The air at the Beijing
Olympics provided strong competition for headlines against Michael Phelps and
Usain Bolt. Almost every story, article, or feature included comments that air
quality would soon worsen again as full-scale industrial activity resumed. The
perception is that there must be a tradeoff between a cleaner environment and
The truth, however, is
that the People's Republic of China (PRC) must improve its environment in order
to sustain growth. The Chinese economy is far more efficient than it was 30
years ago, but its much-heralded expansion has placed unprecedented strain on
natural resources and is now beginning to menace public health. Regardless of
whether its economic size ever rivals or surpasses that of the U.S., China may
very well match the now extinct USSR's astounding levels of environmental
degradation, inefficient indigenous industry, and eventual economic stagnation.
Water, Water Not
The PRC faces a water
crisis. Starting at the top, the Himalayan glaciers are melting.
Winter 2008 levels on the Yangtze were the lowest since record keeping began in
1866, and the Yellow's outflow is a shocking 10 percent of what it was 40 years
Water consumption has
already soared and will naturally continue to rise with population growth,
urbanization, and industrial expansion. If glaciers can no longer provide
sufficient water, rice output will plummet beyond possibility of domestic
The Communist Party's hallowed goal of grain self-sufficiency will be lost and
the domestic and international impact of food dependence will make oil pale by
Groundwater use, falling
water tables, and subsidence occur in every eastern city, costing $75 billion
to date, with the promise of far greater costs to come. In rural areas, the
Ministry of Health labels over 40 percent of drinking water unsafe. One-quarter
of all surface water is unusable, and three-fifths can no longer support fish.
Sanitation is a crucial health indicator, and despite growing wealth, China has
badly trailed the global average on this count.
Grand plans for hydropower are doomed in the face of declining water levels,
accentuating the need for coal, which in turn worsens air quality.
Other Elements Also
Receding water is also
reducing the amount of available arable land. In 1996, arable land stood
(officially) at slightly over 130 million hectares. In 2007, arable land
slipped below 122 million hectares, approaching the central government's
long-held 120 million hectare "critical mark," and the loss is
notwithstanding, the degradation of air quality is bad enough to be fatal.
Chinese cities account for the majority of the world's 20 worst urban air
environments, and perhaps three-quarters of a million people die annually due
to air pollution.
In addition, while climbing the global income ladder, China has moved above the
World Health Organization's global average for birth defects. The link to air
pollution is clear; leading provincial coal producer Shanxi has the worst
incidence of birth defects, a correlation acknowledged by the provincial family
The 2008 central
government budget pushes environmental spending 23 percent higher to $35
billion. The State Council sends five times that amount, however, to aid local
governments whose industrial expansion is causing the damage.
Close to $90 billion was authorized for water pollution, and close to $85
billion for air pollution in the 2006–2010 plan, but as a percentage of GDP,
this is barely more than 2000–2005: a little over 1 percent annually.
The 1 percent figure is
dwarfed by the World Bank's 2006 estimate of costs from air and water
pollution: 5.8 percent of GDP in direct costs, health expenditure, and the
This is the best available adjustment to GDP after China's own green GDP
project was canceled.
While the difficulty in calculating ecologically adjusted GDP was no doubt a
factor, the unattractive results looming in a completed project were likely the
primary motivation behind the cancellation.
The Health Trap
From tainted water to
birth defects, public health in China is under assault. Central government
health spending will increase 25 percent, but it will still be only $13
billion, a shockingly low figure when considered on a per capita basis. Urban
health insurance coverage expanded from 155 million to 220 million people in
2007, but the program to universalize urban insurance by 2010 must reach over
200 million more citizens.And
that is the easy part. The rural population of 900 million requires massive aid
to participate even in an embryonic health insurance system.
Better health is the
core of economic development. For instance, the single best correlate with
long-term economic growth is life expectancy.
Unfortunately, environmental conditions capable of harming Chinese public
health are clearly in place. It takes up to a generation for the effects of
environmental harm to manifest in public health, but the first signs are
already appearing. It also takes years or even decades for large-scale public
health programs to help, and Beijing has not yet grasped the magnitude of the
The USSR: An Instructive
It is not possible to
draw definitive conclusions concerning the timing and degree of the impact of
the PRC's environmental depletion on its long-term economic growth, in no small
part because the extent of the depletion is unprecedented. There may be one
instructive comparison, though, and it does not bode well.
China's reform era is 30
years old. For more than 30 years after World War II, the Soviet Union boasted
an extremely impressive industrial expansion. Yet under the surface, ecological
destruction had actually begun to reduce life expectancies and eventually led
to prolonged economic stagnation. Moreover, the Russian Federation's recent
recovery stems from its natural resources, which the PRC no longer has. It may
be that, a generation from now, China's industrial boom will be viewed in a
very different light.
