Hire Geoff to Speak Frequently Requested Items Event Photos Can't Find It? Click Here Past and Future Guest Information Send a Message to Geoff Your Opinions Posted Here Links to Other Hot Sites Back to the Home Page

China

[ Follow Ups ] [ Post Followup ] [ Geoff Metcalf Forum ]

Posted by Bay Point David on August 01, 2004 at 14:49:57

Don't know if the Financial Times passes your litmus test of right (=always right)or left (=always wrong) but this is also something to think about. If this is true my question is, when is China going to make their move?

Could it be that a series of ecological crisis could lead the Chinese to make a move for greener pastures? The Hmong used to control the best land in China but they were pushed out to the highlands of Indochina many centuries ago.

They are also buying our bonds at a massive scale with all the wealth we are transfering to their cheap manufacturing base.

I know this article has some left wing buzz words in it that might chaff your hides but what about the implications of the data presented? Can you look beyond the right/left dialoge and just look at the data present and what that data's implications could be for our country and the world in general?

Modern China is facing an ecological crisis
By James Kynge
FT.com site; Jul 26, 2004

When Wang Xin was a boy, the river near his village in the shadow of the Great Wall flowed through rapids, pellucid pools and a waterfall. "[My friends and I] used to swim there all the time," says the 26-year-old beekeeper.

Today that river is no more than a few puddles seething with tadpoles. Wading birds in the area have all but disappeared.

The ecological degradation around Mr Wang's home is nothing unusual in China, a country gripped by environmental crisis. Scores of rivers, large and small, have dried up in northern China over the past 20 years. The Yellow River, mother of Chinese civilisation, no longer reaches the sea for much of the year.

Acid rain falls over 30 per cent of the country and the air in many cities will be virtually unbreathable by 2010 if carbon, sulphur dioxide and nitrogen oxide emissions continue rising at their current rate.

Just as in the former Soviet Union, central planning, with its mantra of "produce first, live later" has wreaked untold damage. But in China the cost has been amplified by demographic and geographic peculiarities. Only about half of China is habitable, so most of its 1.3bn people - a fifth of humanity - are squeezed on to and around only 7 per cent of the world's cultivable land.

The stress this imposes is exacerbated by industrialisation and urbanisation at a speed unprecedented in human history. In the past 20 years about 200m people have moved from the countryside to towns and cities and by 2020, 300m more are expected to have migrated.

To many, the crisis now unfolding is qualitatively different from environmental issues elsewhere in the world. In most places, the degradation is a matter of degree; in China it is measured in absolutes.

Unless the country overhauls its current approach to development, ecological collapse in large areas of China appears assured. Huge subterranean holes now gape beneath cities in northern China as aquifers are depleted, and deserts, which already cover 18 per cent of China's land area, expand by hundreds of thousands of square kilometres every year. Even national leaders sequestered behind the walls of Zhongnanhai, their compound in Beijing, are not immune to the dust storms that whip in from the north each spring.

Pan Yue, the outspoken deputy head of the State Environmental Protection Agency (SEPA), is adamant that China's developmental trajectory cannot last. "If we continue on this path of traditional industrial civilisation, there is no chance that we will have sustainable development," Mr Pan says. "China's population, resources, environment have already reached the limits of their capacity to cope. Sustainable development and new sources of energy are the only road we can take."

Mr Pan is not the first in China to sound the alarm; in 1982 a clause on protecting nature was written into the constitution. But official sources and experts say Mr Pan's words reflect a new, unprecedented level of determination within Beijing's government to redraw the nation's environmental destiny.


A new slogan, "scientific development", has emerged to encapsulate a series of new policies, laws and rules - some announced, many not - with which Beijing plans to usher in a new era of commercial and political reforms, officials and academics say.

The most obvious area of reform is in energy usage. A recent research paper from the Chinese Academy for Environmental Planning says that costs to human health from air pollution already account for 2 to 3 per cent of gross domestic product annually and will reach $390bn (£210bn, €320bn), or 13 per cent of gross domestic product, by 2020 if China continues on its current track.

