one-fifth of the sky: china's environmental stewardship

One-®fth of the Sky: China's Environmental

Stewardship

HOLLY SIMS *

State University of New York, Albany, USA

Summary. Ð While China's economic success has won international acclaim, far lessattention has been paid to its mounting environmental problems. As the second majorproducer of ozone-depleting chloro¯uorocarbons and greenhouse gases, China casts ashadow upon the 21st century. The agency with major responsibility for protectingChina's environment, the National Environmental Protection Agency (NEPA), is littleknown in the industrialized world. Two major weaknesses for the environmental policysystem's weakness are explored. First, its vertical, top-down development re¯ects thelow salience of environmental protection for the general public. Second, contextual andstructural obstacles impede e�ective use of conventional regulatory approaches, led byeither state or market forces. Ó 1999 Published by Elsevier Science Ltd. All rightsreserved.

1. INTRODUCTION

The environmental policy system chargedwith monitoring and protecting the air, waterand soil of China's 1.2 billion people is littleknown to a global audience much more famil-iar with the country's dazzling record ofeconomic growth. In part, this re¯ects the keydilemma facing China's National Environ-mental Protection Agency (NEPA): pressuresfor economic growth are powerful andcompelling, while institutions to mitigategrowth's unwanted e�ects are weak. As a result,NEPA seldom can deploy the state's tanks andplanes in its battle to protect China's environ-ment. Instead, as a relatively junior agency, itoften faces polluters with the bare-handedbravado of a kung fu novice.1

China's rapid industrial development has ledthe World Bank to call it one of the world'smost polluted countries. Serious air and waterpollution menaces public health (Smil, 1993;Edmonds, 1994; Ryan and Christopher, 1995).Pressures for further economic growth areintensi®ed by population size and density, byChina's heavy reliance on coal and by the lossof arable land to soil degradation and urban-ization. Such trends are not only important forthe country's present and future health but for

their global rami®cations. China's representa-tion in the global population of 5.9 billionmight have inspired its former leader MaoZedong to observe that the Chinese peoplehold up one-®fth of the sky.2 Those whouphold the balance have grounds for concernabout the second largest producer of ozone-depleting chloro¯uorocarbons and greenhousegases.

Chinese o�cials have fashioned an elabo-rate network of environmental institutionsranging from the local level to domains sharedby sta� from international agencies andChinese organizations. They have enactedbold reforms and vigorously cracked down onpolluters. Yet the paper argues that the elab-orate panoply of environmental institutions

World Development Vol. 27, No. 7, pp. 1227±1245, 1999Ó 1999 Published by Elsevier Science Ltd

All rights reserved. Printed in Great Britain0305-750X/99/$ ± see front matter

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* I am very grateful to Jiang Hong Ji, who helped lay

the foundation for this paper, and to David McCa�rey

and two anonymous reviewers, who helped bring it to its

present form. Addie Napolitano prepared the manu-

script with great patience and skill. I appreciate research

assistance from Brian Halber, comments on previous

drafts from Thomas Shen, Sheng Shuo Lang and

Christopher Wieda, and generous support from the

Nuala McGann Drescher Foundation. Final revision

accepted: 21 November 1998.

1227

lacks sustained political, material and societalsupport that could counter far strongerimperatives of economic growth. Two majorreasons for the policy system's weakness areexplored. First, its vertical, top±down devel-opment re¯ects the low salience of environ-mental protection for the general public.Second, contextual and structural obstacles3

impede e�ective use of conventional regulatoryapproaches, led by either state or marketforces.

The problem of environmental regulation ina rapidly-growing low-income country isapproached primarily from an institutionalperspective used in comparative policy studies(Hall, 1986; Di Maggio and Powell, 1991). Thefocus on state institutions re¯ects their prom-inence in China's authoritarian politicalsystem. Yet state leaders ®nd it di�cult to ridethe tiger of economic growth (White, 1993),and to counter economic forces' capacity totransform society and institutions. Increas-ingly, as Child (1994) suggested, institutionallenses focused upon China may need to drawinsights from political economy. In this study,economic forces unleashed by the post-Maoleadership's liberalization initiatives are treatedas the main contextual factor a�ecting thecapacity of both domestic and internationalo�cials to shape China's environmental regu-latory system.

More precisely, the key contextual factor forChina's contemporary environmental o�cialsis the sweeping economic reforms initiated in1978 by the late Vice Premier Minister DengXiaoping, who took charge following nearlythree decades under Mao Zedong's idiosyncra-tic rule. Reforms entailed both economicliberalization and decentralization initiatives.They sought to (a) establish the importance ofmerit, (b) promote the use of material incen-tives, (c) encourage the growth of private andcollective enterprises outside the state sector,(d) decentralize economic administration andallow scope for market forces, and (e) openChina to the international economy (Lieberthal,1995).

As such policy initiatives unfetteredeconomic forces, state institutionsÐde®ned as``recognized practices consisting of easily iden-ti®able roles, coupled with collections of rulesor conventions governing relations among theoccupants of these roles'' (Young, 1986)Ðfacedunprecedented challenges which they were ill-prepared to meet, including environmentaldegradation.

The Chinese system's traditional Leninistarchitecture was oriented toward politicalcontrol, through multiple administrative layers.Each layer was supposedly overseen by apolitical unit of the Chinese Communist Party(CCP), resulting in an extraordinarily complexnetwork of horizontal and vertical authority(Lieberthal, 1995). Economic reforms anddecentralization initiatives have variegated thepicture. The impact of interlocking party-staterelations upon environmental management isnow in¯uenced by a locality's material andhuman resource base and by the policy issue inquestion. Some policy issues may be addressedthrough clear guidelines and close supervision;others require local discretion and thus inviteregional dialogue on ways to reconcileeconomic pragmatism with environmentalprinciples.

The ensuing section traces the developmentof institutions and structures to counter envi-ronmental degradation. The problem increas-ingly drew o�cial attention with wideningsocietal pursuit of economic opportunities andconsumer goods that strained the physicalenvironment, particularly small industries andmotor vehicles. De®ciencies in domestic envi-ronmental expertise were partially addressedthrough collaborative ventures with interna-tional agency sta� and consultants, funded inpart by foreign aid. China's environmentalpolicy system thereby acquired a componentthat spans traditional domestic and interna-tional boundaries.

Activities of representative internationalagenciesÐthe World Bank and United NationsDevelopment Programme (UNDP)Ðcannot bediscussed in detail. Their place in China'senvironmental policy system is noted ®rst toillustrate its vertical development and second,to explore the entire system's capacity to pursueenvironmental regulation through either of thetwo standard models in public policy literature.One is led by the state, which sets and enforcesstandards; the other is driven by market forces.

When policy analysts focus upon abstractmodels of states and markets and disregardpolitical, institutional and social contexts, it iseasy to concludeÐas many did in Eastern andCentral EuropeÐthat a ``big bang'' pattern ofchange is not only possible but within reach(Chandra, 1995; Amsden et al., 1994). Atten-tion to contextual and structural obstacles toinstitutional change may o�set possible distor-tions from the use of models derived fromWestern theory and practice.4

1228 WORLD DEVELOPMENT

2. THE EMERGENCE OF CHINA'SENVIRONMENTAL POLICY SYSTEM

The relationship of China's environmentalpolicy system to generic regulatory modelscannot be considered without a basic under-standing of catalysts that have sparked thesystem's initiation and expansion. Regulationentails state e�orts to constrain rather thanforbid activities that challenge public purposes,such as the protection of public health. Impetusfor regulation may come from society or fromthe state itself. Thereafter, the development ofnational regulatory systems may be studied ontwo dimensions. One follows a lateral hori-zontal axis if environmental policy andmanagement involves members of society,including the general public and private busi-ness interests (Francis, 1993). The seconddimension is vertical, and is marked by adeconcentration of central regulatory authorityto other administrative entities.

