Abstract
The word “changing” best describes China today. And while the pace of change in the world's most populous country has been dramatic, China is still a work in progress–a great experiment, the outcome of which is still difficult to predict.
Since the economic reforms of 1978 began, China has experienced staggering industrial growth, often in the double-digit range. While the recent economic turbulence in East and Southeast Asia have had a cooling effect, China's economic growth is still impressive–an estimated 7.8 percent last year.
President Jiang Zemin says China's fundamental goal is to raise the standard of living of its people, largely by developing a socialist market system with “Chinese characteristics.” Economic expansion has lifted tens of millions out of poverty and greatly improved the living standards of millions more. But industrialization and urbanization have been accompanied by a host of problems that threaten continued expansion as well as the quality of life.
A cab driver in Kunming tells you how the water in Dianchi Lake has changed from swimmable to infectious in his lifetime. A woman in Beijing describes the city's air as Gobi Desert dusty when she was a girl; now it is poisoned with eye-burning noxious compounds. Governmental officials openly confirm that the residents of many of China's largest cities live and breathe in a cauldron of airborne pollutants.
Studies demonstrate that the country's rapid industrial change contributes to high rates of respiratory infection and chronic disease. Although solid, long-term scientific data are lacking, the government says the degraded environment is one of the leading factors influencing morbidity and mortality rates.
China faces daunting challenges–environmental problems and expanding energy and food needs, which some believe are intractable. If mishandled, they will have global repercussions.
Bad air
One gloomy Chinese legislator says that China's environmental pollution will get worse for at least a decade before it begins to improve. Concentrations of total suspended particulates and sulfur dioxide in urban areas are among the world's highest. Already, five of the 10 cities with the worst air quality in the world are in China, and recent data from the World Health Organization suggest that it might actually be eight out of 10.
China's industrial cities are afflicted by world-class smog. Facing page, a noxious stew hangs over booming Shanghai; at left, with their school in close proximity to belching factories, these Lanzhou children wear masks to protect against pollution.
Nevertheless, although China continues to pollute more each day, it is starting to do so more “efficiently.” Because of the shift from coal to natural gas in many households, particulate emissions have not risen as much as they would have if the increased energy use had come only from coal.
In contrast, sulfur dioxide emissions have roughly paralleled the increase in coal consumption, reflecting heavy coal burning and inadequate control measures.
Although the energy and industrial sectors are the biggest contributors to air pollution, cars, trucks, and buses are coming on strong. In just 15 years, the number of motor vehicles on China's roads has quadrupled, from fewer than 2.4 million in 1984 to more than 11 million today.
Experts inside and outside China estimate that by 2020, the urban vehicle population will be at least 10 times greater than it is now. From 1986 to 1996, for example, the number of vehicles in Beijing increased from 260,000 to 1.1 million. Although this represents just a tenth of the number of vehicles in Tokyo or Los Angeles, the pollution generated in each city is roughly the same. Chinese vehicles are among the most polluting in the world. Vehicle emissions standards in China were, until very recently, equivalent to those of developed countries in the 1970s; some Chinese companies manufacture vehicles using blueprints that are 20 years old.
Tainted water
Water pollution in some regions is also without parallel. Each year more than 30 billion tons of untreated wastewater and sewage are discharged into China's lakes, rivers, reservoirs, or into the sea. In 1996, only 5 percent of municipal sewage and 17 percent of industrial discharge received any treatment.
About 700 million Chinese–more than twice the population of the United States–consume water contaminated with levels of animal and human waste that exceed the government's maximum permissible levels by as much as 86 percent in rural areas and 28 percent in some cities.
While the contribution of state-owned enterprises to wastewater discharge is actually shrinking–largely because of tighter pollution controls and declining production lev-els–the rapid development of smaller town-ship-and-village enterprises (TVEs) exerts extraordinary pressure on natural resources, particularly water.
TVE's began in 1958; by 1995, they were generating more than half of China's industrial output. But because of their decentralized nature, they have not been subjected to national environmental laws. Local authorities, not surprisingly, are usually more concerned with the benefits of immediate development than with long-term environmental damage. As a result, each year TVEs discharge nearly four billion tons of waste-water in rural areas that seldom have treatment facilities.
Meanwhile, Chinese cities lack the infrastructure to fully treat sewage or purify drinking water. In 1996, more than 20 billion tons of urban sewage were discharged into rivers, lakes, or seas; but only about 10 percent were treated, sometimes only marginally.
