China's Growth Comes at Environmental Cost

Businessweek reports that China's state media released data that show the country's environment is deteriorating.

While "spring sandstorms" helped to reduce air pollution by blowing the problem away from the area it was produced, the country's water supply continues its downward spiral. According to China's own "watered down" standards, less than 70% of major Chinese cities have water that ranks as "qualified". This is a drop of 5% from just a year ago. But the truly frightening truth of China's rivers and streams is obscured by these figures.

There have been a series of industrial accidents that polluted Chinese rivers which the government ineffectually attempted to cover up. One of the accidents was so bad that no amount of government intervention could disguise. The northeastern city of Harbin, with well over one million people, lost its only source of water when an industrial plant upriver completely poisoned the river with a massive dumping of benzene, a toxic chemical that is known to cause cancer.

China's political leaders are absolutely correct when they say that their efforts to clean up the environment are being effectively hamstrung by the need to continue economic growth. China's economy has grown faster than 10% per year for the last five years, but the country's primary competitive advantage in the international arena continues to be the availability of hundreds of millions of workers willing to work for almost nothing. China has made admirable progress in the urban areas that export to consumers around the world, but the countryside remains a decided work in progress.

The cleanest countries in the world are also the richest. This is no accident, as wealthy people are far more likely to pay to clean up their environment than the poor. China's problem is that the country has so many citizens trying to make a better life that they will irreparably damage their environment before they have enough money to repair their mistakes.

The environment has gained tremendous cachet in the West, perhaps most notably with the super trendy cleantech industry. China's growth is going to happen. At this point, only significant technological progress is going to enable that process to occur with minimal environmental disruption.