From Sandton to Shanghai

(Because this cement plant is on a tourist route near the Yantze River, plans are afoot to move it a couple of valleys along. Out of sight… Photo: Julian Hewitt)

Much has been said about China’s political and economical challenges. The reality is that China’s biggest challenge will not come from either of these tightly controlled and well managed aspects of society. China’s biggest problem will be environmental.

Mao once famously said that a revolution is not a dinner party, and the Industrial Revolution that swept across the Western world in the 18^th and 19^th centuries was by no means a pretty affair for the environment. The Industrial Revolution gave rise to great fossil fuel-guzzling, coal-burning factories that massively increased air pollution and chemical discharges.

China’s industrial revolution is hardly a walk in the park either. The difference is that Britain industrialized a population of less than 20 million and the USA went through the same process with under 100 million. China is walking down the same path, but with 1.3 billion people and it is doing so under the microscopic scrutiny of the West.

There was no internet, Greenpeace, Al Gore and Kyoto Protocol to maintain accountability 2 centuries ago. Nor were there delicate trade issues to consider. When a Dutch research team recently announced that China had overtaken the USA on the pollution stakes, it was splashed across the American newspapers, but received scant attention here. China rightly claims that it has 4 times the population of the USA and most of its industrial output ends up in the American homes anyway.

However, there are different issues at stake. China has more localized problems to be concerned about. There has been a rash of publicity regarding defective and hazardous Chinese products hitting international shelves. A few examples include contaminated toothpaste, deadly dog food, and according to the New York Times, seafood that was stopped 391 times at the USA border last year. Essentially, what were isolated issues has now become a serious bout of negative publicity for Chinese foodstuffs

These problems have found their way back to South Africa, right to the doorstep of my hometown. High levels of cadmium have been discovered in South African pineapples after local farmers unknowing used contaminated Chinese fertilizer. Shipments of canned South African pineapples have subsequently been rejected by the EU, after they were found to contain high levels of lead, arsenic and the carginogenic cadmium.

Bear in mind that for every case of contamination reported overseas, there are hundreds more happening on a daily basis in China. Addressing defective products is not that complex. What is required are many more balances and checks – tighter legislation, greater consequences for overstepping the boundaries and increased manpower to monitor product safety standards.

In a sign of growing urgency, the former head of China’s Food and Safety industry watchdog - Zheng Xiaoyu – was recently executed after being convicted of taking bribes to register substandard medicines. These inferior medicines resulted in the deaths of at least 10 people. Much attention has been given to this landmark case. To put it in a more Chinese way, it was a question of killing the chicken to scare the monkeys away.

The real challenge is to address the causes and not the symptoms though. While superficial issues rage around the global media, China has a much bigger fire looming in the background. The problem is not a complication one. China is still largely driven by manufacturing output. The manufacturing sector has large energy requirements as inputs and large amounts of effluents are discharged into the environment as outputs.

If this process is not competitive, then business moves to Vietnam, Myanmar or India. Using coal for energy is less expensive than sustainable energies and discharging untreated chemicals into the local river is cheaper than treating them.

However, when a massive lake has been so polluted from industrial discharges, that huge swathes are covered in a poisonous algae and the adjacent city of nearly 5 million people can’t even boil the water to make it potable, then your environmental challenge becomes a question of social harmony.

When this same incident repeats itself in nearby lakes and affects other large cities, then these isolated incidents soon become trends. This then leads on to a question of priorities. What is more important – a city with high economic growth or one with lower growth but where you can at least drink the water when you have boiled it.

The big issue at stake is that environmental challenges are less predictable than next year’s economic growth rate, next month’s trade surplus with the USA, the appreciation of the Chinese currency or even the next country president. Less predictable means less manageable and therefore more risky. The next outbreak of SARS or the next occurrence of poisonous algae has a much more direct impact on the man on the street than next month’s global trade figures.