The Great Leap Backward?

Elizabeth C. Economy

From Foreign Affairs, September/October 2007

Summary:  China's environmental woes are mounting, and the country is fast becoming one of the leading polluters in the world. The situation continues to deteriorate because even when Beijing sets ambitious targets to protect the environment, local officials generally ignore them, preferring to concentrate on further advancing economic growth. Really improving the environment in China will require revolutionary bottom-up political and economic reforms.

Elizabeth C. Economy is C. V. Starr Senior Fellow and Director for Asia Studies at the Council on Foreign Relations and the author of The River Runs Black: The Environmental Challenges to China's Future.

In the view of China's leaders, however, damage to the environment itself is a secondary problem. Of greater concern to them are its indirect effects: the threat it poses to the continuation of the Chinese economic miracle and to public health, social stability, and the country's international reputation. Taken together, these challenges could undermine the authority of the Communist Party.

China's leaders are worried about the environment's impact on the economy. Several studies conducted both inside and outside China estimate that environmental degradation and pollution cost the Chinese economy between 8 percent and 12 percent of GDP annually. The Chinese media frequently publish the results of studies on the impact of pollution on agriculture, industrial output, or public health: water pollution costs of $35.8 billion one year, air pollution costs of $27.5 billion another, and on and on with weather disasters ($26.5 billion), acid rain ($13.3 billion), desertification ($6 billion), or crop damage from soil pollution ($2.5 billion). The city of Chongqing, which sits on the banks of the Yangtze River, estimates that dealing with the effects of water pollution on its agriculture and public health costs as much as 4.3 percent of the city's annual gross product. Shanxi Province has watched its coal resources fuel the rest of the country while it pays the price in withered trees, contaminated air and water, and land subsidence. Local authorities there estimate the costs of environmental degradation and pollution at 10.9 percent of the province's annual gross product and have called on Beijing to compensate the province for its "contribution and sacrifice."

China's Ministry of Public Health is also sounding the alarm with increasing urgency. In a survey of 30 cities and 78 counties released in the spring, the ministry blamed worsening air and water pollution for dramatic increases in the incidence of cancer throughout the country: a 19 percent rise in urban areas and a 23 percent rise in rural areas since 2005. One research institute affiliated with SEPA has put the total number of premature deaths in China caused by respiratory diseases related to air pollution at 400,000 a year. But this may be a conservative estimate: according to a joint research project by the World Bank and the Chinese government released this year, the total number of such deaths is 750,000 a year. (Beijing is said not to have wanted to release the latter figure for fear of inciting social unrest.) Less well documented but potentially even more devastating is the health impact of China's polluted water. Today, fully 190 million Chinese are sick from drinking contaminated water. All along China's major rivers, villages report skyrocketing rates of diarrheal diseases, cancer, tumors, leukemia, and stunted growth.

Social unrest over these issues is rising. In the spring of 2006, China's top environmental official, Zhou Shengxian, announced that there had been 51,000 pollution-related protests in 2005, which amounts to almost 1,000 protests each week. Citizen complaints about the environment, expressed on official hotlines and in letters to local officials, are increasing at a rate of 30 percent a year; they will likely top 450,000 in 2007. But few of them are resolved satisfactorily, and so people throughout the country are increasingly taking to the streets. For several months in 2006, for example, the residents of six neighboring villages in Gansu Province held repeated protests against zinc and iron smelters that they believed were poisoning them. Fully half of the 4,000-5,000 villagers exhibited lead-related illnesses, ranging from vitamin D deficiency to neurological problems.

Many pollution-related marches are relatively small and peaceful. But when such demonstrations fail, the protesters sometimes resort to violence. After trying for two years to get redress by petitioning local, provincial, and even central government officials for spoiled crops and poisoned air, in the spring of 2005, 30,000-40,000 villagers from Zhejiang Province swarmed 13 chemical plants, broke windows and overturned buses, attacked government officials, and torched police cars. The government sent in 10,000 members of the People's Armed Police in response. The plants were ordered to close down, and several environmental activists who attempted to monitor the plants' compliance with these orders were later arrested. China's leaders have generally managed to prevent -- if sometimes violently -- discontent over environmental issues from spreading across provincial boundaries or morphing into calls for broader political reform.

In the face of such problems, China's leaders have recently injected a new urgency into their rhetoric concerning the need to protect the country's environment. On paper, this has translated into an aggressive strategy to increase investment in environmental protection, set ambitious targets for the reduction of pollution and energy intensity (the amount of energy used to produce a unit of GDP), and introduce new environmentally friendly technologies. In 2005, Beijing set out a number of impressive targets for its next five-year plan: by 2010, it wants 10 percent of the nation's power to come from renewable energy sources, energy intensity to have been reduced by 20 percent and key pollutants such as sulfur dioxide by 10 percent, water consumption to have decreased by 30 percent, and investment in environmental protection to have increased from 1.3 percent to 1.6 percent of GDP. Premier Wen Jiabao has issued a stern warning to local officials to shut down some of the plants in the most energy-intensive industries -- power generation and aluminum, copper, steel, coke and coal, and cement production -- and to slow the growth of other industries by denying them tax breaks and other production incentives.

These goals are laudable -- even breathtaking in some respects -- but history suggests that only limited optimism is warranted; achieving such targets has proved elusive in the past. In 2001, the Chinese government pledged to cut sulfur dioxide emissions by 10 percent between 2002 and 2005. Instead, emissions rose by 27 percent. Beijing is already encountering difficulties reaching its latest goals: for instance, it has failed to meet its first target for reducing energy intensity and pollution. Despite warnings from Premier Wen, the six industries that were slated to slow down posted a 20.6 percent increase in output during the first quarter of 2007 -- a 6.6 percent jump from the same period last year. According to one senior executive with the Indian wind-power firm Suzlon Energy, only 37 percent of the wind-power projects the Chinese government approved in 2004 have been built. Perhaps worried that yet another target would fall by the wayside, in early 2007, Beijing revised its announced goal of reducing the country's water consumption by 30 percent by 2010 to just 20 percent.

Even the Olympics are proving to be a challenge. Since Beijing promised in 2001 to hold a "green Olympics" in 2008, the International Olympic Committee has pulled out all the stops. Beijing is now ringed with rows of newly planted trees, hybrid taxis and buses are roaming its streets (some of which are soon to be lined with solar-powered lamps), the most heavily polluting factories have been pushed outside the city limits, and the Olympic dormitories are models of energy efficiency. Yet in key respects, Beijing has failed to deliver. City officials are backtracking from their pledge to provide safe tap water to all of Beijing for the Olympics; they now say that they will provide it only for residents of the Olympic Village. They have announced drastic stopgap measures for the duration of the games, such as banning one million of the city's three million cars from the city's streets and halting production at factories in and around Beijing (some of them are resisting). Whatever progress city authorities have managed over the past six years -- such as increasing the number of days per year that the city's air is deemed to be clean -- is not enough to ensure that the air will be clean for the Olympic Games. Preparing for the Olympics has come to symbolize the intractability of China's environmental challenges and the limits of Beijing's approach to addressing them.

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