26.02.2016 Author: Dmitry Bokarev

Chinese Environmental Issues: Is There a Way Out?

4534534534In recent years, the difficult ecologic situation in China has become an international issue. Decades of industrial and agricultural development, with no attention paid to environmental issues, have driven some regions to the brink of an ecological catastrophe. For a long time the Chinese Government has concealed the true scale of the threat, but recently it has become impossible to conceal, and Chinese leadership had to implement a policy to save the environment.

Other states also suffer from the contamination produced by China. These are primarily countries bordering its northern-eastern regions, which are the most industrialized and, consequently, the most polluted. These are North and South Korea, Mongolia, Russia and Japan. The damage that China causes to these countries invariably influences their relations. Obviously, recovering from crisis will require joint efforts of the mentioned countries. Virtually, however, the key part in resolving the Chinese issue belongs to China, and there is little that neighboring countries can do without its wish. China signed agreements on joint efforts to protect the environment in 1990s-2000s. The agreements stipulated reduction of water contamination by industrial waste, air pollution by coal combustion products, petroleum products, prevention of soil degradation as a result of uncontrolled farming and cattle grazing, cease of deforestation and joint ecological monitoring. China, however, was not eager to make ecological issues one of its priorities, and, as it is clear now, the agreement did not bring about any tangible results.

The most noteworthy is the cooperation in the field of environmental protection between China and Japan. As is known, for a few decades Japan through its Overseas Economic Cooperation Fund extended more loans on favorable terms to China than any other country within the framework of official development assistance. A substantial part of this money was directed to the implementation of Chinese environmental protection projects. Cooperation was ensured on multiple levels – interstate, inter-regional, and even at the level of management of cities and individual enterprises. The two countries carried out a joint research of river and sea water, Japanese experts helped constricting water treatment plants for factories; Japan also supplied special equipment for factories. The Japanese paid most attention to the above mentioned northern-eastern regions of China, especially the province of Liaoning, where the majority of facilities, which contaminate the environment, are situated. From the mid-1990s to the 2000s it received from Japan a grant amounting to about 100 million yens, and loans of more than 100 billion yens for the implementation of environmental projects.

Another example of Japan’s significant contribution to Chinese ecology is the Liao and Songhua rivers contamination reduction project for which China received about 13 billion yens from Economic Cooperation Fund of Japan.

In 2007, the parties singed Joint Statement by Japan and the People’s Republic of China on the Further Enhancement of Cooperation for Environmental Protection. Apart from other tasks, this statement stipulated a separate program of the Yellow Sea monitoring.

Being China’s neighbor in the region with shared naval borders, Japan pays special attention to the state of seas, which surround it. Much finance was directed at the purification of the rivers, which flow into the Sea of Japan. From 1979 to 2009 China received a total of more than 1 trillion yens from Japan to implement its environmental programs. However the environmental issue in the PRC had been deteriorating year by year as the same old reckless policy of industrialization and economic growth had still been carried out at the state level.

After 2008, Japan ceased giving China low-interest loans including for the environmental projects. It was caused by both global financial crisis and the growth of China’s GDP that started to outpace the Japan’s GDP by 2010, thus the Japanese side saw no reason to further support of China.

Nevertheless it did not lead to the termination of Chinese environmental programs. It was in the year 2010 when Chinese authorities started to talk about the need to change the environmental policies of the country and to make the protection of its environment one of the PRC’s priorities.

The APEC summit in 2014 saw the announcement of China’s plans to decrease the damage done to the atmosphere and to move the energy consumption onto renewable resources.

In particular, a key part of the Chinese environmental program consists of pushing for the production of electric cars, which do not pollute the environment. In March 2015, the Ministry for Transportation of China announced a plan, which stipulated, that the number of electric cars should equal 300,000, buses powered by electricity: 200,000, and taxis: 100,000. There are built charging stations in the cities already. All these steps are followed by taxation measures, which stimulate citizens to purchase environmentally-friendly cars. Chinese government bodies and enterprises received an instruction to use green cars for their needs as much as possible. At the same time the subsidies on carbon fuel they were entitled to were reduced. According to the Ministry of Industry and Information Technology of China, the production of cars, which run on alternative fuels, had increased by three times in the first half of 2015. The China Association of Automobile Manufacturers predicted that there would be sold 250,000 electric cars in China in 2015, which is more than in any other country in the world.

In this regard certain attention should be paid to a recent decision of the Japanese Panasonic Corporation, one of the major manufacturers of electronics and domestic equipment, to build the first factory in China for producing batteries for electric and hybrid vehicles. This company is already one of the key suppliers of batteries for hybrid automobiles. The production of electric cars and spare parts has been growing in volume and becomes an important market sector, 45% of which is already taken by Panasonic. The company however is set on increasing its share. It was decided to construct it in the Dalian city in the most polluted Liaoning province in northeastern China, which has been already mentioned above. The plant is planned to start operating in 2017. According to preliminary estimates, it will be producing batteries for 200,000 vehicles annually. The project cost is going to amount to 50 billion yens, or 412 million dollars.

The time will tell to what extent the benefit of using electric engines is going to compensate for the environmental pollution done by plants, which produce them.

Nevertheless, there is always an alternative way to solve any problem: a completely new market sector is emerging now, which is selling of fresh air to the Chinese, the air from environmentally pristine regions of Canada, Latin America, and Great Britain that skillful entrepreneurs ship in bottles. Bottled air is in relatively high demand in the regions which suffer most severely from smog.

Dmitry Bokarev, political observer, exclusively for the online magazine “New Eastern Outlook“.