Further, rivers that flow through urban areas are polluted by toxic and carcinogenic compounds such as arsenic and mercury, discharged by the plants and factories that line their banks. Although most people boil their drinking water, boiling does not protect against many of these compounds.
Negating growth
Pollution has a price measured in failed crops, ruined land, illnesses, and lost work time. Some Chinese experts estimate that economic costs associated with ecological destruction and environmental pollution have reached as high as 14 percent of the country's gross national product in recent years.
Two years ago, the World Bank estimated that air pollution alone cost China nearly 8 percent of its gross national product, or around $54 billion. Fourteen percent; 8 percent–such figures are guesstimates. But either would effectively cancel out last year's growth of 7.8 percent.
China's attempts to develop its economy and raise the standard of living of the average citizen are out of sync with a continuation of the kind of environmental degradation witnessed in recent years. Many–but certainly not all–of the country's top policymakers have taken note, and they are beginning to take greater corrective action.
Premier Zhu Rongji said early this year at the National People's Congress meeting that efforts should be made to increase public awareness of the importance of environmental protection, and that efforts to control and treat pollution in major cities, regions, valleys, and sea areas should be intensified. “Enterprises” said Zhu, “that discharge pollutants in levels exceeding standards should remedy the situation within a specified time. Those that fail to do so must be closed down.”
China already has regulations that address many of these problems, so the issue is really one of enforcement. Despite the complex system of legislative and policy tools in place, and the extensive network of environmental officials, compliance with environmental regulations remains low–mainly because economic development remains the country's top priority at all levels.
To strengthen environmental law enforcement, the government revised its criminal code to punish violations against the environment and resources. Polluters can be put in jail for environmental crimes or fined for causing pollution. More than 60,000 small, heavily polluting enterprises have been shut down in the past two years because they failed to meet the government's environmental requirements.
However, vague standards in many laws and regulations, coupled with the lack of a comprehensive enforcement regime, encourage a situation in which deals are cut between local environmental protection agencies, the State Environmental Protection Administration, other ministries, local government bodies–and the polluting enterprises.
Improved regulatory standards and more aggressive enforcement will probably reduce emissions and wastewater discharges from power plants and state-regulated industries. But tackling smaller residential sources, as well as emissions from township-village enterprises, will require a great deal of cooperation between national and local officials.
Also, residential coal burning for cooking and heating will continue to be a major source of both particulates and sulfur dioxide until there is much wider adoption of cleaner fuels. Studies of the contribution of various sources of air pollution from coal burning suggest that household coal burning is the largest contributor to outdoor particulate and sulfur dioxide concentrations at ground level in all but the most heavily industrial northern cities.
Dramatic coal-to-natural gas conversion efforts, however, are going on in Beijing, Shanghai, and some other major cities. In Shanghai, 97 percent of residential households now use natural gas. When the current project is completed, 46 districts in downtown Beijing will be free of coal burning.
Although the government has focused some attention on vehicular exhaust, national emission standards need to be established–and enforced–while the fleet of privately owned vehicles is still relatively small.
While the country's environmental problems continue to grow, so has public awareness. In response, the national government has ostensibly committed itself to reversing the trend of environmental deterioration by the early decades of the next century.
Environmental spending, which increased steadily during the past decade, reached 1 percent of gross domestic product last year, the highest in history. In more advanced cities and provinces–such as Shanghai and Xiamen–the input may be as high as 3 percent of local GDP.
Market incentives and instruments–such as “sulfur trading” and pricing reform for fuel–are being developed and tested to cut pollution. Environmental education and public information and participation have been promoted as important complements to the government's role in protecting the environment.
Energy: fueling a billion plus
In 1997, coal supplied about three-quarters of China's primary energy demand. Although this proportion is scheduled to decline slowly, the total amount of coal burned will nonetheless continue to rise to meet growing demands for energy. By the year 2010, annual coal consumption is expected to exceed 1.8 billion tons–or about 64 percent of the total primary energy demand.
The energy and industrial sectors are the biggest contributors to urban air pollution. While the Chinese government attempts to control emissions of coal-related particu-lates, sulfur dioxides, and nitrogen dioxides, it has paid relatively little attention to the reduction of greenhouse gases, particularly carbon dioxide.
