China’s Embattled Environment

Simon Hunt of Simon Hunt Strategic Services reported on China’s environment after a recent visit. This cannot be good for tourism and the Olympics.

Link: InvestorsInsight : Thoughts From The Frontline.

Anyone who has traveled through the countryside will be appalled by the filth in the streams and rivers that run through towns and cities. China’s factories, other than some new higher-tech ones, belch pollution into the atmosphere making it difficult for ordinary people to live in many of these towns.

Howard French’s letter in the Herald Tribune of 9 March tells it all. "During a jaunt of several days through Hebei province (which this writer visited last September and can attest to this description), which borders on Beijing, I never once saw the sun in the sky. What I mean by this is that the air appeared thick as gruel, due to the heavy burden of particulates that come from coal mines, steel mills and other smoke-stacked industries."

The list of recent environmental accidents need not be repeated. Suffice to say that 70% of the country’s rivers and lakes are seriously polluted. WHO reports that two-thirds of Chinese cities have air quality below standard, of which nine are in the world’s top ten of the most polluted having the highest rates of carbon monoxide. Anyone who has visited some of these cities will know just how bad pollution has become. Chinese government estimates that around 400,000 people die each year of diseases related to air pollution.

But, in recent years government has put a lot of effort towards fighting air and ground pollution, often with its dictates being ignored by local governments. The Environmental Protection Administration (SEPA) has been given added powers to overcome local government influence. One way, for instance, is by having the authority to freeze a company’s accounts if they ignore SEPA’s rules.

China is moving also on several fronts to limit air pollution. Its fuel efficiency standards for new cars are now stricter than those in the USA. Beijing has the largest fleet of natural gas buses in the world (1700); and China is undertaking research with W European companies to drastically reduce emissions from coal fired power stations. Furthermore, China’s nuclear Pebble-Bed Reactor (PBR) will be capable of producing clean electricity. These plants are small enough to be assembled from mass-produced parts and cheap enough to be available in large numbers. They come with the ability of having no spent fuel rods and are meltdown proof.

China will no longer allow low-tech plants, which are environmentally unfriendly, to be built. This prohibition won’t be effective immediately, but it will become totally effective over a five-year period. We will see this in basic industries such as steel, aluminum and copper, for instance.

Government is also starting to impose export taxes on goods that are energy and/or natural resource intensive. The recent 10% tax on the export of certain copper and copper alloy semis is a start.

In short, both environmental issues and improving natural resource, including energy, usage has a very high priority. The first is because China will ruin itself if current trends to continually build low-tech industries persist; and the second is a need to husband precious resources.