The United States o�ers a classic example oflateral environmental regulatory system devel-opment. During the 1960s, demands for stateregulation of economic activities arose fromsociety rather than from state initiative. Publicpressure prompted political and then adminis-trative action, leading to the establishment ofthe US Environmental Protection Agency in1970. Since the early 1970s, the resulting regu-latory system has followed a lateral trajectorythat re¯ects widening involvement of businessand industry groups to counter unwantedrestrictions, and also, political leaders' reluc-tance to identify themselves with potentiallycontroversial regulation.

A contrasting pattern emerged in would-bedeveloping countries including China, Indiaand Latin America. In the absence of strongdomestic o�cial or public support for envi-ronmental protection, environmental policysystems received a jump-start from externalstimuli. The 1972 United Nations Conferenceon the Human Environment in Stockholm wasperhaps the most important impetus for insti-tutional change (Khator, 1991; Sinkule andOrtolano, 1995; Hopkins, 1995). Environmen-tal concern was one of the ®rst vectors ofinternational contact for China as it recoveredfrom the turbulent and introspective nationalcatharsis which the Maoist leadership called acultural revolution.

China's ®rst organization concerned solelywith environmental protection was establishedin 1974. It was to coordinate national e�orts

from the State Council, or top governmentbody representing ministries and led by the vicepremier. The State Council's EnvironmentalProtection Leading Group had no administra-tive authority until 1987, when NEPA emergedfrom the long shadow of a powerful ministry togain cabinet-level status as an agency directlyunder the State Council. Similarly, China'sframework of environmental law made a low-key entrance when an Environmental Protec-tion Law was enacted on a trial basis in 1979.The law speci®ed important new industrialpollution control measures but often wasdisregarded until it acquired permanent status adecade later (Sinkule and Ortolano, 1995).

Bold steps taken by Mao Zedong's successorsto loosen socialist constraints on economicgrowth contrast sharply with their tentativesteps to moderate its unwanted e�ects. Untilthe early 1990s, the late Mao Zedong mighthave dismissively characterized the environ-mental policy system as a ``paper tiger''. Thetest of a ¯edgling institutional framework'smettle comes when it seeks to limit activitiesthrough regulation.

(a) Catalysts for regulation in China

After China launched an economic reformprogram in 1978, its Gross Domestic Product(GDP) registered one of the world's highesteconomic growth rates, averaging 9.3% eachyear. The magnitude of the environmental tollexacted by growth did not engage and sustainclearly visible o�cial attention until the early1990s. In the meantime, the 1980s were markedby the vertical spread of an institutional struc-ture, on the initiative of state leaders and suchinternational agencies as the World Bank andUNDP.

National policy authorities approved anetwork of environmental protection o�ces toextend environmental controls to lower levelsof government, ranging from the provincial andcity levels to districts, towns and villages. Theircharge was to implement national and localenvironmental regulatory measures; bolsterNEPA's authority, monitor performance,maintain records and collect fees for violations.Help in coordinating environmental responsi-bilities was available from environmentalprotection commissions comprised of o�cialsat the county or city levels, as well as provincialand national levels of government (Sinkule andOrtolano, 1995).

ONE-FIFTH OF THE SKY: CHINA'S ENVIRONMENTAL STEWARDSHIP 1229

Economic reforms provided the context forinternational agencies' involvement in China'senvironmental policy processes and extendedthe system's vertical development into anarena transcending domestic and internationalboundaries. China is Asia's leading recipient ofenvironmental loans, partly because its leadershave welcomed environmental assistance andnew technology. Some analysts have suggestedthat the vast foreign component in China'senvironmental protection re¯ects domesticleaders' unwillingness to spend money foruncertain returns (Jacobson, 1994; Whitcomb,1992). Others stress state leaders' interest inwinning China recognition as a pivotal forceon a global stage (Kim, 1994). Both perspec-tives may help account for the size of China'sforeign environmental assistance. In any event,China's leaders have taken a proactive role inenvironmental policy formulation, and veryvisibly so in international arenas. China hassigned or acceded to more than 50 conventionson the environment (Roth, 1994). Its relativelyspeedy and comprehensive environmentalpolicy statements, such as the national strategyfor the phaseout of ozone-depleting substances(ODS) and China's Agenda 21 won praisefrom World Bank and United Nations agencypersonnel.5

In turn, international agencies and businesshave welcomed opportunities to work in theworld's largest market. Lending for environ-mental protection has become the fastest-growing area of the World Bank's program inChina, while the less well-endowed UNDP hasprovided expanding levels of assistance toChina since its country o�ce opened in Beijingin 1979. Both agencies are engaged in a widerange of environmental activities in China,including pollution control, environmentalcleanup and training. They have advised onpolicy formulation and sought to strengthenthe capacity of NEPA's growing sta�. Throughtraining, international agencies play an impor-tant role in public environmental education(Hopkins, 1995), although the impact is di�-cult to measure.

In sum, the vertical development of China'senvironmental policy system contrasts with thelateral development of its US counterpart.Factors that may help explain China's alter-nate path are brie¯y noted before turning toan assessment of a watershed period inthe system's development, when it adoptedapproaches associated with both state andmarket-led models of environmental regulation.

(b) Factors supporting vertical development

(i) Poverty and the focus on growth

Three major factors encouraged China'senvironmental policy system to develop verti-cally, like Jack's mythical beanstalk, ratherthan horizontally, like a ®eld of dandelions.First, if a�uence and ``post-materialist'' valuesbuoyed the US public's environmentalconsciousness in the 1960s and 1970s, povertyand the pursuit of economic opportunitiesfocus attention in China (Starr, 1996). China'sper capita gross national product (GNP) wasonly US $620 in 1995, which ranked slightlyhigher than ®gures for Senegal and Hondurasbut below that for Cameroon (World Bank,1997, p. 214, Table 1). The low general stan-dard of living in China is suggested by ®guresshowing that roughly 100 million Chinese livewithout electricity. The average Chinese usesonly about 3% of the average American'sannual energy consumption, despite broadlysimilar temperature distributions (Lieberthal,1995).

(ii) Limited environmental information

Second, public concern may re¯ect a lack ofenvironmental information. One of the ®rstmajor early writers on ``post-materialist'' values(Inglehart, 1977) cheered international envi-ronmentalists when he reported that notwith-standing poverty and limited environmentalinformation, Chinese citizens proved the mostwilling among respondents in a 39-nationsurvey to pay higher taxes to protect the envi-ronment (Inglehart, 1995). Inglehart's ®ndingsare questionable in view of the minusculeproportion of the Chinese public that paidtaxes, and therefore understood higher taxes asa real possibility rather than a purely hypo-thetical question.

Even if the question of taxes for environ-mental protection made sense in the Chinesecontext, it would be as di�cult for the averageChinese as it is for his or her US counterpart tomake informed decisions about the relativelong-term value of lowly ¯ora or fauna versus agiven commodity.

