Arquivo da tag: China

China’s Communist-Capitalist Ecological Apocalypse (Truthout)

Sunday, 21 June 2015 00:00 By Richard Smith, Truthout | News Analysis 

A pedestrian wearing a protective mask in Beijing, Jan. 17, 2012. Decades of coal-powered industrialization combined with the government-promoted car craze have brought China the worst air pollution in the world. (Photo: Gilles Sabrie/The New York Times)

A pedestrian wearing a protective mask in Beijing, January 17, 2012. Decades of coal-powered industrialization combined with the government-promoted car craze have brought China the worst air pollution in the world. (Photo: Gilles Sabrie/The New York Times)

This article seeks to explain why China’s environmental crisis is so horrific, so much worse than “normal” capitalism most everywhere else, and why the government is incapable of suppressing pollution even from its own industries. I begin with an overview of the current state of China’s environment: its polluted air, waters, farmland and the proximate causes, including overproduction, overdevelopment, profligate resource consumption, uncontrolled dumping and venting of pollutants. I then discuss the political-economic drivers and enablers of this destruction, the dynamics and contradictions of China’s hybrid economy, noting how market reforms have compounded the irrationalities of the old bureaucratic collectivist system with the irrationalities of capitalism resulting in a diabolically ruinous “miracle” economy. I conclude with a précis of the emergency steps the country will have to take to take to brake the drive to socio-ecological collapse, with dire implications for us all.

The first time Li Gengxuan saw the dump trucks from the nearby factory pull into his village, he could not believe his eyes. Stopping between the cornfields and the primary school playground, the workers dumped buckets of bubbling white liquid onto the ground. Then they turned around and drove right back through the gates of their factory compound without a word.

In March 2008, Li and other farmers in Gaolong, a village in the central plains of Henan Province near the Yellow River, told a Washington Post reporter that workers from the nearby Luoyang Zhonggui High-Technology Company had been dumping this industrial waste in fields around their village every day for nine months. The liquid, silicon tetrachloride, was the byproduct of polysilicon production and it is a highly toxic substance. When exposed to humid air, silicon tetrachloride turns into acids and poisonous hydrogen chloride gas, which can make people dizzy and cause breathing difficulties.

Ren Bingyan, a professor of material sciences at Hebei Industrial University, contacted by the Post, told the paper that “the land where you dump or bury it will be infertile. No grass or trees will grow in its place … It is … poisonous, it is polluting. Human beings can never touch it.”

When the dumping began, crops wilted from the white dust, which sometimes rose in clouds several feet off the ground and spread over the fields as the liquid dried. Village farmers began to faint and became ill. And at night, villagers said “the factory’s chimneys released a loud whoosh of acrid air that stung their eyes and made it hard to breath.”

“It’s poison air. Sometimes it gets so bad you can’t sit outside. You have to close all the doors and windows,” said Qiao Shi Peng, 28, a truck driver who worried about the health of his 1-year-old.

China’s rise has come at a horrific social and environmental cost.

Reckless dumping of industrial waste is everywhere in China. But what caught the attention of The Washington Post was that the Luoyang Zhonggui High-Technology Company was a “green energy” company producing polysilicon destined for solar energy panels sold around the world. Indeed, it was a major supplier to Suntech Power Holdings, then the world’s leading producer of solar panels, and Suntech’s founder, Shi Zhengrong, topped the Hunrun list of the richest people in China in 2008. (1)

Silicon tetrachloride is an unavoidable byproduct of polysilicon production. But reckless pollution of farm villages is not unavoidable. Today, China is the only country in the world where such criminal behavior and cynical disregard for the health and lives of farmers and workers has become standard practice on a national scale by governments at every level, even as the government’s own environmental agencies decry such behavior and struggle, mostly in vain, to stop it. As one Chinese researcher told the Post, “If this happened in the United States, you’d be arrested.” But in China environmental regulations are regularly flouted by state-owned and private industries with the connivance of government officials at all levels while protesting farmers, workers and environmental activists are arrested, jailed, beaten or worse, and their lawyers with them.

Polysilicon production produces about four tons of silicon tetrachloride liquid waste for every ton of polysilicon produced. In Germany, where Siemens produces solar panels, pollution recovery technology is installed to process the silicon tetrachloride waste and render it harmless. But such environmental protection technology is expensive. In 2008, the cost to produce polysilicon safely was about $84,500 a ton in Germany and would not have cost much less in China. Chinese companies have been producing it for $21,000 to $56,000 a ton, saving millions of dollars a month, by just dumping the toxic waste in rural areas on helpless village communities.