China, the world's second largest emitter of carbon dioxide, will soon take over the number one spot from the United States. Even under the most optimistic projections of energy efficiency gains and conversion to alternative fuels such as hydro, natural gas, nuclear, and renewables, China will remain heavily dependent on coal well into the first half of the next century.
In the long run, economic growth and standard-of-living increases largely depend on increases in energy production. Per capita commercial energy use in China, an important indicator of living standards, is less than half of the world's average, and only one-tenth of use in the United States.
To achieve a per capita output of electricity close to a European standard within the next two decades, the Chinese government needs to double per capita power generation capacity by 2020. That would require roughly 200 new thousand-megawatt plants.
Although the energy challenge is daunting, China has managed to decouple energy growth from economic growth more effectively than most developing countries. While personal income levels in China have quadrupled over the past 20 years, China has held the growth in energy consumption to half the level of economic growth. This contrasts with development in India, South Korea, and Brazil, where the growth in energy consumption has exceeded economic growth.
If current energy consumption rates had remained at 1970s levels, China would today consume twice as much energy as it actually does, and carbon dioxide emissions would have nearly doubled.
China's improved efficiency has been in the works since the late 1970s, when energy researchers and planners realized that future energy supplies would not meet the needs of economic development unless end-use efficiency was greatly improved.
Industrial cities are choked with poorly built pouredconcrete apartment blocks where too many people share very little space (left). As China attempts to achieve a European standard of living in the next century, new apartments and singlefamily homes are being built on the outskirts of cities at a staggering pace. That requires much more energy production—which contributes to increased smog.
In the 1980s, the Chinese chose to aggressively pursue a policy of increased energy efficiency. The policy included, among other provisions: the creation of a national fund to invest in energy efficiency (initially, 10 to 12 percent of total energy investment); building a comprehensive energy consumption monitoring system for all large industrial facilities; and establishing organizations responsible for overseeing and promoting energy efficiency policy and programs.
And a few years ago, in the mid-1990s, the government began market-oriented programs to enhance energy efficiency. One of the most attention-getting was a World Bank-sponsored initiative to introduce forprofit energy management companies into China. These companies identify ways of upgrading equipment or processes in enterprises and then finance the upgrades themselves. They recover their costs by taking a share of the monthly energy savings.
Another example of a market-oriented program is Green Lights. China established the program in 1996 to improve its manufacturing capacity for high-quality but economical lighting products, while educating consumers about the benefits of using these money-saving products. The project hopes to increase use of high-efficiency lights to 300 million units by the end of 2000. It will also address the barriers that prevent greater use of efficient lighting products in China.
In 1997, the National People's Congress passed the Energy Conservation Law, which formalized many of the policies and regulations promulgated in the 1980s. Kilowatt-forkilowatt, state-sponsored energy-efficiency investments have cost about half of what investment in new generating capacity would have cost.
With a short-term goal of improving efficiency and reducing pollution, China has set a high priority on desulfurization and nitrogen removal for its conventional coal-burning power units. While shutting down small, heavily polluting, low-efficiency power plants, the country is also developing large capacity supercritical (high steam pressure) units in the range of 600 to 1,000 megawatts.
In the medium and longer run, China's priorities include: demonstrations of integrated gasification combustion cycle power plants with a capacity of no less than 400 megawatts; testing and construction of pressurized fluidized-bed combustion-combined cycle power plants; research and construction of liquefied natural gas power plants; and fuel-cell power generation.
Despite seemingly abundant and diverse technological alternatives, China's reach has so far exceeded its grasp. In the last decade, very few cleaner and more efficient coal technologies have actually come on line. At the end of 1997, for instance, there was only one full-scale commercial sulfur scrubber in operation and five demonstration units with only partial scrubbing capability. Another 10 units were in the pipeline, with completion dates scheduled for sometime between now and 2002.
How will China finance its ambitious environmental and clean energy plans? Although general economic performance over the past decade has been relatively strong, per capita income, even in the richest coastal provinces, remains below $3,000. With the government still focused on achieving a high and sustainable growth rate, capital for pursuing clean-energy options is scarce.
The Chinese government is expected to continue to provide most of the investment required for these efforts, but foreign sources, such as development assistance and export credits, will continue to play important roles. Nevertheless, it remains to be seen whether the political willingness and mechanism, such as the future of U.S. restrictions on aid money for China, will exist to promote or hinder this process.