Despite o�cial e�orts to publicize environ-mental concerns that intensi®ed beginning in1996 (China Environment News, May 1997)information remains limited, as is direct evi-dence regarding the Chinese public's environ-


mental attitudes and behavior. More than 80%of the 4000 persons interviewed in a nationalsurvey said they had only meager knowledge ofenvironmental issues. Respondents rankedChina's environmental problems sixth in a listof possible matters of greatest concern, behindin¯ation, education, social security, populationand social morals. More than 60% agreed withthe statement, ``China is rich in various naturalresources and there is no need to worry aboutthem'' (China Environment News, April 15,1996).6 Many visitors to China o�er impres-sionistic evidence of the ``throwaway culture''that may accompany increasing consumptionof nondurable goods, and the plastic wrapassociated with ``white pollution'' (ChinaEnvironment News, April 15, 1998, p. 3; NewYork Times, December 8, 1996).

(iii) Limits on participation and e�cacy

Third, the widening public participation andevidence of an expanded sense of personale�cacy reported in the US during the 1960s(Bosso, 1987) are not salient features ofcontemporary China. Certainly, the extent ofvoluntary citizen participation during the 1990scontrasts sharply with restrictions and state-mobilized participation of the 1950s to early1980s. State leaders have expressed verbalsupport for public participation (see, for e.g.,China Environment News, December 15, 1997)and have even permitted the existence ofnongovernmental organizations (NGOs).

New associations add complexity and colorto the standard-issue gray social fabric of theMaoist era, but the low salience of environ-mental issues provides a weak foundation forenvironmental associations. Such organizationsheld no signi®cant representation among the200,000 groups on o�cial rosters (WashingtonPost, June 4, 1996; Howell, 1995; Edmonds,1994).

It is impossible to gauge average citizens'sense of e�cacy regarding environmentalparticipation. An anecdotal account of aShanghai resident's attempt to goad o�cialsinto removing urban garbage illustratesimpediments to widespread perceptions ofpersonal e�cacy, but at the same time, atteststo signi®cant societal change. As journalist SethFaison observed, ``In China it is a sign thatsociety is progressing to a state of ordinaryurban frustrations when a resident can openlyaccuse o�cials of breaking the law and su�er

no retaliation.'' Provided malcontents do notorganize politically, they ``can make all thenoise they want'' (New York Times, April 23,1998, p. 4).

China's rapid economic growth has perhapsprovided legitimacy for authoritarian leaderswho have restricted popular political partici-pation. The contentious lateral development socharacteristic of the US environmental regula-tory system has not occurred. State leaderstherefore had a free hand in the design of aregulatory system to moderate unwantedexternalities of economic growth. The range ofpossible models used in other settings is brie¯yreviewed.

3. MODELS OF ENVIRONMENTALREGULATION

Four types of environmental policy systemsmight be placed along a continuum rangingfrom the idealized perfect market to its oppo-site extreme, depicted by a chimera of full statecontrol. The variants include:

Ð ``pure'' state;

Ð state-led standards and enforcement;

Ð ``market-based'';

Ð ``pure'' market.

The ®rst and fourth variants are more theo-retical than real. The ``pure'' state approachdoes not necessarily imply regulatorycommand-and-control. Full state ownershipcan even be seen as an alternative to environ-mental regulation (Francis, 1993). MaoistChina illustrates the point. The leadership'spriority concerns were heavy industrial devel-opment and the attainment of ``great power''status. Environmental quality was not a salientpublic issue (Lieberthal, 1995). Even if it hadthe status of a routine housekeeping issue,mechanisms to enforce control were missing.

The ``pure'' market approach has fervent andvocal adherents in various US think tanks, whomaintain that environmental problems are bestaddressed through privatization and the estab-lishment of property rights, even in air andwater. In their hypothetical ``pure'' marketsystem, the state would play no role whatso-ever. As Dryzek (1997) observes, however, suchextreme views have had limited in¯uence onpublic policy. Contemporary environmentalpolicy makers generally select options from thecenter of the menu.


The two central categories di�er with respectto the pervasiveness of the state or market, andin the use of direct or indirect tools for envi-ronmental regulation. State-led systems utilizeo�cial environmental agencies to devise andenforce standards, and they rely upon o�cialexpertise. In the United States, general envi-ronmental policy goals espoused by Congresswere often translated into detailed speci®cregulations, illustrating what critics called acommand-and-control approach by hierarchi-cal bureaucracies (Rosenbaum, 1995; Andersonand Leal, 1989).

By contrast, market-based approaches mini-mize the role of the state and direct regulationin favor of such indirect measures as prices,incentives and penalties, such as taxes. Citizensmay indirectly in¯uence environmental qualitythrough individual decisions in the market-place. Advocates of market-based approachesemphasize their ¯exibility, and choices avail-able to both producers and consumers.

The two central categories are by no meansmutually exclusive. Both the United States andChina have experimented with tools associatedwith each variant. The characteristic fragmen-tation of environmental policy into separatecomponents concerned, for example, with air,water and soil pollution, inhibits uniformity. Inaddition, as Francis (1993) observes, sincesocial regulation is inherently controversial,regulatory systems are unstable. Diversity anddynamism make generalizations about anentire system of environmental regulationsuspect, and particularly in a large and complexcountry. The ensuing discussion will only seekto capture general trends with respect to thechanging composition of China's environmen-tal policy system since the late 1980s.

4. TOWARD STATE-LED STANDARDSAND ENFORCEMENT

Bardach and Kagan (1982) observed thatpolitical leaders often meet profound economicand social change with a volley of social regu-lations, to reassure both concerned citizens andnervous investors. In China, the latter includedinternational business representatives, whojoined the World Bank in advocating thedevelopment of a legal framework. Neitherformal laws nor the laws of the state werewidely used to order society in imperial Chinaor in the People's Republic (PRC) establishedin 1949 (Alford and Shen, 1995).

Beginning in the early 1990s, the scale andscope of Chinese leaders' response to pollutionevokes the ``tanks and planes'' approach(Reisner, 1986). An extensive body of envi-ronmental law was enacted at a breakneck pace(Alford and Shen, 1995). During 1991±95alone, 14 environmental laws were passed, 20administrative rules on environmental protec-tion enacted and more than 350 environmentalstandards were approved (Xinhua, April 21,1996).

The scope of o�cial ambitions is suggestedby major legal projects undertaken in the earlyto mid 1990s. Comprehensive law to replacethe cornerstone of environmental regulation,the 1989 Environmental Protection Law, wasscheduled for completion in 1997. Revisedversions of other 1980s-era legislation wereenacted by the National People's Congress(NPC), China's top legislature. They includeda 1995 statute strengthening the 1987 Atmo-spheric Pollution Prevention and Control Lawwith provisions to control pollution caused bycoal burning and automobiles. A new Law onthe Prevention and Control of Solid Wastewas adopted in October 1995, to take e�ect inApril 1996. In May 1996, the 1984 WaterPollution Protection and Control Law wasamended to strengthen standards of waterquality and pollution of both ground andsurface water. Further, an omnibus lawdeclared serious environmental pollution acriminal o�ense.

Yet even as the Deng regime devised newtools for environmental regulation, its reformstransformed the Maoist political and economicstructure. The relaxation of socialist constraintson incentives made pressures for economicgrowth the overriding contextual obstacle toregulation. Structural impediments to enforce-ment of state environmental standards include,fragmented authority and bureaucraticcomplexity; NEPA's position within thebureaucratic system; institutional de®ciencies;and imbalances between problems and agencyjurisdictions.