Gaolong village is a mirror to China. It illustrates how the marriage of capitalism and Stalinist bureaucratic collectivism has created a diabolically destructive hybrid economic system, a rogue economy that is ravaging China’s environment, ruining the health of Chinese people, rendering more and more of the country unlivable, driving the country to ecological collapse and threatening to bring the whole planet down with it. (2)

I. China Self-Destructs

For more than three decades, China’s “miracle” economy has been the envy of the world or at least the envy of capitalist economists for whom wealth creation is the highest purpose of human life. Since 1979, China’s GDP has grown by an average of just under 10 percent per year. Never, the World Bank tells us, has a nation industrialized and modernized so quickly or lifted so many millions out of poverty in such a short time. From a backward, stagnant, largely agrarian socialism-in-poverty, Deng Xiaoping brought in foreign investors, introduced market incentives, set up export bases, turned China into the light-industrial workshop of the world and renovated China’s huge state-owned enterprises (SOEs).

“Fast fashion” is speeding the disposal of the planet.

Three and a half decades of surging economic growth lifted China from the world’s 10th largest economy in 1979 to No. 1 by 2014. What’s more, after decades of export-based growth, China’s 12th Five-Year Plan 2011-2015 sought to refocus the economy on internal market demand to realize Xi Jinping’s “Chinese Dream” of national rejuvenation and turning China into a mass consumer society on the model of the United States. As China sailed right through the global near-collapse of 2008 to 2009, hardly missing a beat, while Western capitalist economies have struggled to keep from falling back into recession, even the Thatcherite Economist magazine had to concede that China’s state capitalism may be in certain respects superior to capitalist democracies and is perhaps even the wave of the future.

But China’s rise has come at a horrific social and environmental cost. It’s difficult to grasp the demonic violence and wanton recklessness of China’s profit-driven assault on nature and on the Chinese themselves. Ten years ago, in an interview with Der Spiegel magazine in March 2005, Pan Yue, China’s eloquent, young vice-minister of China’s State Environmental Protection Agency (SEPA) told the magazine, “the Chinese miracle will end soon because the environment can no longer keep pace.” Pan Yue added:

We are using too many raw materials to sustain [our] growth … Our raw materials are scarce, we don’t have enough land, and our population is constantly growing. Currently there [are] 1.3 billion people living in China, that’s twice as many as 50 years ago. In 2020 there will be 1.5 billion … but desert areas are expanding at the same time; habitable and usable land has been halved over the past 50 years … Acid rain is falling on one third of Chinese territory, half of the water in our seven largest rivers is completely useless, while one fourth of our citizens do not have access to clean drinking water. One third of the urban population is breathing polluted air, and less than 20 percent of the trash in cities is treated and processed in an environmentally sustainable manner … Because air and water are polluted, we are losing between 8 and 15 percent of our gross domestic product. And that doesn’t include the costs for health … In Beijing alone, 70 to 80 percent of all deadly cancer cases are related to the environment.

And criticizing Western economists who reassure us that more growth is the key to repairing the environmental damage done from growth, Pan said:

And there is yet another mistake … It’s the assumption that economic growth will give us the financial resources to cope with the crises surrounding the environment, raw materials, and population growth. [But] there won’t be enough money, and we are simply running out of time. Developed countries with a per capita gross national product of $8,000 to $10,000 can afford that, but we cannot. Before we reach $4,000 per person, different crises in all shapes and forms will hit us. Economically we won’t be strong enough to overcome them. (3)

Pan Yue’s searing honesty got him sidelined but if anything, he understated the speed, ferocity and scale of China’s ecological destruction, a destruction that extends far beyond China itself.

A. Consuming the Planet to Support Unsustainable Growth

As China’s growth took off in the 1980s and 1990s, the industrial boom rapidly depleted the country’s resources, especially lumber, oil and minerals, forcing Beijing to turn outward to feed its voracious engines of growth. The manic and thirsty industrialization boom in China’s northern industrial cities drained China’s northern fresh aquifers leaving some 600 cities, including Beijing, facing dire water shortages while severely polluting most remaining reserves. Profit-hungry loggers cut down most of what was left of China’s forests, recklessly denuding mountains and precipitating such extensive flooding and loss of life in 2009 that the government banned domestic logging. Chinese loggers then turned to plundering Siberia, Malaysia, Indonesia, and even New Guinea and parts of Africa. China had little oil to begin with so industrialization and automobilization quickly turned China from a modest oil exporter into a net importer in 1993 and the world’s leading oil importer by 2013. China’s iron ore, copper and other critical industrial mineral reserves have also been rapidly drawn down, forcing the country to import growing quantities of minerals.

The government has squandered astounding quantities of resources building entire industries China does not need.

In result, today, with 20 percent of the world’s population, China is now by far the world’s largest consumer of marketed primary industrial raw materials (cement, metal ores, industrial minerals, fossil fuels and biomass). China consumes more than 32 percent of the world’s total of these resources, nearly four times as much as the United States, the second largest consumer. China consumes just over half the world’s coal and a third of the world’s oil. China is the leading producer and consumer of steel with 46 percent of world output and now relies on imports for 77 percent of its iron ore. (4) China has become the world’s largest consumer of lumber and forest products, leveling forests from Siberia to Southeast Asia, New Guinea, Congo and Madagascar. Greenpeace concluded that on current trends “future generations will be living on a planet without ancient forests.” (5)

Of course, China has the world’s largest population and is industrializing from a comparatively low level just three decades ago so it’s hardly surprising that it would consume lots of resources to build infrastructure and modernize. But the fact is, most of these resources have been squandered on a stupendous scale, and for all the waste and pollution, most Chinese have gotten surprisingly little out of it all.

