China’s Economy – At a Cost

litbonanza.jpgAs China’s rapid economic expansion grows, it leaves a legacy of serious environmental degradation. Industrialization and urbanization in the country endured an absence of effective or enforced regulations. This has lead to catastrophic effects on the global environment and human health. While China can boast growth at a dashing pace, the elephant in the room is the toll all this is having on its environmental well-being. Reversing the damage is not so simple and requires resolution on many fronts.

As the world’s fourth largest nation, there is an incredible variety in China’s natural habitat including mountains, rivers, lakes, a vast coast line and more. Many varieties of ecosystems can be found, from glaciers to rainforests. China’s population is an astounding 1.3 billion and only recently has the population growth rate slowed down. China’s economy is third by gross GDP and has a high growth rate at three times that of the global average. With increasing affluence, there is increasing urbanization of the population as well as increasing consumption in agriculture and aquaculture. The many political movements in its recent history saw large deforestations and erosions, and this has only accelerated with industrialization.

A direct manner to survey the environmental impact is to observe the devastating effects from the pollution on human habitat. China’s habitable land has halved in the last fifty years due to erosion and water loss, and currently, a third of the country is affected by acid rain. Many rural residents have no access to clean water and their urban counter parts are affected by polluted air. The Chinese government does not allow publication of data connecting pollution and its role in human health. Nevertheless, a 2006 World Bank study done with the State Environment Protection Agency, the national environmental agency, concluded that outdoor air pollution was causal of upwards of 400,000 deaths each year. Meanwhile, 60,000 died from diarrhoea, bladder and stomach cancer and other diseases that can be caused by water-borne pollution. The World Health Organization data also agreed with the World Bank data on the total pollution death toll at around 750,000 a year.

China relies heavily on coal as a major source of energy. Furthermore, an expansion of automobile usage in the recent years has lead to even more air pollution in cities. Emissions of sulphur and carbon dioxide from coal and gas has repercussions in affecting global warming, although greater imperatives are the related cardiovascular and respiratory problems individuals suffer from. In fact, only one percent of China’s urban population breathes clean air as defined by the European Union. In a recent trip to Beijing, it was a shocking sight to see the perpetual grey haze in the sky. It certainly does not take statistics to realize that ambient pollution is a huge problem. In addition, soil erosion affects nineteen percent of China’s land. This threatens food security in reducing agricultural space as well as further reducing biodiversity and natural green space. Also challenging is the issue of water accessibility. While southern China is wet, northern China threatens to become the world’s biggest desert. However, instead of instilling conservational attitudes, as water still remains an inexpensive resource by global standards, China has instead undertaken ambitious engineering projects to form networks of water transportation. Meanwhile, industrial waste and runoffs are increasing, leaving nearly five hundred million citizens without access to clean, treated water.

China has based its growth on immense energy consumption. This can be traced back to 1997. Chinese officials created an economic stimulus program in light of the recession faced by East Asian countries. State financing and tax incentives supported industrialization efforts and were highly successful. In one decade, China’s global steel production jumped from thirteen percent to thirty five percent. Also, China is now responsible for half of the global cement and glass production, and about a third of the aluminium production. In 2006, China was the second-largest producer of cars and trucks behind United States, surpassing Japan. The increase in production is notable in terms of environmental impact, but the energetic needs from industries is further compounded as the development was rapid and the industrial plants were not designed with efficiency and pollution control as priority. Only recently have certain industries increased efficiency due to foreign competition, but otherwise factories perform poorly compared with Western counterparts. Chinese steel makers use one-fifth more energy than the international average. Cement manufacturers require 45 percent more power, and ethylene producers require 70 percent more than producers elsewhere, and Chinese paper production consumes twice as much water. In addition, in the recent years, China has built around 7.5 billion square feet of commercial and residential space per year. These buildings rarely have thermal insulation and require twice the energy to heat and cool as buildings in similar climates in the West. In fact, ninety five percent of new buildings do not meet China’s own codes for energy efficiency.

