china's economic explosion and its effects on the environment

Ben Black China’s Economic Explosion and its Effects on the Environment

Abstract:This paper will consider the unprecedented expansion that China’s economy has

experienced in the last few decades, and analyze what effects this has had on the environment. These effects include air and water pollution, as well as land shortages and health problems. The Chinese government has made unprecedented efforts to curb these trends, and these policies have sometimes been effective. However, in order to sustain its economic development, China must find a way to stop the smog that is overtaking its cities, the water shortages that are presenting mounting problems, and the many other environmental considerations of a rapidly accelerating economy.

In 1803, Napoleon Bonaparte declared China to be a sleeping giant. He went

on to warn his generals: “Let her sleep, for when she wakes she will shake the world

(wideworldofquotes.com). This notion of China’s potential greatness has been a

common theme throughout history, from the early accomplishments of the Han

dynasty to the later Ming and Qin dynasties. In the past few decades the Middle

Kingdom has catapulted itself onto the international stage, and become an economic

powerhouse to rival Japan, Europe, and inevitably the United States. Scholars and

world leaders continue to try to figure out China's next step, because the nation is

run as such a mystery to outsiders. In fact, Tom Friedman recently addressed a

letter to President Xi Jinping, calling for a more open government to enable the

continuation of its growth. This recent explosion of economic productivity in China

has led to many environmental concerns such as air pollution, water pollution, and

shortages of essential resources that threaten the sustainability of China’s economic

growth.

In order to analyze the effects of China’s economic growth, it is vital to begin

with an analysis of the enormity of China’s development in the last few decades. In

1963, China’s Gross Domestic Product (GDP) was just over $50 billion, and by 2012

it had risen to over $8.3 trillion. According to these figures, China’s GDP has

increased 166% since 1963, while the United State’s GDP has seen a 25% increase

during the same time period (data.un.org). This rate of growth is unprecedented,

and according to the World Bank, has allowed for 500 million people to be lifted out

of poverty. Despite such staggering achievements, many Chinese citizens remain in

poverty. The World Bank also estimates that 128 million people continue to

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struggle on less than $1.80 per day. Due to China’s massive population of over 1.3

billion, per capita Gross Domestic Product is another important statistic. According

to the United Nations, China’s GDP per capita was $114 in 1970, and had risen to

$5,439 by 2011. The U.S. Central Intelligence Agency puts China’s 2012 GDP per

capita at over $9,000 (cia.gov). This data suggests that China’s per capita GDP is

growing at a near exponential rate, and is another indicator of astounding economic

growth.

Another instrument of economic growth in China has been the enormous

amount of Foreign Direct Investment (FDI) that the Middle Kingdom has received.

The influx of foreign funds has been a significant contributor to China’s economic

growth. In 2012, China received $253 billion in FDI, while it invested $62.4 billion

in the economies of foreign countries (Journal of Regional Science). Despite these

large amounts of FDI, China is a massive country and the specificity of place is

perhaps more important to consider. In 2004, China received $60 billion dollars in

FDI, which the Chinese government affectionately labels “China’s Absorption of

Foreign Funds (mofcom.gov.cn).” Shanghai received by far the most funds, with

$6.5 billion being invested in the city. Beijing even trailed behind Shenzhen and

Qingdao, as the capitol of the People’s Republic of China received just over $3

billion. Additionally, the geographic locations of where FDI is used are heavily

skewed. When analyzing FDI per percent of GDP, cities such as Nanjing, Qingdao,

and Haikou received over $10 million per percent of GDP, while Zhanjiang,

Urumuchi, Kunming, and Xining received less than $1 million per percent of GDP.

This suggests that coastal urban centers benefit far more from foreign investment

than the cities further inland.

