Portrait of an Olympic Host -- China: economic powerhouse,
environmentally unsustainable - part one /Pan Yue

China: economic powerhouse, environmentally unsustainable - part one

http://www.onlineopinion.com.au/view.asp?article=6143

By Pan Yue - posted Tuesday, 24 July 2007

China's development has had a tumultuous history. Now is the time for a
fair and sustainable model of growth.

What do we mean by the phrase “green China”? We mean a China that is
sustainable, democratic, fair, harmonious and socialist. This conclusion
has been reached after many years of struggle. Each word is the
distillation of the blood, sweat and tears of several generations. We
want to build a green China because green is the colour of life, of
sustainability. For something to be called “green” it has to be
sustainable - and currently China has yet to achieve sustainability.

The model of economic development that we are currently pursuing is
unsustainable. Our energy consumption per unit of GDP is seven times
that of Japan, six times that of America, and even 2.8 times that of
India. China's labour productivity is less than 10 per cent of the world
total, and yet our emissions are over 10 times higher than the global
average.

China's current supplies of energy and natural resources are
unsustainable. Soil erosion and water loss mean that in the last 50
years, the area of habitable land has halved. We currently have 45 main
sources of minerals, but in 15 years only six will remain. Within five
years, 60 per cent of our oil will be imported.

China's environment is unsustainable. One-third of China's land mass is
affected by acid rain. Over 300 million rural residents have no access
to clean drinking water. One-third of urban residents breathe heavily
polluted air. Thanks to the traditional model of economic development -
which is energy intensive, heavily polluting and relies on high levels
of consumption - China has become the world's largest consumer of water,
largest emitter of waste water and one of the three areas in the world
worst affected by acid rain.

Our current society is unsustainable. In 2003 China crossed a “safe
boundary” on the Gini coefficient - a measure of inequality of
distribution of income - which means that China was classified as having
“very unequal wealth distribution”. The World Bank has said that no
other country has seen such a large income disparity emerge in just 15
years. For so long we criticised capitalism for being unsustainable,
unfair and unequal, but if our socialism cannot solve problems of social
inequality, then how can we claim our system is superior?

We have arrived at this point because we made biased decisions when
choosing development strategies. In the 1950s we imitated the Soviets by
developing heavy industry. This may have laid the industrial foundation
for New China, but it was not entirely appropriate for a country that is
rich in labour but lacking in natural resources. In the 1980s we turned
in another direction, and learnt from Europe and the US by stimulating
economic growth with energy-intensive production and consumer
lifestyles. This extensive model of economic growth seeks to maximise
production levels and profit, but overlooks how resources are used - and
the damage done to the environment.

Before the reform period we followed an exclusively political model,
with class struggle as our guiding principle. We were unable to complete
the transition from revolutionary party to ruling party, and instigated
one political movement after another.

In the 25 years since the reforms, China has followed an exclusively
economic model. We are widely recognised as having achieved an economic
miracle, but we have paid an enormous price.

There has been a flaw in our thinking: the belief that the economy
decides everything. If the economy is booming, we thought, political
stability will follow; if the economy is booming, we hoped, people will
have enough to eat and live contented lives; if the economy is booming,
we believed, there will be money everywhere and materialism will be
enough to stave off the looming crises posed by our population,
resources, environment, society, economy and culture. But now it seems
this will not be enough. When these crises really hit us, a little
economic success will not be nearly enough to deal with them.

Development is a good thing in itself. But it must be integrated
development across all areas, not just economic development. Only
all-round, co-ordinated development is a good in itself. We have always
taken “development” to mean economic development alone, and this to mean
the simple accumulation of wealth. As a result, the pursuit of wealth
has become the sole aim of society.

In theory, the value of all resources is determined by the market price,
but the latent value of scarce resources such as land, water, the
environment, and biodiversity has been ignored. Many social resources
have been absorbed by projects designed to help people “get rich quick”.
Blind investment, continual rebuilding and a lifestyle based on massive
consumption have built up an enormous financial risk.

