanxi coal-to-tourism model has since gained national recognition. It’s now being adopted by Shaanxi, Inner Mongolia and Xinjiang provinces. National planning institutions have also endorsed the approach and are considering incorporating similar recommendations into the coal sector’s next five-year development plan.

During this process, Shanxi also became the first Chinese province to formally integrate the principles of a “just transition” into its government workplan. The principles emphasize the importance of inclusion and equity in shifting workers to a green economy.