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Why did Shanxi decline in modern times?
Mankind has entered the agricultural civilization. Are those places easy to develop? Warm and humid (about 30 degrees north latitude, semi-humid areas with precipitation of 400-800, related to the initial domestication conditions of crops), with certain ups and downs in terrain (swamps are difficult to develop, and drainage is a large-scale project) and fertile soil (flooding). Where are the areas in China that meet these requirements? The most concentrated areas are Fenhe River Basin and Weihe River Basin, that is, Shanxi and Guanzhong, which is why Jin and Qin were the strongest in the Spring and Autumn Period and the Warring States Period (this order of strength is also related to regional geographical conditions). In the following Millennium, the adaptability of crops relaxed (for latitude and precipitation), the drainage in North China Plain gradually developed, and the economic center shifted greatly.

As for Shanxi's position in China, it's not that important. After all, at the provincial level, location is not enough to affect the overall importance. Similarly, after crops adapted to the cold climate, the Central European Plain was developed, and the center of Europe shifted from Italy and Spain to Britain, France and Germany. On a large scale, agricultural productivity is always the decisive factor, especially for the society before the industrial revolution. Even after the industrial revolution, agricultural productivity is still the core factor affecting regional development, except for coastal areas, which can be compensated by low transportation costs.