(a) Structural challenges

(i) Fragmented authority and bureaucraticcomplexity

Reforms subjected administrative bodiessteeled by the discipline of central planning andhierarchical control to a new and bewildering


segmentation of government authority thatsome China specialists call a ``fragmentedauthoritarianism model.'' Although a relativelycohesive group dominates the apex of power,government departments' control over theirspeci®c functional areas disperses authoritybelow elite levels of government. For example,NEPA has authority over matters concernedwith environmental protection. But lines ofauthority and responsibility blur when two ormore functional areas are involved. The frac-tured authority structure creates an obstaclecourse for agenda items requiring decisions byagencies with di�erent priorities.

If the concerned agencies cannot resolve theirdi�erences, a higher level of authority isconsulted (Sinkule and Ortolano, 1995). Ende-mic turf wars in the Chinese administrativesystem are not easily resolved, however, evenby the apex policy-making body responsible forenvironmental protection, the State Environ-mental Protection Commission (SEPC). TheSEPC serves as a forum for reconciling con¯ictsamong major ministries, for coordinating theiractivities and for facilitating enforcement ofenvironmental regulations. The SEPC'sauthority in such matters is limited by the needto seek consensus among its constituentmembers, consisting of representatives frommore than 20 ministries. The commissioncannot compel cooperation because it lacks anyformal mechanism that would allow it to do so.As a result, some strong ministries with theirown agendas simply ignore troublesome andpotentially costly environmental measures(Edmonds, 1994).

In much of China's policy system, frag-mented authoritarianism replaced hierarchicalcommand with negotiation, bargaining, andexchange among bureaucratic units (Lieberthaland Oksenberg, 1986; Lieberthal and Lampton,1992). A researcher with a keen eye to theground concluded that decentralization, andparticularly fragmentation of authority, wasthe major obstacle to e�ective environmentalpolicy implementation (Jahiel, 1994). Theresulting bureaucratic complexity and unpre-dictability undermined e�orts to fashion aregulatory system based upon uniform andimpartial standards.

(ii) NEPA's position in the hierarchy

NEPA's position in China's bureaucraticsystem constitutes a second structural factor

critical to analyzing its regulatory capacity.NEPA occupies a relatively lowly rung onChina's formal administrative organizationalchart. It shares that rung with ``administra-tions'' and ``bureaux,'' which fall below lineministries in terms of power, authority and®nancial resources. Not only is NEPA disad-vantaged vis-�a-vis such powerful ministries asthe Ministry of Chemicals and Industry, italso is lower than a more powerful organiza-tion concerned with environmental policy, theState Science and Technology Commission(SSTC). The imbalance in the two environ-mental bodies' resources and responsibilitiesoften provoked competition as decentraliza-tion and measures opening China to theexternal world raised new challenges andopportunities.

(iii) Institutional de®ciencies

If ``opening'' o�ered more opportunities thanchallenges for NEPA, the reverse was trueregarding decentralization. When the stateleadership relinquished decision-makingauthority to middle and local-level authorities,including provincial, municipal, county andtownship governments, party and stateauthorities at the middle and lower middlerungs of the system acquired new roles aspower brokers and gate keepers (Shue, 1994).Increasingly, as Edmonds (1994) observed,

decisions are not always made by the top leaders ofthe country, but can come from various levels of thecentral bureaucracy and can be modi®ed or haltedthrough bargaining between the center and theprovincial or lower level authorities or between vari-ous agencies or committees.

Local governments gained considerablediscretion in approving policies and regulations(Qu, 1990) through the 1979 EnvironmentalProtection Law, which established the legalbasis for local autonomy in environmentalmanagement.7 NEPA did not win corre-sponding mechanisms or central ®nancialsupport to enforce local compliance withenvironmental regulations. Environmentalprotection agencies at various administrativelevels maintain a ``leading and being led''relationship with local governments. It is aformal and institutionalized relationshipallowing local governments the right tomanage local environmental protection agen-cies' ®nance and personnel. In contrast, local


environmental protection agencies are juniorpartners in a ``guiding and being guided''relationship with environmental protectionagencies at higher levels. This means NEPAcan provide only guidelines rather than direc-tives to local environmental protection agen-cies (Liu, 1988). As a result, localenvironmental protection agencies are beyondNEPA's direct control.

(iv) Small institutions, large problems

The decentralized authority structure canrespond to varying local conditions, but localgovernments may lack the will and capability toresolve environmental issues that threaten localeconomic development. Field-level environ-mental o�cials face strong pressure from localgovernments at the same hierarchical levels.Increased local autonomy thus may thwartcentral government e�orts to improve envi-ronmental management. The brunt of tensionsexacerbated by con¯icting imperatives andjurisdictions is often borne by NEPA. Its weakauthority over local environmental protectionagencies is even more problematic when envi-ronmental policy is actually implemented inChina's provinces, autonomous regions andmunicipalities. If central command is therebyimpeded, central control becomes virtuallyimpossible.

Central directives may also encounter twoinstitutional obstacles arising from agencies'managerial capabilities and incongruencebetween their jurisdictions and environmentalproblems. As Wilson and Rachal (1977) notedin their study of the United States, relativelyjunior agencies in a still-new ®eld of socialregulation often lack necessary knowledge andskills. Others (e.g., Lo and Tang, 1994) makesimilar observations with respect to China, andnote that a high level of competency amonglocal environmental inspectors in large easterncities such as Shanghai and Beijing falls sharplyinland (Shanley, 1995).

Finally, local environmental protectionagencies cannot resolve an environmentalproblem or impose e�ective restrictions onpolluters unless their administrative jurisdic-tions exceed those of parties associated with theproblem (Chan et al., 1992a, b). Quite oftenthey do not. Folk wisdom holds that whennine dragons control the waters, overall waterquality is no one's responsibility (Jahiel, 1994,

p. 429). O�cial plans to install environmentalmonitoring equipment during 1997 may at leastprovide data needed to bring regional problemsinto clearer focus (China Daily, December 12,1996).

In sum, the institutional framework isweakened by its fragmentation and complexity,and thus is ill-equipped to challenge compellingin¯uences toward economic growth. Economicpressures head a list of ®ve contextual factorsimpeding state e�orts to set and enforce stan-dards.

(b) Contextual impediments

(i) Economic growth imperatives

The overriding importance of growth in ahuge country with relentless population pres-sure and limited arable land should not besurprising. State leaders are painfully aware oftheir constituents' severe resource constraints,and their own needs for revenues which cannotbe squeezed from the populace by weak taxbodies. Economic growth's priority in thereform era was underscored in 1983 by formerVice Premier Deng Xiaoping's famouspronouncement, ``To get rich is glorious.'' Sucha ringing endorsement of ``economic man'' didnot bolster the authority of NEPA and localo�cials charged with environmental regulation,particularly in inland regions that have notfollowed the booming east coast's path toprosperity.

(ii) Regional disparities

Regional imbalances constitute a secondcontextual impediment to state enforcement ofuniform environmental standards. China's vastand varying terrain has long permitted localdiscretion in the interpretation and acceptanceof central directives, as the hoary saying, ``Theheavens are high and the emperor is far away''(Sinkule and Ortolano, 1995) suggests. But thelate 20th century's unprecedented combinationof population pressure, resource consumptionand technological impact raises new dilemmasfor would-be regulators of economic growth(Chan et al., 1992a, b). It is likely that inChina, as in many other settings, regulatorylaxity may be used as an important bargainingchip in constituent provinces' or states'competitions for resources and opportunities(Francis, 1993).