One result of China’s remarkable economic growth has been the rapid

growth in the amount of energy that the nation uses. Vast increases in industrial

production has demanded more energy, leading to China surpassing the U.S. to

become the largest energy consumer in the world, most of which it produces from

coal. The Middle Kingdom generates 70% of its energy from coal, which equates to

about half of the global consumption of coal. China burned 4 billion short tons of

coal in 2011, and produced most of it domestically, through state-owned mines in

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Mongolia (EIA China Report). The amount of energy that China harnesses from coal

and oil is significant because the burning of these fossil fuels increase CO2 levels, as

well as the amount of other pollutants that are released into the atmosphere at

dauntingly high rates.

Major economic development in China has led to increased levels of

emissions, particularly from industrial sources, which has resulted in some of the

highest levels of air pollution worldwide. It should be noted, however, that

significant efforts by the Chinese government to limit these emissions have had

some effect. In May of 2011, He Guoqiang, who is a member of the Political Bureau

of the CPC Central Committee, visited Hunan Province and continually pushed for

what he called the creation of an “environmentally friendly society (BBC

Worldwide).” These policies have begun to decrease the amount of SO2 emissions

nationwide. In 2006, China released 20.42 million tons of SO2, but had reduced that

amount to 18.39 million tons of SO2 by 2008 (Urban Studies). Though an overall

decrease in sulfur dioxide emissions has occurred, SO2, as well as soot emissions,

have become highly concentrated and significantly increased in urban areas. The

U.S. Embassy and Consulates in China release an air quality reading every hour,

which usually averages at 150 AQI in Beijing and Shanghai, which the U.S. defines as

an “unhealthy” level (stateair.net). This measurement is taken by analyzing the

particulate matter that is 2.5 microns in size, and considered “air pollution.” In

comparison, New York City’s air quality averages at 35 AQI. The American AQI

meter ranges from 0 to 500, but in January of 2013, the U.S. Embassy in Beijing

recorded an astounding AQI of 755 (nytimes.com). In total, spread over a human

lifetime, these levels could lead to health concerns for people in Chinese cities, as

well as have detrimental effects on plant and animal life.

The outside world has serious concerns about China’s pollution levels, thus

the Chinese government faced a dilemma when Beijing won its bid for the 2008

Olympics. In preparation for the 2008 Olympics, Beijing moved 200 industries from

the city center into outlying areas, in an effort to reduce pollution. To the same end,

the government removed half of the private vehicles from the roads of the Capitol in

order to reduce one of the highest contributors to urban air pollution (The Chinese

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City). These drastic measures to construct a facade for the international community

are yet another example of the significant amounts of air pollution that China’s

urban populations struggle to exist amongst. Of the 25 most polluted cities in the

world, seventeen are in China. This pollution damages health as well, with air

pollution being blamed for around 3 million deaths each year (Journal of Regional

Science).

Another environmental challenge that has accompanied economic growth is

water pollution and supply. China often faces water shortages in the dry and arid

north and northwestern regions of the country. This directly influences agriculture,

and presents water use efficiency as a vital facet of China’s future economic growth.

The Yellow River has been delivering steadily decreasing amounts of water to the

Yellow River Valley region, which makes efficient use of water even more important.

China also has a mounting threat to its economic expansion in the form of sewage

treatment. In a study done throughout 509 cities in 2005, only 23% of the factories

in those cities treated their sewage. The problem persists in residential water

supplies, with only 1/3 of water supplies being treated before being released into

homes (The Chinese City). With such polluted water supplies, living conditions and

health will presumably begin to decrease if serious reforms are not enacted.

While pollution problems create a variety of concerns, a more pressing

problem might be resource scarcity. Simply, China’s supply of fossil fuels (or even

land and water) cannot support the current rate of growth. In 2004, Wen Jiabao,

then premier of China, announced that a new measurement of gross domestic

product would be used, which he called “Green GDP.” This form of measurement

subtracts the loss of natural resources from the total GDP, which allows for a growth

report that quantifies lost domestic production resources. In 2007, utilizing Green

GDP, China’s growth was “virtually zero (Journal of Regional Science).”