At the same time, the extreme worship of wealth has lead to a decline in
consideration for others and a breakdown in social ethics and values.
Affairs relating directly to the national economy and people's
livelihoods such as conservation, education and poverty alleviation have
been neglected. Disadvantaged groups have been marginalised, and the
poor have lost all moral support and sense of belonging. Moreover,
criminal forces and dangerous cults have expanded by taking advantage of
the situation.

The excessive pursuit of wealth means that disproportionate amounts of
political and economic resources are put into a small range of
industries closely related to economic growth. The intricate and complex
entanglement of the interests of government departments, various groups
and regions has seen an unprecedented increase in the pursuit of
short-term gain. This has become very common, and public interests,
including the environment, are often unscrupulously violated under the
banner of “development”.

As the short-term economic figures increase, so do the most serious
forms of injustice and corruption.
Four paths

There are four different ways of approaching the issue of environmental
protection: it can be seen as a specialised and isolated field in
itself, as an economic issue, as a political and sociological issue, or
- at the highest level - as a cultural and ethical issue. In China, we
have always looked at the environment as an isolated subject, whereas
abroad it is already being treated as a political and sociological issue.

In the last few years, the conflict between the environment and the
economy has become unprecedentedly intense - the environment has begun
to place limits on economic growth, and economic growth has destroyed
much of the environment; this has led to our conservation work being
rapidly elevated to the economic level.

However, the state still has no systematic policy framework on the issue
of the economy's confrontation with the environment, and has not
developed ways of thinking or cultural theories on the issue. There have
not been any fundamental changes, and the environmental protection
system has not caught up with the new “economic” way of looking at the
issue. On a global scale, the environment has long since moved on from
being an isolated problem - it is interrelated to all other issues.

So why is the environment considered an economic problem? Because damage
to the environment is seriously restricting economic growth. The World
Bank has calculated that currently between 8 per cent to13 per cent of
China's GDP goes towards paying environmental costs.

Lots of people think that we should wait until we have reached a higher
level of wealth and development, before setting about repairing the
damage we have done to the environment. The developed countries did
this, they say, so why can't China? The answer is that China's
population structure does not allow it. We do not have overseas colonies
and access to their environmental resources, and we do not have the same
advantage in terms of capital and technology.

The longer we wait, the harder it will be for economic success to pay
for damage done to the environment. If we stick to the current model of
development, then in 15 years our GDP will have increased four-fold, but
the pollution will have increased even faster. It is possible that
before we have built up enough of a material foundation, an
environmental crisis will have broken out, bringing with it other kinds
of crisis.

Everyone wants to perform well. If I was the mayor of a town, or the
head of a county, I would also see development and wealth creation as my
priority. Gross Domestic Product (GDP) is the main standard by which
good is measured, and the idea of “pollute now, clean-up later” has
become ingrained. The thinking behind this idea is that we can enjoy
life now, and the responsibility for clearing things up can be passed to
younger people 15 years from now.

But there is a flaw in this thinking: an ecological crisis is creeping
up on us much faster than we imagine, and those at risk are not later
generations, but ourselves. If the current model of economic development
is followed for another five years, the symptoms of the crisis will
become ever more apparent.

Everyone knows that we have to choose a new path: a third way that means
the environment and the economy will both benefit. This is the path of
clean production, a circular economy with new energy sources. Other
countries have already shown that these methods can be successful.
Western countries have abandoned earlier methods of production in favour
of ecologically sound industries.

Some may not be convinced that this is a good example for China to
follow, as these countries have benefited from primary accumulation and
300 years of environmental exploitation, but could Japan's experiences
hold lessons for us? Japan's balance of population and resources was
even less favourable than China's, but they have successfully built a
circular economy and society.