(iii) Weak legal framework

The state's impulses toward environmentalprotection are limited by a weak legalframework and its uncertain enforcement.Recent attempts to develop and fortifyChina's legal framework run counter tocenturies of traditional practices guided bymoral precept and local custom rather thanformal law. The Maoist leadership largelyreplaced customary guidelines with ``rule byperson'' (Alford and Shen, 1995; Yang, Headand Liu, 1994). Its e�ects remain pervasive;thus Chan and his associates (1992a,b) foundthat Environmental Protection O�ce (EPO)o�cials in municipal Guangzhou could notregulate industrial waste water discharge bythe Guangzhou Paper Manufacturing Factorybecause the factory director's administra-tive rank was higher than that of the EPOo�cer.

(iv) Weak law enforcement

A campaign to close polluting enterprisesthat was launched in 1996 struck a vigorousblow to stereotyped associations of Chinesesociety with con¯ict avoidance. By April 1997,the state had forced the closure of more than62,000 small factories cited for environmentalpollution (China Daily, April 16, 1997).Crackdowns on polluting factories and o�cialwarnings about possible increased sanctions forindustrial polluters suggest a pronounced shifttoward a big-stick-wielding command-and-control regulation.

Such a move might please scholars who argueforcefully that the scope of environmentalproblems in China suggests a need for a uni®edand strong national organization with theauthority to command wayward bureaucraticagencies and enforce local compliance(Richardson, 1990; Vermeer, 1990). Yet thatcapacity for e�ective action could be achievedand sustained only if central o�cials consis-tently gave environmental protection toppriority and agreed on a clear agenda toachieve it (Lieberthal and Lampton, 1992).Since NEPA lacks both power equal to minis-tries that are deemed important, and formalmechanisms to control local environmentalprotection agency activities, it often holds fewcards to play when complex environmentalconcerns clash with both local and nationaldemands for economic growth. Enforcement

di�culties represent the Achilles heel of China'slegal system. NEPA o�cials concede thatChina's environmental degradation is chal-lenged less by a lack of laws than by their weakenforcement.

(v) Guanxi and the connection economy

Finally, the continuing importance of perso-nal connections that facilitate the ``reciprocalexchange of access to the distribution of scarceassets'' (Christiansen, 1994) or guanxi, under-mines prospects for uniformly ®rm environ-mental regulation. Forms of Chineseclientelism have changed over millenia, but likethe ancient and tenacious kudzu plant, suchexchanges may withstand attempted transfor-mation via the state or marketplace (Starr,1996).

5. INTERNATIONAL STANDARDS ANDENFORCEMENT

Since the role of China's citizens in envi-ronmental protection is circumscribed, therebylimiting the policy system's lateral develop-ment, a stronger impetus for change may comefrom the external environment. The impact ofexternal economic relations upon China'senvironmental policy system is a vast subjectfar beyond the scope of this paper. The focusinstead is on the potential short-term impact ofsuch external actors as the World Bank andmajor United Nations agencies, and particu-larly their capacity to strengthen China'senvironmental standards and enforcement. Thegeneral literature on the international devel-opment/environment conundrum and the roleof international agencies remains thin. Some-times the latter are portrayed as global envi-ronmental standard-bearers who override stateauthority and autonomy (Conca, 1995).Debate centers on whether such involvement isdesirable or an unwelcome manifestation of``green imperialism'' (Jacobson, 1994; Shiva,1993).

Table 1 illustrates some key pressures thatsupport and block environmental protectionmeasures. Since 1972, external forces havesupported the vertical development of China'senvironmental policy. Yet structure andcontext may be major limiting factors forinternational agencies involved in China'senvironmental management, thereby aggravat-ing such generic implementation problems as


bureaucratic in®ghting, occasional misman-agement of funds, inadequate monitoring andevaluation systems and resource constraints(Oksenberg and Economy, 1994).

Structural considerations a�ecting thecollaborative e�orts of international andChinese sta� include a fragmented andcomplex authority system; environmentalbodies' position within international anddomestic bureaucratic structures, institutionalcapacity and environmental problems thatloom larger than agency jurisdictions.

(a) Fragmented authority

On several levels, fragmented authoritycharacterizes the domain linking domestic andinternational agencies. First, there is noconsensus on environmental priorities andstrategies. The 1992 Rio Earth Summit repre-sented a high-water mark for global greenconsciousness, despite some skepticism in theSouth, but the tides retreated quickly, leavingworld opinion leaders preoccupied witheconomic and social priorities. A senior USo�cial steeped in international environmentalnegotiations noted that even if the environ-ment was a high-pro®le issue for leaders ofprosperous industrialized countries, theywould not necessarily agree on goals andstrategies,8 since they face di�erent con®gura-

tions of international and domestic constitu-encies. Di�erences may widen when the issue inquestion divides opinion leaders representingnations in the North and South, as illustratedby the 1997 Kyoto summit on global climatechange.

Fragmented authority also re¯ects heteroge-neity among agencies that are key players ininternational environmental policy andmanagement. A glance at the World Bank andUNDP illustrates the point. Their dissimilarpriorities and styles of operation often hinderscollaboration (COWIconsult, 1995). Forexample, while the World Bank is extremelycentralized and Washington-based, the UnitedNations is comprised of many bodies located invarious cities of the world. Generally, theUNDP maintains a relatively strong presencein project areas of low-income countries that itserves,9 while the World Bank operates moreindirectly, through domestic institutions(COWIconsult, 1995).

A longstanding rivalry between senior WorldBank and United Nations sta� has beenheightened in recent years by dwindlingbudgetary allocations from industrializedcountries. Reduced aid sharpens competitionfor opportunities in important states such asChina, which o�er vast scope for assistance fordevelopment and environmental purposes. Theadvantages of competition for aid recipients arenot lost on the Chinese leadership. Their rela-tive command of critical resources, including

Table 1. Factors supporting and blocking environmental protection measures

Pressures for environmental standards andenforcement

Domestic obstacles

External1972 Stockholm environmental conference Political turmoilInternational agreements Weak institutionsFinancial and technical assistance Leadership's preoccupation with economic growth

over environmental improvementExport requirements

DomesticNEPA established Weak institutionsRegional and local environmental agenciesestablished

Bureaucratic complexity

Environmental priorities set (e.g. Agenda 21) Environmental e�ects treated as `externalities'Reliance on coal

population pressureEnvironmental protection laws devised Lack of legal traditionsStricter environmental laws Limited public supportEconomic decentralization Interregional rivalries


access, in¯uence and global economic andenvironmental leverage, gives them importantbargaining chips with even the strongest bilat-eral or multilateral forces. This in turn exacer-bates interagency competition.10

(b) Weak environmental agencies

The second structural impediment to agencye�ectiveness mirrors the institutional weaknessof NEPA within the Chinese bureaucraticsystem but projects it upon a global scale.Neither the World Bank nor the UnitedNations system is driven by its respectiveagency's environmental components (Rich,1994; Childers and Urquhart, 1994; Birnie,1994). The latter seldom can claim the statureof institutions representing economic and tradeinterests in international fora, particularly theWorld Trade Organization.

