China’s time bombs

In a recent post Dr. Demarche of The Daily Demarche wrote:

We haven’t done a group blog project in a while and now seemed like as good a time as any to start up another one. To that end we have cast a net out to some of our favorite bloggers and asked them to play along- the theme this time is China in the coming decade.

I was one of those invited to participate and, although I’m a little slow at getting off the block, I have a few thoughts to throw out. Digressing slightly I must admit that I’m very impressed by Dr. Demarche’s management skills. He’s managed to recruit at least a dozen top-notch bloggers to participate in his “China project”, apparently without breaking a sweat.

Before I get into my post in earnest I want to put my cards on the table: I’m a China skeptic and I’ve been one for nearly forty years. Sure, we couldn’t continue to ignore China indefinitely. But we haven’t expected nearly enough of China and we have become far too dependent on the Chinese—I believe to our detriment. When they look at China Western entrepeneurs and politicians see a potential market of nearly a billion brand new customers and a source of cheap labor. I see something that more closely resembles a very large United Arab Emirates: vast riches dominated by a fairly small oligarchy and it’s an oligarchy whose goals are so different from typical Western politicans’ that few Westerners have much real insight into how the members of that oligarchy might respond to changing events. And I think it’s likely to remain such an oligarchy for some time to come for a variety of cultural and social reasons.

So, yes, trade with China. Form closer economic, political, and military ties. But keep one foot on the threshold and be ready to pay the consequences of cutting China loose. Ask much more from China, be prepared to be rebuffed, and be prepared to make China suffer consequences. And be prepared to pay some consequences ourselves.

We just aren’t willing to give up anything in dealing with the Chinese, the Chinese know this, and that puts us at an enormous disadvantage in negotiations.

Many bloggers participating in “the China project” have noted military threats. Some have also noted demographic problems looming on the horizon for China. A few have mentioned China’s oil dependency. I’m going to concentrate on just three time bombs that I see in China’s future: the environment, banking, and economic vulnerability. In this post I’ll concentrate on the environment and leave banking and fundamental economic vulnerability for future posts.

China is suffering an environmental catastrophe of enormous proportions. Here’s how Joshua Kurlantzick described it last September in an article for The Washington Post:

The catastrophe is already unfolding in sickening detail. In a new book on China’s environment, “The River Runs Black,” a Council on Foreign Relations scholar, Elizabeth Economy, documents how two-thirds of Chinese cities have air quality below World Health Organization standards, by far the worst rate of any large country in the world. By some measures, at least six of the world’s 10 most polluted cities are in China, including Beijing and Urumqi. Several have the highest rates of airborne carbon monoxide in the world. The country’s environmental agency says that living in Chinese cities with the worst air pollution does more damage to an average Chinese person’s lungs than smoking two packs of cigarettes a day.

Meanwhile, as trees are ripped out of northern and central China — forest cover has fallen by more than half over the past two decades — the country’s deserts are expanding by several hundred thousand square kilometers per year, faster than anywhere else in the world. The government’s efforts to replant tens of millions of trees have thus far proven woefully ineffective at stopping the desert’s march. The Gobi Desert, which stretches across central China, has moved so close to Beijing, at a pace of about two miles a year, that its borders are less than 200 miles from the capital. Beijing is buffeted every summer by sandstorms that fill the sky and sometimes send particles drifting as far as South Korea.

According to Economy, the water in five of China’s largest rivers is so polluted it is dangerous to the touch, because it causes skin diseases; the Huai River, in the fertile province of Anhui, is filled with garbage, yellow foam and piles of dead fish. Several of the country’s main waterways, including the Yellow River, a vital artery, run dry before reaching the sea. More than 600 million Chinese, roughly half the country’s population, now drink water contaminated with animal and human waste, says Jasper Becker, a longtime China analyst based in Beijing.

Air pollution, water pollution, loss of precious arable land. All of these things are have immediate health consequences for the people of China and are going to have longterm health consequences for them. And China’s environmental problems aren’t being kept within its borders.

According to this article from Energy Bulletin 40% of the air pollution in South Korea and Japan is due to Chinese coal-fired power plants. The pollution may be spreading as far as the United States and Canada and could stress forest lands and do who knows what to the intervening oceans.

China is also the world’s largest producer of ozone-layer damaging chloro-fluorocarbons.

Where is all the pollution coming from? According to the United States Energy Information Administration these are the sources of China’s energy:

Source	Percent
Coal	63.4%
Oil	25.8%
Hydroelectricity	6.9%
Natural gas	3.1%
Nuclear	1%

Burn more coal to fuel China’s 8-10% per year economic growth, get more pollution.

Although China’s production of electricity from nuclear power plants is expected to rise from 1% to 4% by 2025, you just can’t build and bring nuclear power stations online fast enough to make a significant dent in China’s growing power needs.

Burn more oil? Have you noticed your gas prices going up lately? A big reason for that is China’s increasing use of (mostly imported) oil.

Well, how about renewable hydroelectricity? That’s no solution for China, either. The reason that the Three Gorges Dam project has been so controversial is that the land flooded by the dam is so poisonous. And there’s another reason that hydroelectricity is no solution: hydroelectric dams are a major cause of increased methane production which may lead to global warming.

Can China grow wealthy enough to solve its environmental problems (as many suggest)? It’s possible but China is just not on the right trajectory for that right now. China’s economy is six times more energy intensive than that of the United States. That is, it takes six times more energy to produce a dollar’s worth of economic growth in the Chinese economy than it does to produce a dollar’s worth of growth in the U. S. economy and the amount of energy that China takes to produce a dollar’s worth of growth is increasing.

So it’s becoming increasingly obvious: China’s environmental problems are a disaster of unimaginable and rising consequences that China is neither willing nor able to solve on its own. And nobody much wants to put pressure on them to change. That’s why I was opposed to the Kyoto Protocol, by the way. No such agreement that exempted China made any sense at all.

UPDATE: the next installment of my series on China’s time bombs is here.