Friday, October 20, 2006

China, the economy and pollution control: an unexpected benefit?

Today's PlanetArk news item that China has shut 43 Cement factories tends to underplay a number of important points that are raised in the article.

Although I would usually pick out the more pertinent paragraphs I will include the whole article as it touches on a number of issues in the "globalisation and environment" debate. It reveals that all is not lost in China and that perhaps China will reach its EKC turning point sooner rather than later (or indeed the EKC will shift downwards and to the left).

What is interesting is that in an attempt to slow an overheating economy the central government is targeting heavily polluting industries. Whilst the "free market" would not approve as the result may be the closure of efficient but dirty firms whilst leaving inefficient clean firms to continue, in the absence of strict and enforcable regulations this may be the best solution.

China City Shuts 43 Cement Factories for Pollution

DONGGUAN, China - A city in China's booming southern province of Guangdong has closed 43 cement factories for pollution, a vice-mayor said on Thursday, a move that was in line with a government campaign to cool the overheating economy.

Three other cement factories in Dongguan, a haven for Taiwan investors, were still operating but were environmentally friendly, Dongguan Vice-Mayor Zhou Zhina said, adding that none of the 43 was foreign invested and that all have been compensated.

"Pollution from cement factories is pretty severe and they are not very safe," Zhou said in an interview with Reuters and a small group of foreign media.

"For the sake of bringing Dongguan's environmental protection up a step, we closed the 43 cement factories" over the past two years, Zhou said.

The central government is also trying to temper the pace of its economic rise with a focus on balanced growth and greater respect for the environment.

The closures of the cement plants were in line with a central government move to cool the economy by curbing investment and bank lending which have spawned production overcapacity. Gross domestic product in the first nine months grew 10.7 percent from a year earlier.

Economists say the central government has had difficulty reining in provincial governments eager for breakneck growth, but Guangdong officials appear to be toeing the central government line after Shanghai party boss Chen Liangyu was sacked last month for corruption after defying the central government's macroeconomic measures.

Hong Kong's Beijing-funded Wen Wei Po newspaper said Dongguan authorities also closed down 206 brick factories and 90 quarries, and pledged to spend 21.193 billion yuan (US$2.65 billion) to curb pollution.

Sulphur dioxide emitted by cement factories in Dongguan accounted for about 10 percent of the city's total sulphur dioxide emission, the daily said.

China has set a goal of cutting pollution output by 10 percent, adjusted for economic growth, over the next five years.

But China's official environmental monitor State Environmental Protection Administration (SEPA) found that sulphur dioxide emissions had grown 5.8 percent in the first six months of this year, the Economic Daily reported, quoting data from 17 provinces.

China's key measure of water pollution -- "chemical oxygen demand" or COD -- had risen 4.2 percent compared with the same period last year, the newspaper said.

SEPA chief Zhou Shengxian blamed soaring energy consumption, unbridled construction investment and spotty enforcement of environmental due diligence for the emissions increases, the daily said.

On Wednesday, state media cited China's State Oceanic Administration as saying the Bohai Sea, the body of water between China and the Korean peninsula, was so polluted it would "die" within 10 years.
(Additional reporting by Ian Ransom and Benjamin Kang Lim)

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