(c) Limited institutional capacity

Two aspects of institutional capacity, thethird structural factor, merit brief attention.First, for implementing agencies as for theChinese leadership itself, decentralization hasboth positive and negative implications forpolicy implementation. In the wake of reforms,and particularly decentralization, Beijing's ownability to assure China's compliance withinternational agreements such as the MontrealProtocol to Protect the Stratospheric OzoneLayer or the Convention on InternationalTrade in Endangered Species (CITES) may beundermined in regions beyond the regime'seasy reach, and in proliferating small andmedium-sized production units (Lieberthal,1995). Provincial and local bodies become allthe more important, as the World Bank andother international agency sta� learned throughpainful experience with institutional bottle-necks.

While the Bank's Washington-based sta� inparticular had championed decentralizationand expanded private sector initiative, a Bankrepresentative responsible for environmentalprojects in China conceded that in the early1990s, hierarchical central control over state-owned enterprises had facilitated decisiveactionÐto replace ozone-depleting substances(ODS), for example. Subsequent liberalizationslowed and complicated policy implementa-tion. By mid-1996, China's consumption ofODS had risen far beyond early expectations

(United Nations Environment Programme,1996).

Neither the Chinese state nor external agen-cies have the authority or capacity to deviseand enforce environmental standards through-out China's vast territory. Market forcesunrestrained by government regulation and thestate's inability to check pollution yield prolif-erating small and medium-sized enterprisesusing low-grade equipment. Added to theirpollution is that from millions of householdsdependent on low-grade coal for energy (Ryanand Christopher, 1995).

Organizational learning is a second aspect ofinstitutional capacity a�ecting both interna-tional agencies and Chinese colleagues inNEPA. Environmental management is a rela-tively new ®eld, particularly in low-incomecountries, and much is discovered through trialand error. NEPA sta�, including many juniorpersonnel, may learn specialized technicalinformation and develop organizational skillsthrough interaction with international agencyconsultants. The latter must learn to adapttechnical knowledge to a new context, onemined with unknown forces such as local orregional o�cials who can facilitate or hinderproject work.

(d) Small institutions, large problems

Incongruent agency mandates and jurisdic-tions represent a fourth structural factorfacing international agencies and theirChinese counterparts. China's complex andfragmented management structure bewilderstask-oriented international sta� (Oksenbergand Economy, 1994; interviews with interna-tional agency sta� in Beijing during 1994). Inaddition, a global marketplace for contra-bandÐwhether tiger bones or pirated soft-wareÐde®es multinational e�orts at control,even when undergirded by Chinese o�cials'visible use of the ``big stick'' approach toregulation (China Economic Information,December 18, 1996).

6. TOWARD A MARKET APPROACH

In contrast to those who see more o�cialintervention to improve China's environmentas feasible and desirable, many more scholarsrecommend increased reliance upon themarket (Ross, 1988; Boxer, 1989; Lo and


Tang, 1994). The state has indeed moved inthat direction. A major environmental policystatement articulated in China's Agenda 21(China, 1993) endorsed market approaches,and repudiated measures that hijack theobjective of sustainable development, such asenergy subsidies. It endorsed the polluter lia-bility or ``polluter pays'' doctrine enshrinedin US and Western European regulatorypolicy. It also called for preferential taxationpolicies for environmental protection andrehabilitation projects, and loans to supportthe development of environmentally soundtechnologies.

Despite o�cial support for market approa-ches, their e�ectiveness is still constrainedby contextual and institutional factors relatedto the overriding importance of economicgrowth and the maintenance of politicalcontrol. Key structural obstacles include, theproduction sector's propensity to treat envi-ronmental problems as mere externalities ofgrowth, and corporatist state-societal rela-tions.

(a) Structural obstacles

(i) Ine�cient production systems

The environmental policy system arose in aneconomic landscape dominated by state-ownedenterprises operating under the framework ofcentral planning. At ®rst sight, the prevalenceof state-owned enterprises in China's industrialsector may seem the major barrier to thecountry's full participation in a market-basedeconomy. About 100,000 industrial enterprisesare in the state sector, employing more than100 million workers and accounting for justunder half of China's industrial output (Starr,1996). Until the recent past, most state-ownedenterprises (SOEs) were bound to the tradi-tional planning process, thus they were notgoverned by conventional market rules. Theywere not responsible for their operations orpro®ts and often substantial losses, nor was itpossible to determine their legal ownership(China, 1994). An SOE charged with environ-mental pollution could thus escape censuresince no legal owner could be identi®ed andheld accountable.

Although SOEs represent China's mostpolluting industriesÐincluding chemicals,energy, iron and steel and pulp and paperÐitis too easy to identify public ownership as theproblem (see, for, e.g., World Bank, 1996).

Such re¯exive tendencies often characterizeanalyses based upon abstract models that failto check assumptions against empirical evi-dence. The need to do so is underscored byJahiel's ®nding that environmental protectionbureaus were more able to regulate SOEs thanprivate and collectively owned ®rms, becauseresidual pre-reform era institutional relationswith SOEs persisted (Jahiel, 1994). Thissupports Donahue's argument that the formof ownershipÐwhether public or privateÐdoes not foretell organizational behavior, it isthe institutional arrangements that matter(Donahue, 1989). Both studies challengeconventional public policy wisdom basedlargely upon Wilson's and Rachal's classic(1977) study illustrating US o�cials' di�cul-ties in regulating administrative colleagues'behavior.

Since state o�cials undertook economicreforms, it is no longer possible to speak ofChina's SOEs as a homogeneous group. Tovarying degrees, reforms have percolated evento such erstwhile sacred cows (Lee, 1996; Ding,1995). The key structural factor impedingmarket-based environmental reforms directly¯ows from the emphasis on economic growth:many producers still fail to arrest or preventexternalities and simply dump environmentalcosts onto the general society.

China's 3000 largest ®rms are responsible for60% of the country's industrial discharges. The25 million smaller township and village enter-prises account for 20% of industrial output buthave paid only a nominal proportion of pollu-tion charges (OECD Observer 192, February±March, 1995). A senior NEPA o�cial said inan interview that NEPA did not have a fractionof the resources needed to address pollutionfrom proliferating rural small-scale private orcollective enterprises employing antiquatedtechnology developed without regard toecological consequences.11

Chinese o�cials punctuated important stepstoward a market-based environmentalapproach in 1993, when a charge was intro-duced for industrial wastewater based on thequantity discharged into the environment(OECD Observer 192, February±March, 1995).Its impact is di�cult to assess, because a�ectedindustries were not always motivated by pro®ts.Since charges were modest and weaklyenforced, o�cials readily concede a need fortougher measures against pollution. Theysought to clear the state's own dingy record byremoving subsidies on coal and petroleum


productsÐa major step for the world's thirdlargest energy user (Hammer and Shetty, 1995).Yet fundamental impediments to market-basedenvironmental management remain.

(ii) Corporatism

For example, a second structural obstaclelies in the state's relationship with societalgroups including producers and citizens. Amarket-based regulatory system cannot worke�ectively unless participants have a measureof information and autonomy. China does notmeet these conditions. Much of the country'sindustrial and business sector still dependsupon the state for its means of production,independent capital, material supplies andmodes of operation. This promotes clientelistrelationships between political patrons andthose who can pay for protection (Solinger,1992).

The state's ambivalence about publicparticipation is suggested by its continuedcontrol over the cumbersome and restrictiveregistration process for nono�cial organiza-tions. Neither the o�cially registered norunregistered informal organizations stray farbeyond boundaries de®ned by the state. InShue's assessment, China's fragile civil societyis

enveloped in a rhetoric of corporatist interpenetrationand encapsulated in a self-conception that stressescorporatist consultation, cooperation and harmonyin action with the party/state and its aims (Shue,1994).