In China's 11 biggest cities 50,000 people die prematurely and 400,000 people are infected by chronic bronchitis each year because of soot and other tiny airborne particles. If things do not change, some 380,000 people will be dying prematurely each year by 2010 and that figure will rise to 550,000 people annually by 2020, the research suggests.

Beijing is therefore planning a series of measures to reduce air pollutants, most of which are emitted from the burning of coal. By 2020, China hopes to have reduced its reliance on coal to less than 60 per cent of its energy needs from the current almost 70 per cent, by emphasising clean fuel sources such as natural gas, nuclear power, hydropower and wind and other renewable sources (see charts).

Such changes have important implications not only for pollution but also for the power equipment industry, a sector in which General Electric, the US engineering giant, Alstom, a French competitor and Mitsubishi Heavy of Japan are all conducting booming business.

Even larger potential shifts are in store for the auto industry, analysts say. China's car-centred model of development has been a mainstay of economic growth in recent years, with all the world's big car companies investing or promising to invest in large production facilities. The spin-off benefits from burgeoning car sales have been enormous. Each car requires several thousand parts, hundreds - if not thousands - of suppliers, roads, car parks, driving schools, petrol stations and other service industries. But several officials and academics are now questioning the wisdom behind this frenzy.

Not only are exhaust fumes adding to an already heavy plume of pollution but roads, car parks and other crucial infrastructure are also eating away at scarce agricultural land. "Every million cars added to the fleet requires the paving of 20,000 hectares of land. If that was crop land it means that grain production would fall by 80,000 tonnes," says Lester Brown, director of the Washington-based Earth Policy Institute.

It is uncertain how the debate over the development of China's vehicle industry will evolve. But the anti-car lobby is gaining ground as cars clog the arteries of large cities, pollute the air, help to drive down grain output and, in the longer term, impinge on the political imperative of main- taining food security (see below).

In spite of higher costs, it appears likely that pressure on foreign vehicle manufacturers to start making hybrid (petrol and electric) cars in China will intensify and, in the longer term, a transport system run on hydrogen is a distinct possibility. A research team led by scientists at Tsinghua University has succeeded in making a hydrogen-powered bus that is due for trial runs on Beijing streets soon.

China's environmental challenges are so daunting, says Mr Brown, that Beijing could be forced into leading the world in the use of clean fuels and other forms of sustainable development.

But all this comes at a cost, as do the numerous other planned moves to promote savings of energy and resources by raising the price of petrol, water, electricity, coal and other inputs over time, experts say. Taxes will need to be raised to pay for the roll-out of environmentally friendly infrastructure, resulting, for instance, in an estimated 60 per cent rise in taxes on diesel and petrol by 2020, according to the Beijing Green City Environmental Energy Research Institute, a think-tank.

In many ways, such costs represent the repayment of an "environmental deficit" incurred during the past 20 years of break-neck industrialisation. Assessing with any precision the net impact on China's manufacturing competitiveness from financing this environmental deficit is not currently possible but many observers say the costs would be considerable.

"On the one hand China is the workshop of the world. On the other it is becoming the rubbish tip of the world," says one Chinese environmentalist. Officials say China's environmental degeneration is a global problem and the job of paying for its rehabilitation should be borne partly by developed nations.

If that happened, it would take time. A more immediate challenge facing Beijing is how to curb the behaviour of the country's worst offenders: local governments.

"We can see a lot of local authorities that are sacrificing their natural resources in order to expand production and, craving scale and worshipping foreign [investors], they engage in image projects and politically motivated developments," says Qu Geping, former head of the environmental protection committee of China's legislature. "The outlook of many local officials is very different from the tenet of scientific development. If their outlook cannot be changed, you would have to be worried that we cannot implement the concept of scientific development."

The problem with local governments is systemic. The performance of local leaders is judged according to how much GDP growth they oversee, how many jobs they help create and how many visible achievements - such as building industrial parks or fine new office blocks - they make.

Environmental protection is often seen as an unwelcome cost. If the local SEPA bureau reminds them of their responsibilities or tells them they have broken environmental laws, local bosses can easily overrule them; both law courts and government bureaux at the city and county levels are, in practice, subordinate to local chiefs.