Chinese leaders are beginning to recognize the need to change directions. Entrance into the WTO and the upcoming Olympic games has increased the attention upon environmental impact. Certainly, if not for the environment or human condition, at least the costs of economic growth from environmental clean up reaches almost ten percent of the national GDP as reported by the State Council. Future repercussions are even more worrying as factories could be shut down from water shortages. In addition, contaminated water and fields are provoking riots and social unrest in some areas. Last year, the government has increased its environmental protection budget by sixty percent, and set highly progressive goals of air pollution reduction by ten percent and increasing energy efficiency by twenty percent. There are greater initiatives to deal with illegal and heavily polluting factories. President Hu JinTao initiated an ambitious projected known as “Green GDP” which recalculated the GDP taking account of the cost of pollution. Preliminary results showed that in some provinces, the growth rates after adjustment was reduced to almost zero. The project was subsequently abandoned, citing calculation inaccuracies as the reason. Another effort, the Grain to Green programme offers subsidies to farmers who convert cropland to forest or grasslands, and it has yielded excellent results, making it one of the largest conservation programmes in the world.

Even so, the inherent governmental structure itself is designed for economic success but impedes environmental protection. Since the 1980s, China’s economic strategy has been to decentralize. Crown enterprises have been partially privatized, and provincial government gained more autonomy. Economically, this strategy has been wildly beneficial. However, this means that the central government can no longer set regulations that will reach everyone, and it has a lack of ability to enforce them. Therefore, although laws are made through the central government, it is the local government who are responsible for the follow through. As these officials are reliant upon tax revenue, often from polluters, shutting them down is not of interest. The breakdown in governance is significant enough that a 2002 target to reduce sulphur emissions by ten percent in three years met instead with an emission increase of thirty percent.

In the government, energy and environmental officials have little influence in the bureaucracy. The Energy Bureau of the National Development and Reform Commission, the country’s central planning agency, has 100 full-time staff members. The Energy Department of the United States has 110,000 employees. Instead, China does have amateur environmentalists who expose pollution and press local government officials to enforce environmental laws. The government first allowed NGOs in 1994. Subsequently, grass root green groups have emerged under this status. Their impact is surprisingly effective. One such is the Global Environment Institute, which played a key role in Beijing adopting rapid transit bus lanes. Another occasion is when green groups opposed damming of the Nu river, the project was suspended pending environmental review. Of course, as effective as the role of this movement plays, individuals and NGOs risk arrest and persecution whenever the fine line between advocacy and political agitation is crossed. Recently, environmental organizers have been prosecuted or received warnings to tone down their criticism of local officials. A reason cited for this was the need for social stability before the 2008 Olympics.

To put things into perspective, China’s current energy consumption per unit GDP is seven times that of Japan, six times that of America, and 2.8 times that of India. Nevertheless, China also blames other countries as participants in their pollution – after all, the cheaper products manufactured in China eventually line the shelves of North American and European stores. As well, a precedent was set by Japan, the US, and Britain who have respectively polluted to prosperity. Their environmental concerns arrived after economic maturity when their urban middle class demanded clean air and water. Furthermore, United States opposes a mandatory cap on its emissions, like China. China has maintained that the onus is on established industrial powers to act first since their wealth was largely built by burning fossil fuels and adding to greenhouse gases. Therefore, it is difficult to specifically antagonize China for its pollution, especially in light of the consumption of other industrialized countries. Meanwhile, the US, with less than five percent of the world’s population, requires a quarter of the world’s bio-capacity to support itself. Europe and Japan, with ten percent of the world’s population, require another quarter. China and India, with about forty percent, require another quarter. It is quite evident that on a per capita basis, China seems much less culpable on a global front. Although this can also be ominous in indicating that China still has greater room to expand in terms of pollution.

To reverse this trend of environmental detriment, many aspects must be confronted. Firstly, the government structure which almost encourages polluting industries needs to be reformed. The burden cannot be placed upon NGOs to make strides when the government has freedom to restrain them at their convenience. While an entire conversion back to centralized government may not be effective either, greater emphasis upon a governmental environment protection agency would hold official power and recognition. Also, market tools can be used on readjusting for different resources; providing incentives for more efficient fuel or detracting subsidies from environmentally damaging industries, imposing greater environment taxes and setting a fairer price for water. An investment in educating the public should also be undertaken. Enforcing the merits of biodiversity and increasing awareness will reduce the human burden on sensitive ecosystems and promote greater initiatives in efficiency.

It is difficult to predict the outcome of the balance between deficiencies in China’s environmental policies and its recent improvements. It is evident though, that with its large population and economy, the impact of any policy will be huge, positive or negative.

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Joann is a 4th year Undergraduate in the Cell Biology and Genetics Program. She enjoys many topics in the realm of biology including evolution, vertebrate biology, health and other fun things. She is currently involved with the Sexual Health Team at the UBC Wellness Centre. Also, she doesn't like to brag but her Chinese culinary skills are pretty good.