Other scholars (e.g., White, Howell andShang, 1996) concur, noting that social orga-nizations which optimists see as incipient civilsociety also serve important purposes for thestate. They provide a new indirect channel toincorporate society and preclude other forms ofassociation that might threaten party/statepower (White, Howell and Shang, 1996).

This is not to suggest that corporatism is apermanent shroud over Chinese society. Frag-mentation and pluralism in the state system asa whole also loosen the weave of corporatism,particularly at the local level. In local arenas,the dualism that Chandra (1995) observed inother settings is particularly visible, in anunstable and dynamic synergy of statist corp-oratism and civil society (White, Howell andShang, 1996). Yet the most important coun-tervailing force against potential collective

action for environmental protection may stillbe the state itself.

(b) Contextual obstacles

(i) Limited property rights

Those Dryzek (1997) calls `èconomic ratio-nalists'' would point to China's mixed econ-omy, and particularly its limited and checkeredprivate property rights, as the fundamentalcontextual obstacle to market-based environ-mental regulation. In the words of two suchanalysts, `ènvironmental problems must beunderstood more as failures by government tospecify property rights than as o�shoots ofprivate pro®t-seeking.''12 Such views areechoed by Dua and Esty, who decry what theysee as inevitable degradation of shared resour-ces in China and Vietnam (Dua and Esty, 1997)as grimly foretold in Hardin's (1968) fabledsheep-trampled commons.

(ii) Weak legal system

Since `èconomic rationalists'' often de®negovernment's central task as defending clearlyestablished property rights, it is not surprisingthat China's leadership is also faulted on suchgrounds (Dua and Esty, 1997). Apart fromguarantees on business contracts and intellec-tual property rights, critics of Chinese policyhave called for safeguards guaranteeing free-dom of information, equal opportunity and fairand consistent business practices. It is only fairto note that China's leaders have madetremendous strides to promote such practicessince the tempestuous days of Mao's era. Thosewith longstanding knowledge of the Chinesecontext credit his successors for their e�orts topromote market development. The politicalleadership has even encouraged entrepreneur-ship within the state itself. Since the Chinesearmy must mobilize perhaps a third of its ownbudget, it was compelled to ``dive into the sea,''a Chinese colloquialism suggesting the bound-less opportunities and unseen hazards ofentrepreneurial activity.

(c) Summary

In sum, if in 1986, the distance between the``pure state'' and ``market-based'' models ofenvironmental policy systems seemed like ajourney of a thousand miles, China has short-


ened the distance by many steps. In the shortterm, however, while large parts of China arehurtling toward the ``pure market'' model,some worry that it might bypass the intervening``market-based'' system of environmentalmanagement, despite o�cial e�orts to deviselaws and penalties for polluters. Even the pro-market World Bank cautions that ``the market''alone will not assure a healthy environment(Hammer and Shetty, 1995). Pressures foreconomic growth are compelling but o�cialand societal impulses for environmentalprotection are weak. Amid profound economicchange and political uncertainty, it would beunrealistic to expect sweeping and e�ectiveinitiatives from the state.

If initiative rests with society, the immediateoutlook is not altogether encouraging. At leastin a country's early phases of economic growth,people may generally treat the physical envi-ronment as a context for the pursuit of materialgain and upward socioeconomic mobility,relegating the debris of externalities to futuregenerations. In China, capitalism's expansionmay work against popular interest in collectiveaction to in¯uence public policy by promotingsocioeconomic di�erentiation and individual-ism, and whetting citizens' appetites for long-denied consumer goods (Chan et al., 1992a). Itmay also reinvigorate corporatism by promot-ing a symbiotic relationship between the stateand a rising entrepreneurial class that has thusfar shunned the political role of some 19thcentury European bourgeoisie (Moore, 1966;Solinger, 1992), in favor of less visible dyadicties of guanxi.

7. EXTERNAL PRESSURES TO ENLARGETHE MARKET'S ROLE

China's environmental policy system is notpoised for a ``big bang'' trajection across acontinuum of regulatory alternatives at thecommand of the political leadership. In turn,international agencies supporting market-basedregulation face a key structural obstacle in theform of an activist state, and a contextualobstacle arising from global economic compe-tition that often suppresses countervailingpressures for environmental protection.

(a) The activist state

China's bullish stance supporting environ-mental action in international settings can be

associated with clear interests of state leaders,namely, the pursuit of economic and technicalassistance and international prestige (Kim,1994; Whitcomb, 1992). Both internationalagencies and US leaders that have tried to pushChina have encountered direct and/or indirectresistance. China's leaders ignored considerablepressure from ``economic rationalists'' withinBretton Woods institutions and US universitiesto dismantle their mixed economy and ``marketsocialism'' in favor of capitalist democracy. Inrecent years, the state's gradualism has won ameasure of international respect, and the lead-ership's terms for interaction often have beenaccepted.

It bears repeating that the formal domain ofChina's interaction with international agenciesis small and restricted in scope. Issues coveredby the international agreements China hassigned, including the phaseout of ozone-de-pleting substances and shrinking biodiversity,are not priority environmental concerns forstate leaders, as are air and water pollution.

Within the domestic arena, state leadersmaintain considerable central control over thestructure of China's interaction with interna-tional agencies. The Chinese leadership's insis-tence that the latter retain Chinese consultantswhenever possible rather than their high-pricedinternational counterparts may serve asanother way for state leaders to maintaincontrol while developing indigenous capacityand limiting costs.

The reductionist perspective that is promotedamong international agency sta� and consul-tants by their involvement in speci®c technicalprojects, such as ODS phaseout activities in agiven enterprise, is enhanced by state proce-dures channeling communications throughapproved agency windows. It is perhaps notsurprising that the US-based middle-levelinternational environmental agency sta� inter-viewed had a keen sense of technical issuesrelated to their mandate but said their know-ledge of NEPA's overall structure and role insociety was hazy. NEPA's frequent reorgani-zations behind closed doors further served toblur international agency sta�'s perspectives ofthe larger picture of Chinese environmentalpolicy and institutions.13

(b) Pressures for growth

An utopian vision may have inspired a recentenvironmental study entitled Clear Water, Blue


Skies, jointly prepared by NEPA and theWorld Bank. The document attests to theincreasing size of international environmentalaid to China and to o�cial concern. Yet sinceshort-term economic growth is the priorityconcern for state o�cials as well as externalagencies and economic actors (Whitcomb,1992; Jacobson, 1994), economic and environ-mental objectives often seem to work at crosspurposes. A World Bank China Country Briefreleased in September 1997 highlighted envi-ronmental costs:

China's past two decades of rapid economic growth,urbanization, and industrialization have been boughtat the cost of steady deterioration of the environment.Ambient concentrations of particulates and sulfurdioxide as well as several water pollutants are amongthe highest in the world, causing damage to humanhealth and lost agricultural productivity estimated at$54 billion a year, or about 8 percent of China'sGDP in 1995. Air pollution alone contributes to thepremature death of more than a quarter of a millionpeople each year [http://www.worldbank.org/html/extdr/o�rep/eap/china.htm].

