Week Ended: November 2, 2007

The Push for a Greener China

As all eyes turn to China as it prepares for the much anticipated 2008 Beijing Olympics, the world can't help but notice the air quality within the host city, and wonder how the country intends to resolve its problem of "chronic pollution".

Indeed, following nearly three decades of economic progress and industrialization, China's economic landscape is booming with activity. However, this growth has not come cheaply. According to numerous well-published reports, environmental pollution in China has reached alarming levels. In most cities, air pollution, largely a product of sulfur and green house gas emissions, can be seen by the naked eye. Seventy percent of Chinese cities do not meet the World Health Organization's air quality standards. Water pollution, caused by illegal dumping of untreated water or sewage, has left over half of the seven main rivers to be unfit for human consumption. China's available water resources per capita are a mere one-fourth of global standards, underscoring the scarcity of potable water. Land pollution and acid rain are leading to wasteland formation that is reducing the arable land available throughout the country.¹

According to the World Bank, China is now home to 16 of the world's 20 most polluted cities and that may be the result of poor environmental planning and enforcement. However, these environmental problems are certainly not new or unique to China. Neighboring India is facing its own set of problems with its water sources, some of which contain deadly levels of chemicals and industrial by-products. This period of growth for China's economy also draws similarities to the industrial revolution in both the United States and the United Kingdom. Both of those countries experienced water pollution that led to epidemics of typhoid and cholera, as well as air pollution resulting in thick smog.

As pollution takes a greater toll in China, the country is taking progressive steps toward a greener country. In 1998, the State Environmental Protection Agency (SEPA) was established to tackle the country's environmental issues and its role in the economy has been growing in importance over the past decade. In its 11th Five Year Plan (2006-2010), the Chinese government placed environmental protection as its top priority. The plan targets reducing energy consumption as a percent of GDP by 20% and generating 10% of energy needs from renewable sources by 2020. It has also pledged to reduce the total discharge of major pollutants by 10% in 2010.²

In efforts to deliver on its promise of a "Green Olympics", Chinese authorities have made plans to relocate polluting industries from the nearby Beijing areas, enforce stricter emissions standards for vehicles, reduce the number of cars on the road and undertake reforestation in the city. An estimated US$12 billion has been spent on environmental clean up since China won the bid for the games six years ago.³ However, many still are concerned about the air conditions in the capital city.

While concerted efforts have been made regarding its environmental issues, China still struggles with striking a balance between its continued economic growth and its environmental concerns. We expect that finding the right balance will continue to pose a challenge to China for the foreseeable future.

Sources:
¹ World Health Organization
² SEPA
³ The Wall Street Journal

 

 

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The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Matthews does not accept any liability for losses either direct or consequential caused by the use of this information.