The Chinese economy has begun to feel the impact of the economic contagion that struck Asia in 1997. China's real gross domestic product rose 7.8 percent in 1998, down from 8.8 percent the previous year. The forecast for this year is 7.2 percent.
While economic slowdowns are usually unwelcome events, a relative pause could give China's energy sector a chance to play catch up. In part because of slower economic growth, China's electric power industry now has an oversupply problem. The Chinese government has responded by closing small thermal power plants and imposing a three-year moratorium on the approval of new power plant construction.
Most small plants are diesel or coal-fired plants that were opened in the 1980s as demand for energy grew rapidly; they are inefficient and environmentally damaging. Decommissioning them would rid the country of some of its worst-polluting sites–another small but crucial step in the right direction.
But the challenge of achieving a cleaner energy future while overcoming existing environmental problems remains daunting, particularly because coal will continue to dominate the energy supply for the next several decades.
Many people, little land
The Worldwatch Institute asked in its 1994 report, “Who Will Feed China?” Of all of the problems facing China, perhaps none is as grave as food security. The report suggested that a huge import demand for cereals and other agricultural commodities was looming over the horizon, because China's homegrown output would fail to satisfy the demand of its increasingly affluent citizens.
According to some analysts, China's demand could eventually overwhelm the capacity of the traditional food-exporting countries, leading to large price increases on world markets, food shortages, and eventually, to famine in food-importing countries that lack enough export capability to earn enough foreign exchange to buy food.
When population size and growth, resource depletion, environmental pollution, and outdated technologies are factored in, China's food situation seems grim, especially when one considers that China already supports 22 percent of the world's population on just 7 percent of the earth's arable land.
Further, China's per capita share of fresh water, forests, and grassland is each less than one-third of the world's average. Years of inappropriate land use have consumed a large amount of arable land and caused much soil erosion.
The lost soil carried to the sea each year by China's rivers amounts to nearly 50 billion tons of nitrogen, phosphorus, and potassium per year, equivalent to the annual production of chemical fertilizer in China.
Recent natural events have made matters worse. In addition to being pounded by annual monsoons, China has experienced an increase in the frequency and degree of damage caused by natural disasters. There were more than twice the number of disaster-hit areas in each year of the 1980s than there were in the 1950s. This wiped out more than 30 percent of the country's crop productivity each year.
Flooding in the summer of 1998 along the Yangtze River and in northeast China, which displaced hundreds of thousands of people and damaged tens of thousands of hectares of farmland, revealed just how vital water, soil, and forest conservation are to agricultural sustainability.
Scarcity of water and unbalanced water distribution place yet another strain on China's ability to produce food. The country ranks eighty-eighth in per capita water availability, and the surface water in lakes and reservoirs has declined at the rate of about 325 square kilometers per year since 1954. Roughly 40 percent of China's 86,000 reservoirs are inactive and declared unusable because of sedimentation and depletion.
Between 1979 and 1987, irrigated areas decreased by more than 600,000 hectares, or about a million and a half acres. And for the past several years, water shortages and drought in northern China have caused the Yellow River's lower reaches to go almost dry for about two-thirds of the year. Many wells have been abandoned because of the lowering water table. With more than half of the population living in the north, long-term water scarcity on such a large scale has made food production acutely difficult.
Food production also has been adversely affected by environmental pollution. Government figures show that in 1993 nearly 37 percent of China's irrigated farmland used water contaminated by sewage and industrial wastewater. The resulting loss of food output was valued at approximately 1.39 billion yuan ($168 million) while the loss due to the decline of product quality was placed at 3.35 billion yuan ($406 million).
The world's largest user of fertilizer, China employs nearly three times more fertilizer per unit of farmland than the world average. Lack of knowledge and information has resulted in the overuse of fertilizer and pesticides in many parts of the country.
Chinese Agricultural Minister Chen Yaobang said recently that over the past decade, the volume of fertilizer used in China shot up 90 percent, but the growth in grain output was less than 6.5 percent. Making the situation even worse, the ubiquitous township-village enterprises have very limited or no pollution controls. The resulting health consequences have been severe.
Statistics show an increase in cancer mortality related to foods. Cancers associated with the digestive system now account for more than 56 percent of total cancer deaths in China.
Reforms that work
Since the 1950s, Chinese agriculture has experienced various revolutions and frequent transformations, from cooperatives to communization, and most recently, to the Rural Reform Program's popular household contract responsibility system.
