May 1, 2007｜China
Senior Staff, Business Planning Department, Japan-China Economic Association
As recently as a few years ago, I was studying abroad in Beijing. Whenever a blue sky opened up, I was able to predict the top news item on television that night. I told myself “Some foreign bigwig must be in town today.” Operations at the surrounding factories had been stopped and the blue sky had been stage-managed—that was the quite plausible word going round—and with looking up at a dingy, smoggy sky every day, it was natural to believe that such was the case. Watching the TV, the forecast for air quality followed the weather forecast, and it showed whether the air in each city would be clean or not the next day. It said “Shanghai . . . not good” (with the same overtone as “no go!”) and I kept wondering what I should do.
Incidentally the Chinese government has taken up environmental protection and energy conservation as key issues in the “Eleventh Five Year Plan”. In addition to the variety of measures that have been hammered out—including the closure, in every industrial sector, of small and medium-sized factories which due to their outdated equipment are sources of pollution—it mentions the policy of reducing energy consumption per unit of GDP by 20% to 2010, and related guidance such as the “Eleventh Five-Year Development Guidelines for Energy Resources”. While I would like to round off neatly by saying these will certainly be successful, the reality is different. In 2006 the total volume of discharges of key pollutants increased on the previous year, and unit energy consumption ended up increasing by 0.8%.
I wonder about the handling of the environment and energy conservation which brackets them together, and there appears to be no great difference between the two in what underlies the reason for this. One factor is policy. Although the pushing ahead of the weeding-out of failing factories, and the successive implementation of a tightening of environmental regulations are important, the methodological, technical and financial support for the welfare of the employees of the weeded-out enterprises, and for the passing of tough standards, are nowhere on the horizon. With an uncertain future, it is difficult to proceed with investment in facilities which will continue to function in the long term for the managers of provincial small and medium-sized enterprises (large enterprises aside) and for local residents, and to press for the closure of factories.
Another factor is a social climate that has been speeding along a path of economic growth where “investment = profit”. With a continuous stream of young new millionaires being fêted and the managers of enterprises solely pursuing profits, everyone’s field of vision is restricted only to the money which they can see. In the Chinese securities market, which is exhibiting the features of a bubble, there is the factor of a great many citizens who share a sense that they throw in every last penny they have. That may be the greatest obstacle to the problems of the environment and energy conservation.
It goes without saying that you have to spend money to gain money. Now as to the question of whether you will profit after putting money into energy conservation, it is logical that you will end up in profit, owing to the reductions in costs in the long term. Regarding environmental protection also, the spending of money is viewed as a matter-of-course, given the huge amount of compensation and the tarnishing of a company’s image resulting from a pollution event. Before things get to that point, however, enterprises running on a day-to-day profit-and-loss basis will not be small in number, and in addition to an increase in short-time outlays from the improvement of plant and equipment, there will also be the sparing of the time and labor expended on improving the operation of the existing plant and equipment. Naturally, we can’t sweepingly criticize China for the striking examples of tragic incidents of pollution and the wasting of and soaring price of energy that have troubled the entire populace—the result of enterprises and individuals seeking short-term profit—because they have abounded in Japan.
The Beijing sky, however, has been blue a great deal recently. The reasons for this are that the number of factories within the city has decreased, and that an environmental policy prioritizing installation of flue-gas desulfurization equipment, etc, is making headway. In addition, amid apparently rising public awareness, I visited a thermal power station in the city the other day, and I heard that if just a wisp of something smoke-like (actually steam after waste treatment) is seen coming out of a chimney, then complaints will come from neighboring residents.
When next I live in Beijing, I hope that I will be able to view the blue sky with a different feeling than in the past. In this connection, as the indices, substances and degree of air pollution are now regularly announced every day for each city, I would like anyone interested to make a point of taking a look at them for themselves.