Ben Black Chinas Economic Explosion and its Effects on the Environment 1

Abstract:
This paper will consider the unprecedented expansion that Chinas 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 Chinas 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 Chinas economic
growth.
In order to analyze the effects of Chinas economic growth, it is vital to begin
with an analysis of the enormity of Chinas development in the last few decades. In
1963, Chinas Gross Domestic Product (GDP) was just over $50 billion, and by 2012
it had risen to over $8.3 trillion. According to these figures, Chinas GDP has
increased 166% since 1963, while the United States 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
Ben Black Chinas Economic Explosion and its Effects on the Environment 2
struggle on less than $1.80 per day. Due to Chinas massive population of over 1.3
billion, per capita Gross Domestic Product is another important statistic. According
to the United Nations, Chinas GDP per capita was $114 in 1970, and had risen to
$5,439 by 2011. The U.S. Central Intelligence Agency puts Chinas 2012 GDP per
capita at over $9,000 (cia.gov). This data suggests that Chinas 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 Chinas 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 Chinas 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 Peoples 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 Chinas 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
Ben Black Chinas Economic Explosion and its Effects on the Environment 3
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 Citys 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 Chinas 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
Ben Black Chinas Economic Explosion and its Effects on the Environment 4
City). These drastic measures to construct a facade for the international community
are yet another example of the significant amounts of air pollution that Chinas
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 Chinas 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, Chinas 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, Chinas 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 worlds 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
Ben Black Chinas Economic Explosion and its Effects on the Environment 5
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 Chinas
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 Chinas 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 Chinas 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 Chinas 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
Ben Black Chinas Economic Explosion and its Effects on the Environment 6
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 Chinas 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 Chinas 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 Chinas unprecedented economic expansion. Scarcity of resources, both
from increased demand and the finitude of certain materials, may also play a role in
derailing Chinas 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, Chinas rise
to economic superiority seems certain, the uncertainty lies in what the cost of this
economic explosion will be.




Ben Black Chinas Economic Explosion and its Effects on the Environment 7

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