This program, initiated in 1978, featured rural decollectivization, including elimination of more than 50,000 communes, whose administrative functions were assumed by township and village governments.
It also featured agricultural marketing and price reforms that, with the exception of grains and a few other commodities, shifted a large and growing share of agricultural marketing from the state system to free markets.
The reform generated sharp increases in the availability and use of modern farm inputs, including a near tripling of the application of chemical fertilizer, from 8.8 to 25.9 million tons from 1978 to 1990; a four-fold increase in the number of pedestrian tractors, from 1.4 to 7 million during the same period; and the widespread adoption of hybrid and improved varieties of rice, wheat, corn, and other crops.
The outcome of the reforms is impressive; the real gross value of agricultural output more than doubled during the two decades since 1978, and was accompanied by tremendous diversification in production, increased rural industrialization, and increased productivity.
Enhanced diets
Although China is undergoing rapid urbanization, it is still a largely rural and agricultural country. The rural economy is far less developed than that of urban areas. The annual per capita income for rural Chinese is around $250, far below the international poverty line.
The household is the basic unit of production in rural areas and, on average, each household farms less than one hectare of land, making it very difficult to conduct efficient, large-scale commercialized operations.
Despite a plethora of concerns and uncertainties, many experts conclude that China's past achievements in increasing food production, combined with its current and thoroughly pragmatic policies and plans for the future, all provide reason for optimism.
In the past few decades, China has actually increased per capita food consumption from less than 1,700 calories per day in 1960 to more than 2,700 calories in 1993. This has been achieved almost exclusively through increases in domestic food production.
During the same period, protein and fat intake also increased, from 42 grams and 17 grams to 70 grams and 58 grams per day. These exceed the average in countries with equivalent per capita gross domestic product.
Traditional Chinese diets are based on cereals, vegetables, and very small quantities of meat and fish. But with the increase in per capita income, urbanization, and market expansion, demand for more expensive non-cereal foods is rising, particularly for fowl, pork, beef, milk, farm-raised fish, and seafood.
China's development strategy, “Agenda 21,” promulgated in 1992, places a high priority on sustainable agriculture. China aims to achieve a steady increase in agricultural productivity, enhancement of food production, and security of the food supply.
Chinese scientists estimate that in 2030, China will require 650 million tons of food provisions to meet the demands of its projected maximum population of 1.6 billion people. China seems determined to rely on itself to meet this increased demand.
But because of the size of its population and its rapid industrialization, urbanization, and economic growth, the question of just how China will be fed continues to loom large. Neither China nor the rest of the world can afford to ignore this issue, which has significance for the welfare of billions of people.
The gnawing question is, What will happen if China cannot meet its food needs through domestic production? If anything goes wrong, famine is always a possibility. China is no stranger to famine.
But if things go mostly right, and if China continues to upgrade the diet of its people, will global food markets be disrupted? That is, as China acquires more foreign exchange through manufacturing, it will be able to buy more food on world markets, thus driving up prices. That, in turn, could also have a devastating impact on much of the developing world.
Looking ahead
China's size–in territory and population–coupled with its high rate of economic growth and rapid change mean that how China meets its pollution, energy, and food problems will have tremendous global repercussions. Imagine what the impact would be if major harvests failed and China had to import most of its food from other countries.
Scientists on the west coast of the United States have already detected fine particles emitted from dirty factories in northern China. While the United States is now the chief culprit in global warming scenarios, China will soon take the lead.
Chinese officials, in general, understand this. And they have been responding to various problems proactively. Environmental protection and sustainable development have been adopted as part of the national development strategy. Spending has continued to increase on environmental protection, pollution reduction, energy efficiency, and sustainable agricultural production.
Science, technology, and education have been identified as the tools to help the world's largest developing country attain prosperity. Institutional reform and restructuring have made the government leaner, more efficient, and more effective, even though a great deal of bureaucratic inertia and petty corruption still exist.
Technology development and transfer is a high priority in the attempt to update outdated, heavily polluting, and obsolete facilities. Enterprises are given the freedom needed to compete in the markets.
And the public is becoming increasingly aware of environmental problems and getting more involved in the decision-making process. Environmental investigative segments, similar to American TV programs like 60 Minutes, are produced and broadcast nationwide. Case-by-case, a grass-roots environmental movement is emerging.
Yet, despite the progress, China's problems and challenges are on a scale inconceivable to most nations, with the possible exception of India. It will take years–decades–to tell how effective its current efforts are.