China: economic powerhouse, environmentally unsustainable - part one

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.

See China: economic powerhouse, environmentally unsustainable - part two here.