Balancing economy and environment

DEC 18, 1978, is a milestone in China's history. It was the start of the third plenum of the Communist Party of China (CPC) during which Deng Xiaoping announced historic "reform and opening up" policies. These historic policy changes have radically transformed China to an extent that its progenitors most likely never anticipated.

In 1978, China's per capita GDP was US$156.40 compared to a global figure of US$1,973.79. By 2017, the corresponding figures for China were US$8,826.99, and US$10,714.47 for the world. This means during these 40 years, China's per capita GDP increased by 56.4 times, compared to only 5.43 times globally. In 1978, some three-quarters of the Chinese lived in absolute poverty. By the end of 2018, it is expected to fall below one per cent, a rate of progress never witnessed in human history.

My first visit to China was in 1981. I was invited by the Chinese government to advise on its South-North Water Transfer mega project. It continues to be one of the most ambitious and complex infrastructure development projects of the country. I spent one month travelling all over China. As a foreigner, I had to get special permission to travel to the cities and towns around the banks of Chang Jiang. My host was Vice-Premier Fang Yi, a remarkably clever but humble person

I came to know Minister Fang very well. He suggested I should buy a house in the new Special Economic Zone of Shenzhen where a foreigner would be allowed to buy a property for the first time. I went to visit Shenzhen which then had a population of around 35,000 people. I was shown a series of villas under construction around a lake, each with about 0.8 ha of land. They cost around US$84,000. Minister Fang said by 2000, Shenzhen will have 5 million people. After visiting Shenzhen, I politely declined to take his advice. I told him in the entire human history, no city has gone from 35,000 to 5 million in less than 20 years.

Turning down Minister Fang's suggestion has been the biggest investment error of my life! The land cost of the bungalow alone is now well north of US$50 million!

Even the Chinese underestimated the growth of Shenzhen by 40 per cent. By 2000, it had over seven million people. This year when I visited Shenzhen, its mayor told me, by 2035, they are expecting an additional 10 million people. He asked my advice on how the city can provide enough clean water for its inhabitants and all economic activities and ensure that it has good wastewater management practices.

One major lesson I learnt from this Shenzhen experience is that China is a very special country and it would be a serious mistake to use historical knowledge from any part of the world to predict its future development.

One of the biggest regrets of my life has been that I was unable to apologise to Vice-Premier Fang before his death, and tell him he was right and I was wrong!

Since 1981, I have visited China at least once a year, and in some years as many as four times. I have witnessed its remarkable metamorphosis for some four decades.

A common criticism of China bashers has been that its economic development has been at the cost of the environment and quality of life. Decades of double-digit economic growth has come at the cost of air, water and soil pollution.

I also advised the first administrator of the Environmental Protection Agency, Qu Geping. In fact, Mr Qu and I wrote the first book on Environmental Impact Assessment for Developing Countries. It was published in both Chinese and English. I have witnessed the impacts of development on China's environment over the last four decades.

During my first visit to China, in July-August 1981, air pollution was not an issue. During my stay in Beijing and in all cities, towns and villages on the banks of Chang Jiang, air pollution was never an issue. However, over the past four decades, China's economic growth has been 10 times faster than the USA's. With no commensurate serious actions to protect the environment, air, water and soil pollution has become a serious socio-political issue.

By 2010, pollution of air, water and soil had become serious national problems. In 2012, WHO estimated that China had become the world's deadliest country for air pollution, resulting in more than one million premature deaths.

In terms of water pollution, in 2014, 15.7 per cent of China's groundwater was considered "very poor", and 44 per cent "relatively poor". Only 3 per cent of groundwater in North China Plain, covering some 440,000 sq km, could be considered "clean".

Survey data released in 2014 indicated that 16.1 per cent of China's soil and 19.4 per cent of all farmland were contaminated by chemical pollutants and heavy metals. Land contaminated amounted to 250,000 sq km - bigger than the United Kingdom.

Environmental deterioration became an increasingly serious public and political concern during the post-2000 period. In 1999, Vice-Premier Wen Jiabao said water shortages "threaten the very survival of the Chinese nation". Strategic focus of the Chinese government changed during this period. The leadership started increasingly to focus more on devising policies which would result in better quality of economic growth that would concurrently increase people's incomes and also enhance their quality of life.

Environmental concerns and policies during the Xi-era have become even more ambitious. While in many major countries like the United States environmental laws and regulations are being diluted, the Chinese leadership has taken increasingly tougher stands against all types of pollution. The relative importance of the environment can be gleaned from President Xi Jinping's address to the 19th Congress of CPC, in 2017, when he referred to the environment 89 times, compared to 70 times for the economy.

This was followed up by Premier Li Keqiang during the March 5, 2018 announcement of the Government Work Plan. Stricter pollution control and enforcement measures were outlined, along with the closing of polluting and inefficient coal and steel plants, banning of import of solid wastes for processing in China, enlarging the country's electric car fleet and a host of other appropriate measures.

All these policy instruments will be strictly monitored and managed by a new Ministry of Ecological Environment which has now become the most powerful environmental ministry in the world. China is now well into becoming a world leader in environmental pollution control.

China has embarked upon a two-pronged approach to clean up its environment. The first part will strictly regulate discharges into the environment and the second part will be to clean up the past pollutions.

Initial results to control pollution over the past five years show good reasons for optimism. For example, in 2013, when the government announced that the PM 2.5 levels in Beijing would be reduced to 60 micrograms per cubic metre by 2018, most Chinese and foreigners thought this target to be rather ambitious and probably unachievable. However, by January 2018, the average PM 2.5 level had declined to 34 micrograms per cubic metre, below the national standard of 35 micrograms.

The Beijing Municipal Environmental Protection Bureau further noted that 25 of the 31 days in January had "good" or "excellent" air quality. Compared to January 2017, the levels of sulphur dioxide, nitrogen dioxide and PM 10 fell by 55.6 per cent, 35.4 per cent and 51.1 per cent respectively. As a result, for the first time Beijing entered the top 10 ranking of Chinese cities for good air quality in December 2018. Dry and windy conditions no doubt helped, but the fact remains that China is successfully and progressively reducing its air pollution levels.

President Xi informed all ministers and governors in July 2017 that environmental pollution control would be one of the country's top three priorities, along with poverty reduction and managing financial risks. With such sustained support from the highest political level of the government, one can predict with high confidence that just like China's economic development over the past four decades has been unprecedented in human history, it will also make spectacular progress in controlling environmental pollution, certainly much faster than any developed country has managed in the past.

My prediction is air and water quality in China will be significantly better by 2025. However, soil quality will take somewhat longer to improve. Significant improvements are unlikely before 2035 because of the complexities associated with soil remediation.