An increasing number of analysts, therefore, see the task of bringing local authorities into line as primarily a political challenge. Mr Pan of the State Environmental Protection Agency advocates a system of "public hearings" that would solicit the opinions of experts, company executives and environmentalists before significant projects are undertaken.

He adds that environmental laws need to be enforced, which would intensify the pressure on Beijing to create a genuine rule of law to replace the current system of administration by the fiat of Communist party officials. "In the past 20 years or more, how many officials have received the sanction of the law because of polluting nature?" asks Mr Pan. Such ideals, if achieved, would supply considerable impetus to the process of democratisation under way in China. But introducing such checks and balances implies the erosion of official power and is therefore fiercely resisted by local governments.

Herein lies the uncertainty hovering over China's environmental future: without reform to the political system, it may be difficult to alleviate the crisis. But political reform has been virtually moribund since the 1989 Tiananmen crackdown on pro-democracy demonstrators in Beijing. Several small experiments have taken place but implementation of an efficient system to balance the power of a single ruling party appears to be a long way off.

A question mark over future food supply

Most of Beijing's current leaders were in their late teens or early 20s when China was convulsed by the terrible famine that is estimated to have killed about 30m people.

Those memories from the late 1950s and early 1960s have left deep scars on the national psyche. The questions, therefore, of whether China can feed itself and whether the food supply of 1.3bn people is secure are of visceral importance to the government of President Hu Jintao.

Over the past 25 years of free-market reforms, China has been able comfortably to feed itself. But break-neck industrialisation, rising demand and dwindling water resources have combined to raise the prospect that China is on the brink of becoming a big net importer of food.

"China has been covering the shortfall in its grain production over the past five years by drawing down its once vast stocks of grain," says Lester Brown, president of the Earth Policy Institute and an authority on Chinese agriculture. "But the stocks can't be drawn down much more. Then China will have to turn to the world market and, indeed, for wheat we know that China has already bought 9m tonnes in the past several months.

"I expect that within the next year it will be buying rice and corn as well. We are probably looking at a year or two from now China importing maybe 30m, 40m, 50m tonnes of grain - more than any other country by far," Mr Brown says.

Looming relative food insecurity is so sensitive a subject that Chinese officials are reluctant to deal with it in public. But in private one senior official says { b}falling water tables, drying rivers and polluted water sources are taking their toll on the productivity of China's fields.

In addition the amount of land available for grain is slipping fast. The annual movement to cities of between 10m to 20m Chinese, the vast expansion of industrial parkland, sprawling networks of new roads and railways and other construction have reduced farmland by 6.7m hectares since 1996 to a total of 123.4m hectares by the end of last year.

That decline resulted in a fall in the production of wheat, maize, rice and other food grains from 512m tonnes in 1998 to 431m tonnes last year. This year a rebound in grain prices has encouraged farmers and a better harvest is expected for the first time in five years.

But, according to Chen Xiwen, deputy director of the office of the Financial Work Leading Group, the deficit in grain production compared with demand this year will be about 37.5m tonnes. The level of grain reserves is kept secret, so it is unclear how much of that shortfall will come out of the reserves and how much will be imported.

The main grain expected to be imported is wheat, which in China is grown mostly in the north east, an area where consistent over-pumping from aquifers has contributed to a precipitous decline in the water available for agriculture. A photograph in the Chinese media this week showed the cracked, dry bed of the Songhua river, the main waterway in the north-eastern province of Heilongjiang.

In the longer term, there appears little doubt that China will become a big importer. By 2030, it will have a population of 1.6bn people and will need about 640m-720m tonnes of grain a year - 200m tonnes up from today. Hybrid breeding programmes are under way to increase yields but their success is uncertain.

If such technology only partially succeeds in narrowing the shortfall, China's environmental crisis, mixed with its burgeoning population and dwindling land, will have resulted in a vast food dependency on foreign sources. That is not a prospect that Beijing's leaders relish, but ultimately it will insinuate a layer of vulnerability into the body politic of Asia's rising power.

Financial Times group