Progress Inhibited in Polluted Atmosphere
by Elizabeth Economy
South China Morning Post

For decades, China's leaders have been willing to ravage their natural environment for the sake of spectacular rates of economic growth. The devastating Yangtze River floods of 1998, however, appear to have served as a wake up call for the traditionally environmentally unconcerned Chinese leadership: such practices are simply not sustainable. In the aftermath of the floods, there has been a dramatic increase in mainland rhetoric concerning the need for more investment in environmental protection.


Such a shift in thinking has come none too soon. This year's State of the Environment Report paints a grim picture. During 1998, China was plagued by a number of environmental disasters; illegal logging continued to devastate the nation's forests, leaving it with a per capita forest stock volume among the world's lowest; industry and development encroaching on precious agricultural land, despite the best efforts of the government; and air pollution levels in premier cities such as Shanghai and Beijing among the worst in the world.

In practical terms this pollution has several consequences. First, the health of the population is endangered. According to mainland researchers, tens of thousands die prematurely from pollution related illnesses annually, and approximately 60 million people find it difficult to regularly access clean water.

Second, pollution is expensive. The World Bank has estimated that the cost to the central government of air and water pollution is US$54 billion (HK$420 billion) per year, or about eight per cent of Gross Domestic Product (GDP). When combined with shortages of resources such as water, some experts increase the cost of environmental degradation to 12 per cent of GDP. The greatest cost is in the health and productivity losses associated with urban air pollution, which the Bank estimates at more than US$20 billion, and which may rise to US$98 billion by 2020 unless there is significant intervention.

Third, mainland leaders face growing popular protests over pollution-spewing factories which destroy the livelihood of fisherman and farmers and taint underground domestic water supplies.

Finally, China's pollution harms the world. Its emission of sulphur dioxide from the burning of coal has irritated its neighbours in Japan and South Korea, where acid rain is damaging the land. By 2025, China's developmental practices will also lead it to surpass the United States as the world's largest contributor to the greatest global environmental threat, climate change.

Chinese leaders have traditionally responded to these challenges in two ways. First, they have opened the political space for participation in environmental protection. They have permitted the establishment of genuine non-governmental organisations (NGOs) to promote education, recycling, reforestation and other environmental public works projects. Some NGOs, such as the Beijing Environment and Development Institute, are well known internationally for their efforts to develop new and innovative financial mechanisms for responding to environmental degradation.

Still others, such as Friends of Nature, have begun to serve as watchdog organisations, reporting on the failure of local officials to implement central directives. Radio call-in shows, television programmes, and the newspaper, China Environmental News all have been instrumental in letting Beijing know what citizens need and want, as well as in exposing local corruption.

There has also been a nascent movement within the general populace to bring suits against local officials and enterprises for failure to observe these laws. Last year, for the first time, the head of a Chinese enterprise was sentenced to two years in jail for pollution-related crimes.

Second, Chinese leaders have utilised the international community as a source of funding for their environmental protection efforts. International assistance has proved critical to China's abilities to address its environmental problems. China is the largest recipient of World Bank, Asian Development Bank, and Japanese environmental assistance. In 1998, for example, World Bank lending to China for the environment totalled US$350 million.

Yet, more needs to be done. Even the most optimistic estimates of future Chinese Government investment in environmental protection hover around 1.2 per cent - still a substantial increase from the 0.8 per cent of previous years, but far from the two per cent mainland scientists have argued is necessary merely to keep the situation from getting worse.

Beijing has called on local governments to take greater initiative in cleaning up their environs. As economic growth slows in many parts of the country, however, local officials are more likely to place their priority on keeping workers employed rather than on insisting that firms implement new environmental protection measures or, indeed, close enterprises down.

In a period of economic downturn, the extensive plans outlined by the central government to improve the environmental infrastructure by building reservoirs, sewage treatment plants, pollution monitoring, and flood control stations may also fall by the wayside.

Perhaps most significantly, the Beijing leadership has failed to recognise the need for greater investment in human capital. While well-conceived laws are an important first step, implementation depends on a well-trained and well-financed environmental protection bureaucracy. Prior to the 1998 administrative reforms, China's full time and part time government environment agency staff totalled about 600. In the wake of bureaucratic downsizing, the staff number was cut in half.

The United States Environmental Protection Agency, in contrast, has almost 6,000 such staff. The situation is even more desperate in many localities throughout the country, where not only is the number of environmental officials small but their training, education, and power is far weaker than at national level.

Mainland environmental practices over the past several decades have had devastating consequences for its people and its long-term growth potential. While the central leadership has tried to redress environmental problems through campaigns, exhortations, and laws, it has proved unwilling to undertake the difficult steps necessary to effect real change.

Whether or not the recent shift in rhetoric is to be believed, it is clear that without substantial new investment in both human and physical capital to protect the environment, both the welfare of the Chinese people and the prospects for future economic growth in China will suffer.

Elizabeth Economy is Senior Fellow for China at the US think-tank, the Council on Foreign Relations.