Those who are still not convinced should look at the example of South
Korea. By the time the country's per capita GDP had reached US$5,000,
South Korea had already solved its environmental problems. Even a
moderately developed country can remedy environmental problems that the
developed nations could only solve in the advanced stages of
development. There is still hope. Green production, clean technology,
sustainable consumption, green capital markets, stocks and shares and
green credit are all options that we can explore.

Under the market system, many public resources have no price. We make
assumptions that the earth's resources are limitless - that before
resources are extracted from the earth, they have no value. This has
been a historical limitation of traditional politics and economics.
Scarce resources such as water, coal, or biodiversity have no price. The
day that a pricing system for these resources is set up will be a day of
enormous change in economics.

Such a transition in our way of thinking about economic development
would be revolutionary for China. This is what we mean by a “green
economy”, and would be a prelude to the emergence of a new set of
environmental economic policies.
Injustice

Why is the environment considered a sociological issue? I have written
an article specifically addressing this issue called Environmental
Protection and Social Justice, and will not go into too much detail
here. Suffice to say that social injustice leads to environmental
injustice, which in turn leads to further social injustice, and a
vicious circle is set in motion. The result is disharmony throughout
society.

Here is a classic example of what should be called environmental
injustice: coal mine owners from Shanxi province indiscriminately
extract coal and dig up the land, creating pollution. As a result they
become extremely wealthy. Once they have polluted Shanxi, however, they
do not stay there. Instead they move to Beijing where they buy luxury
villas and push up house prices. They have also pushed up property
prices in all the coastal regions of north China.

If these areas then become polluted, they will no doubt move to the US,
Canada or Australia and cause inflation there too. They create
pollution, but are removed from its consequences. They take all the
benefits of polluting industries, but pay nothing towards the clean-up
costs.

Although the speed of our economic development has been high, the
rewards have not been fairly distributed. Power and wealth have flowed
towards the cities, the eastern regions and certain wealthy groups.
Rural residents, the western regions and the poor have become - in terms
of employment opportunities, education, healthcare and social security -
the losers in a dualistic system.

The environment has also lost out. Some people and regions “getting rich
first” has been achieved by sacrificing the environment of other people
and regions.

There is also the issue of social responsibility. What burden of
responsibility should be borne by the business people who got rich
first, the officials who have become powerful, and the groups who have
benefited the most? What form should this social responsibility take in
the fields of the environment and public affairs?

Not long ago I wrote an essay entitled Urging Chinese Business to Take
Environmental Responsibility. I suggested those people, regions,
industries, departments and cities that got rich first should take on
environmental responsibility, in order to narrow social divides and
assuage a series of social injustices. They need to understand that the
consequences of injustice are the same for rich and poor alike. We
always say that we are aiming for a “socialist market economy”, and this
is an excellent goal; it combines the efficiency demanded by the market
with the fairness encouraged by socialism. But at the moment we are not
doing well enough in either efficiency or fairness. Our generation needs
to work enormously hard to remedy this.

Another factor is the law: we have more laws for environmental
protection than any other country, but how many of them are actually
enforced? And when they are enforced, what is the effect? Current laws
do not allow severe enough punishment of polluters, and do not give
enough power to environmental departments, with the result that it is
cheaper to break the law than observe it. The system for maintaining
local environmental protection offices is flawed. Their finances and
personnel are all determined by the local government. The local
government decides who is taken on, how much they are paid, what
benefits they receive, what jobs their relatives get and where their
children go to school.

The result is that local environmental protection offices become public
relations teams, rubber-stamping projects that the local government
wants to push through. How can they be realistically expected to prevent
local governments from harming the environment in pursuit of economic
gain? We still have not completed the reform of the administrative
decision-making process. Many large projects that will have far-reaching
consequences get the go-ahead without the public being aware of them.
Even if the public finds out about the projects in advance, there are no
channels through which they can express their opinions, and the public
interest is eroded.

Change requires democracy and a mature legal system. It requires public
participation and transparency in public affairs.