Some observers might wonder if o�cial plansto spend nearly $60 billion on the environmentduring the Ninth Five-Year Plan (1996±2000)(Xinhua, December 18, 1996) made sense sincethe money would not eliminate resourcedegradation. Why not simply follow the high-way taken by reckless industrial pioneers?

State o�cials have promised to facilitateeach household's access to refrigerators, andto expand China's total vehicle market(including trucks, buses and cars) from about1.45 million vehicles in 1995 to perhaps threemillion by the year 2000. In the next century,the number of cars could rise to a staggering50 million (China Environment News, March15, 1998).

As Chinese o�cials nevertheless sought toraise the priority of environmental protectionin the second half of the 1990s, they sometimesfaced a powerful undertow toward business-as-usual economic growth from the industrializedworld. China is a prime market for the latter.Apart from the ``green'' or avowedly environ-mentally benign technology that has facederratic and sluggish demand in the UnitedStates, as the country displaces state-led envi-ronmental regulation with market-basedapproaches, (Moore and Miller, 1994; MiamiHerald, January 20, 1997), some Chinesecomplain that Western-based multinational®rms dump obsolete and/or polluting equip-

ment in China. Western industrialists are alsocharged with overestimating Chinese demandfor autos and with disregarding signals of o�-cials' plans to replace polluting leaded gasolinewith less harmful unleaded fuel by the turn ofthe century (South China Morning Post, Janu-ary 16, 1997; China Economic Information,December 17, 1996).

In turn, foreign investors complain that stateo�cials' moves toward market-based approa-ches through the polluter pays doctrine mayprove a mixed blessing for foreigners who mayeasily be made scapegoats. It is considerablyeasier and potentially more rewarding for thestate to collect ®nes from foreign companiesthat are believed to have deep pockets than it isto collect from state-owned enterprises. Manyinvestors are allotted sites in heavily contami-nated industrial zones, and may be billed fortheir cleanup (Shanley, 1995; China BusinessReview, January±February 1997).

It would be unfair to dismiss the possibilitythat economic growth and widening globaltrade may support environmental protection.Evidence on that subject is limited and mixed,and certainly stronger for the EuropeanCommunity than for the wider and moredisparate General Agreement on Tari�s andTrade (GATT) (Vogel, 1995). Once China joinsthe latter's World Trade Organization, thesalience of environmental protection may rise,as the impact of China's externalities of growthgains a clearer focus and audience.

Experience with the world's ®rst environ-mental agreement, the Montreal Protocol toProtect the Stratospheric Ozone Layer,provides some concrete evidence that China'sdrive to export its commodities may faces traderestrictions aimed at environmental protection.On balance, however, the conclusion here isthat environmental activists remain a weakconstituency vis-�a-vis much more powerfulpressures concentrating state leaders' attentionon economic growth, and leaders carry thosepriorities to international arenas.

(c) Summary

In sum, it would seem far-fetched to view theexternal component of China's environmentalpolicy stream as a potential catalyst for majorchange, at least by the century's end. Over aperiod of more than three decades, bothstructural factors, especially a ``large countrye�ect'' and such contextual factors as economicpressures and state controls, diluted the impact


of international aid agencies in India acrossseveral policy sectors (Lipton and Toye, 1990).These considerations loom larger in China, dueto its greater physical size and shorter span ofinteraction with the world beyond. Accordingto the World Bank, while China received anastonishing $3 billion in World Bank loans in1996 alone, the amount of money per personwas only about $2.50, the lowest proportion oflending per capita in Asia.

8. CONCLUSION

In recent years, China has paid more atten-tion to environmental protection than mostother would-be developing nations. It has anelaborate institutional structure for environ-mental protection and is fashioning an ambi-tious body of environmental law, which givesNEPA access to tools of both state-led andmarket-based approaches to environmentalregulation. Yet this paper argued that struc-tural and contextual factors distance Chinafrom both of the standard models of environ-mental regulation. The powerful pull ofeconomic pressures undermines the state'stanks-and-planes approach to regulation, whilethe state itself inhibits the play of decentralizedkung fu approaches whose subtlety recallsmarket initiatives.

At mid-century, Mao Zedong predicted thata spark from his political revolution wouldignite a prairie ®re engul®ng the country andthe world beyond. As the century closes,Mao's spark may be extinguished by a blazearising from economic growth. Even today,when that con¯agration is largely con®ned toeastern China, it has proved di�cult to tampthe ¯ames with measures to protect the envi-ronment, despite the teachings of China'sancient sages.

State leaders have sanctioned the environ-mental policy system's multistoried develop-ment, linking local communities to the world'smost cosmopolitan capitals. Despite thisimpressive vertical development, the in¯uenceof transnational, and increasingly, nationalpolicy makers upon China's vast expanses islimited. External agents and ordinary Chinesecitizens still ®nd that the window upon o�cialChinese environmental policy is narrow.

China's leaders deduced from their neigh-bors' experience that openness may provoke anattempted ``big bang'' transition from socialismto a ``pseudo-market'' economy with accom-panying social and political malaise (Amsden etal., 1994; Chandra, 1995). The leadership'ssuccess in moderating environmental as well aspolitical change holds implications for human-kind's capacity to extend its lease on the planetinto the next century.

NOTES

1. The contrast between massive, centralized problem-

solving approaches and small-scale decentralized tactics

was e�ectively made by Reisner (1986).

2. The slogan ``women hold up half the sky'' was used

by Chinese communists from the 1920s to 1940s to

mobilize women's support, but made famous by Mao

Zedong following the People's Republic's establishment

(Lieberthal, 1995).

3. On the e�ects of contextual and institutional factors

on environmental management, see, for example, Wunsch

(1991); Chan et al. (1992a, b); Lo and Tang (1994).

4. Empirical evidence for this study comes from docu-

mentary materials and unstructured interviews with six

NEPA o�cials in Beijing during October and November

1994 and in Montreal during 1993-97. Sta� members of

the World Bank and UNDP also were interviewed in

Montreal, Washington and New York between 1993 and

late 1997. Interviews were conducted in connection with

a project on Chinese experience with the world's ®rst

environmental agreement, the 1987 Montreal Protocol

to Protect the Stratospheric Ozone Layer.

5. Interviews with World Bank and UNDP o�cials

and representatives of bilateral agencies in Montreal,

New York City and Washington, DC during 1993±95.

6. In a small study, Zhang (1994) reported a low level

of public environmental knowledge and concern even

among urban Chinese.

7. Until the ®nal version of the law was issued in 1989,

some factory managers ¯outed its rather ambiguous

authority (Sinkule and Ortolano, 1995).

8. Interview with a senior US State Department o�cer,

Washington, DC, November, 1995.


9. For example, the di�erence in sta� coverage of

the phaseout of ozone-depleting substances was

striking. According to a NEPA sta� member

interviewed in Montreal in February 1997, while

UNDP had three or four sta� members devoting

major attention to that e�ort, its counterpart in the

Bank's Beijing o�ce was pulled in many directions

by more than a dozen areas of responsibility under

his jurisdiction.

10. Interviews with two international agency ®eld sta�

in Beijing, October, 1994.

11. Interview in Montreal, April, 1996.

12. William Mitchell and Randy Simmons (1994)

Beyond Politics: Markets, Welfare and the Failure of

Bureaucracy (Boulder: Westview), cited in Dryzek

(1997).

13. Interviews with representatives of the World Bank,

UNDP and US Environmental Protection Agency in

Montreal, Washington DC, and New York City, 1994±

96.

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one-fifth of the sky: china's environmental stewardship

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