China has many domestic resources, including many rare minerals that it has

taken advantage of, but not enough to sustain such levels of economic growth.

China consumes half of the world’s coal, and relies upon it for 70% of its energy. It

has significant reserves, of 128 billion short tons, but that amount is less than both

the United States and Russia (EIA China Report). At current consumption, these

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reserves will last for only 32 more years. Another fossil fuel that is consumed at a

high rate is oil, of which China uses 10.3 million barrels per day. That is less than

the United States, which consumes 18.6 million barrels per day, but China’s

consumption is rising, currently by 5% annually (eia.gov). Because of the burning of

large amounts of coal, oil, and other resources, China has surpassed the United

States to become the largest CO2 producing nation. In 2010, China produced 8.2

million Kilo Tons of Carbon Dioxide, while the United States released 5.4 million Kilo

Tons of CO2 into the atmosphere (eia.gov). These high levels of fossil fuel use

similarly plague western consumption-based economies, but could have an even

further detrimental effect on China’s economy as more of its population is lifted out

of poverty and hope to consume at the same rate.

According to the World Bank, 500 million people have been raised out of

poverty thanks to China’s economic expansion, while 128 million remain in poverty.

The Chinese government defines the poverty threshold as $1.80 per day, which

would equate to a yearly income of around $650. As a result of these low incomes

for such a significant portion of the population, China remains to be considered a

“developing nation” by the World Bank (worldbank.org). By analyzing the amount

of arable land available per person, the agricultural potential of a nation can be

studied, as well as its density and possible signs of overpopulation. In China, there

are only 0.08 hectares of arable land per person available. This is highly significant

when compared to other countries, like the U.S. with 0.73 hectares, or Russia with

0.79. The statistic is more astounding when compared with other high-density

populations in places such as Europe with an available 0.26 hectares per person

(Chinese Economic Performance in the Long Run).

Water has threatened China’s economic progress in terms of pollution, but it

also may hinder it due to lack of supply. With the recent economic expansion has

come a drastic increase in the demand for water, and that has created a scarcity in

the northern part of the country, where water is not plentiful but industrialization

demands it. China recently began work on what the government calls Nanshui

Beidiao Gongcheng, meaning to move the southern water to the north. The main

purpose is to connect the water rich areas around the Yangtze and Yellow Rivers

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into the dry north areas, as well as to cities such as Beijing, Shanghai, and Tianjin

(nytimes.com Moore). If successful, this project may help to solve China’s water

shortages, and overcome a major obstacle to future economic development.

Shortages, scarcity, and pollution all pose serious problems to Chinese

growth, but the political system of China may be what finally causes its economic

growth to falter. Tom Friedman recently wrote a letter, which appeared in the New

York Times, to President Xi Jinping, in which he criticized China’s policy of open

markets with a closed government. Friedman cited the mass accounts of corruption

among leading communist party members, and the crusade against the western

media that ensued when reporters began to investigate this corruption. Friedman

warns Xi that China cannot continue on its trajectory, and warns of, “what happens

when wealth gets concentrated at the top, power gets distributed at the bottom and

transparency gets injected everywhere.” In China, so little is known about the

wealthy and powerful, and technology is giving more influence to the common

Chinese citizen. One such agency of power is Weibo, similar to Twitter, that

currently boasts roughly 300 million users in China (nytimes.com Friedman).

The Chinese government has made notable strides toward environmentally

sustainable economic development, however much remains that must be

accomplished. Air pollution and smog in urban areas as well as water and land

shortages represent some of the short-term obstacles that stand in the way of

sustaining China’s unprecedented economic expansion. Scarcity of resources, both

from increased demand and the finitude of certain materials, may also play a role in

derailing China’s economic surge. The political structure of China may yet end its

economic success because of corruption and the heavy concentration of power and

wealth clouded in a shroud of mystery. Despite these many challenges, China’s rise

to economic superiority seems certain, the uncertainty lies in what the cost of this

economic explosion will be.

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