"Himalayan Glacier Melting Observed From Space," ScienceDaily, March
28 2007, at http://www.sciencedaily.com/releases/2007/03/070327113346.htm(August
China Radio International, "Yangtze Suffers Lowest Water Level in
Records," China.org.cn, January 16, 2008, at http://www.china.org.cn/environment/news/2008-01/16/
content_1239635.htm(August 25, 2008); Brook Larmer, "Can
China save the Yellow—Its Mother River?," National Geographic, May
2008, at http://ngm.nationalgeographic.com/2008/05/china/
yellow-river/larmer-text(August 25, 2008).
Debora MacKenzie, "Melting glaciers will trigger food shortages," New
Scientist Environment, March 20, 2008, at http://environment.newscientist.com/article.ns?id=dn13519(August
Yin Yueping, Zhang Kaijun, and Li Xiaochun, "Urbanization and Land
Subsidence in China," International Association for Engineering Geologists
2006, 10th Annual Meeting, Paper No. 31, at http://www.iaeg.info/iaeg2006/PAPERS/IAEG_031.PDF(August
25, 2008); Xinhua, "Over 40% Drinking Water in Rural Areas
Unhealthy," China Daily, February 18, 2008, at http://www.chinadaily.com.cn/china/2008-02/18/content_6464053.htm(August
25, 2008);"China to Invest Billions to Deal with Water Pollution,"
China Daily, January 15, 2008, at http://www.chinadaily.com.cn/bizchina/
2008-01/15/content_6395700.htm(August 25, 2008);WHO and UNICEF,
"Water Supply and Sanitation Data Query Tool," Joint Monitoring
Programme for Water Supply & Sanitation, at http://www.wssinfo.org/en/sanquery.html(August
Harman, "China's Arable Land Acreage Falls in 2007," Resource
Investor, April 17, 2008, at http://www.resourceinvestor.com/pebble.asp?relid=42019(August
Two-thirds of the global increase in greenhouse emissions in 2006 came from
China, which emitted 14 percent more than America did in 2007. See "China
now no. 1 in CO2 emissions," Netherlands Environment Assessment Agency, at
2008). The central government will spend nearly 80 percent more this year, or
$6billion, on measures to control emissions, but this is a minor part of
budget. See "Chinese government to spend 78 percent more on energy
efficiency, emission reduction," Trade Council of Denmark, China, March
27, 2008, at http://www.dtcchina.um.dk/en/menu/InfoAboutChina/
Richard McGregor, "750,000 a Year Killed by Chinese Pollution," Financial
Times, July 2, 2007, at http://www.ft.com/cms/s/0/8f40e248-28c7-11dc-af78-000b5df10621.html(August
Reuters, "China Birth Defects Soar Due to Pollution," October 29,
2007, at http://www.alertnet.org/thenews/newsdesk/PEK155250.htm(August
Reuters,"Selected Figures from China's 2008 Budget," March 5, 2008,
25, 2008); "Total Investment in Fixed Assets in Urban Areas Kept Surging
in from January to July," National Bureau of Statistics, August 15, 2008,
t20080815_402498716.htm(August 25, 2008).
U.S. Commercial Service, "Environmental Technologies," BuyUSA.gov, at
"Cost of Pollution in China," World Bank and State Environmental
Protection Administration, February 2007, at http://siteresources.worldbank.org/INTEAPREGTOPENVIRONMENT/
Resources/China_Cost_of_Pollution.pdf(August 25, 2008).
Melinda Liu and Jonathan Ansfield,
"Where Poor Is A Poor Excuse," Newsweek, July 7–14, 2008, at http://www.newsweek.com/id/143693 (August 25,
Xinhua, "China's 2008 Draft Budget Report," Embassy of the People's
Republic of China in the Republic of Liberia, March 5, 2008, at http://lr.china-embassy.org/eng/gyzg/a123/t412352.htm(August
25, 2008); "China's Basic Medical Insurance System Covers 221 Million
People," January 22, 2008, at http://news.xinhuanet.com/english/2008-01/22/content
_7473179.htm(August 25, 2008).
Life expectancy in the six richest provinces—all coastal—is more than a decade
longer than in the six poorest provinces, which are all interior. See Shan Juan,
"Life expectancy on rise, but gap remains," China Daily,
January 10, 2008, at http://www.chinadaily.com.cn/china/2008-01/10/content_6383396.htm(August
25, 2008). Gaps in life expectancy cannot be closed quickly. The degree of
internal divergence implied by this chasm may be inconsistent with a unified
economy. This does not mean China will be poor or politically fragmented, but
it may increasingly become multiple large economies, divided on clear
geographic lines and with very different features.