Outflowing 'mining' cash triggers concerns (4)

In the RCB of Lucheng City, over half of the equity is held by three former coal owners.

But there are people hesitating to try out new projects.

Pan Yun, deputy dean of Shanxi Academy of Social Sciences, said some sideliners have hesitated to enter unfamiliar industries, and the rest are satisfied with living off their bank interest.

A report jointly issued by Gaohe Capital and the policy center of the Ministry of Housing and Urban-Rural Development in July suggested that there were signs of capital flight in Shanxi due to the shrinking coal market.

The report said coal barons prefer to focus on real estate, or speculate in stock markets in places such as Beijing, Zhejiang and Guangdong.

The government should guide the rational flow of capital to promote the development of the local economy, a lack of regulation of the money will place great pressure on social and financial stability, said Guo Baomin, vice president of Taiyuan branch of People's Bank of China.

Guo said the government should further promote financial renovation to maintain and increase the value of capital, and to encourage the micro financing firms to direct capital into the real economies.

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