The longer I am involved in environmental protection, the more I realise
the importance of democracy and the legal system. I am convinced that
environmental protection cannot be advanced by the State Environmental
Protection Administration (SEPA) alone. It requires action from the
whole of society, and the establishment and implementation of democracy,
and a mature legal system.

Environmental protection is the ideal field in which to experiment with
democracy and law, because it is a fairly apolitical area and one on
which it is reasonably easy to reach a consensus.

The issue of the Old Summer Palace is a good example. Different ways of
thinking, different departmental interests, regional and central powers,
communication between the government and public, and the “Law on
Administrative Licensing” all came together and interacted. The result
was an experiment in the way that democratic and rational
decision-making, and public supervision of the government, can work in a
rational and harmonious environment. So far, the experiment seems to
have been a success.

First published as "Green China and young China - part one" in Chinadialogue

China: economic powerhouse, environmentally unsustainable - part one :
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environmentally unsustainable - part one > Comments

By Pan Yue, published 24/7/2007

China is widely recognised as having achieved an economic miracle, but
it has paid an enormous price.
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“Change requires democracy and a mature legal system. It requires public
participation and transparency in public affairs.”

Is there a democracy anywhere in the world, in a country with
development and population growth pressure, which has struck the right
balance between environment and economy and achieved sustainability… or
which looks even remotely like achieving this?

Democracy immediately becomes critically compromised when there is big
money and power to be won.

Even if you could implement true democracy and real public participation
and supervision of government, you would still have the issue of whether
the public would be able to see long-term environmental issues as being
more important than short-term wealth generation.

I'd be inclined to think that a communist regime would have a better
chance of properly addressing environmental and sustainability issues.

I don't see how a democratic regime could possibly get away from the
notion of continuous growth (expansion of industry, economy, energy
consumption, etc), no matter what green initiatives it might be able to
introduce. And I can't see that ANY green initiatives would be much more
than window dressing for as long as this growth paradigm remained in place.

Pan Yue, I am pleased to see that someone from within is very concerned
about sustainability in China. You have expressed many grave concerns
and lots of good ideas. But I worry that it you haven't grasped the most
important point; the sheer magnitude of expansionism in China, which is
set to overwhelm any green initiatives, at least for many years to come.

It is this very scale of human endeavour that needs to be tackled.
Rather than striving for a “sustainable model of growth”, we need to be
questioning the very merits of growth itself, of the sort that China is
achieving, and start concentrating on quality of life instead.
Posted by Ludwig, Tuesday, 24 July 2007 11:13:32 AM
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since the selfstyled 'democracies' of the west are unable to achieve
steady-state equilibrium, we can rule out those models.

autocracies have been given endless trials, with no visible improvement
on the oligarchies that are the common pattern of human society. actual
democracy might work: california has the most active electorate in the
usa, and is leading a green policy in the face of federal resistance.

but by the time most of humanity learn to emulate california, it's very
likely most of human society will have collapsed into overcrowded,
underfed, uneducated favelas.

china is the leading edge of human society: what happens when population
is unchecked and resources are squandered in the pursuit of private
wealth. pollution diseases are going to wrack that land, riots and
rebellions are inevitable when existence is threatened, and we can watch
it like a preview of a dystopic science fiction movie titled:

"the decline and fall of civilization".

there'll be survivors, probably, and maybe new technology will save us
from the worst scenarios, or lay in a stock of your favorite beer and
stay drunk.
Posted by DEMOS, Tuesday, 24 July 2007 2:40:04 PM
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If you want to read a horror story of epic proportions about the
internal state of China and how it conducts its business on the world
stage at large (and the consequences for the rest of the world) I would
suggest a book titled THE COMING CHINA WARS by Peter Navarro.
Information available via http://www.peternavarro.com
Posted by Ho Hum, Tuesday, 24 July 2007 3:07:00 PM

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