The Disposables Revolution and “The Great Acceleration” of Global Consumption

For a start, look at the export bases that have powered China’s rise. When China launched its “reform and opening” (gaige kaifang) in the early 1980s and invited foreign investors to set up joint-ventures and special economic zones, China’s combination of ultra cheap labor plus few-to-no environmental restrictions attracted many of the world’s dirtiest and least sustainable industries. Steel, coke, aluminum, cement, chemicals and petrochemicals, metal plating, leather tanning, plastics, paints and finishes, synthetic fibers and textile production, fabric dyeing, paper production, along with auto battery and electronics recycling – most of the toxic and smokestack industries facing increasingly tough environmental restrictions at home in the United States and Europe, relocated to China after 1980. (6) Seventy percent of the world’s e-waste is dumped in China.

On top of this, China’s masses of low-paid migrant workers were a magnet for the world’s most labor-intensive manufacturing and assembly industries. By the 1990s, China had more than 104 million manufacturing workers, about twice as many as the United States, Canada, Japan, Germany, France, Italy and the United Kingdom, combined. And they worked eight- to 16-hour days, often seven days a week, for an average of $0.57 per hour in 2002, by one estimate, less than the handloom operators earned in the early Industrial Revolution in England. This “China Price” set the global floor for high-volume, light-industrial manufacturing from the 1980s. (7)

The price collapse spurred the biggest boom in global consumption in history and this in turn accelerated global resource plunder on an unprecedented scale. The sudden availability of such a huge pool of ultra-cheap workers also spurred a minor industrial revolution enabling producers to annihilate most of the remaining categories of durable goods and replace them with cheaper, disposable substitutes. With the disposables revolution, local tailors and alteration shops, shoe repair shops, appliance repair shops, TV repairmen and the like all but vanished in the West as it became cheaper to toss these items and replace them than repair them.

The Chinese Communist Party promoted the car craze to bolster status-seeking middle-class political support.

Take clothes: “Fast fashion,” (also known as “trashion fashion”) from H&M, Target, Zara and others, now rules the women’s apparel market with clothes so cheap it’s often not worth the cost of dry cleaning them. As Elizabeth Kline relates in her recent book Overdressed: The Shockingly High Cost of Cheap Fashion, “seasonal shopping patterns have given way to continuous consumption.” Zara delivers new lines twice a week to its stores. H&M and Forever 21 stock new styles every day. In Kline’s words: “Buying so much clothing and treating it as if it is disposable, is putting a huge added weight on the environment and is simply unsustainable.” To say the least.

The US cotton crop requires the application of 22 billion pounds of toxic pesticides every year. Most fiber is dyed or bleached, and treated in toxic chemical baths to make it brighter, softer, more fade resistant, waterproof or less prone to wrinkles. Upholstery fabrics and children’s pajamas are treated with ghastly chemicals to make them stain resistant or fireproof. These toxic baths consume immense quantities of chemicals and water, and it goes without saying that in China, the chemicals are routinely just dumped in rivers and lakes, untreated, just like that silicon tetrachloride poured out on Li Gengxuan’s cornfield. Then after all the chemical treatments, the fabrics have to be dried under heat lamps. These processes consume enormous quantities of energy.

The textile industry is one of the largest sources of greenhouse gas emissions in the world, and it’s growing exponentially. In 1950, when there were about 2.5 billion people on earth, they consumed around 10 million tons of fabric for all uses. Today, we are 7 billion, but we consume more than 70 million tons of fabric annually, nearly three times as much per person as we consumed in the 1950s. Producing 70 million tons of fabric consumes astounding quantities of resources including more than 145 million tons of coal and between 1.5 and 2 trillion gallons of fresh water, every year. Synthetic fibers like polyester and such (now 60 percent of the market) are the worst: They consume between 10 and 25 times as much energy to produce as natural fibers. In short, “fast fashion” is speeding the disposal of the planet. (8)

And what’s true for China’s garment industry is true for most of the rest of China’s export industries. From cheap, disposable shoes and clothes, toys, tools, housewares, Christmas junk and flimsy plastic appliances to meticulously made and expensive but nevertheless designed-to-be-obsolesced iPhones and 60-inch flat-screen TVs, most of the world’s light-industrial goods are made in China and they are, for the most part, deliberately designed to be unrepairable and mostly unrecyclable. After their short life, they all end up piled on the world’s ever-growing garbage mountains, sent back to China in containers filled with e-trash to be “recycled” by children melting the plastic off motherboards over open fires, or left floating around the world’s oceans in giant plastic gyres over vast stretches of oceans, hundreds of feet deep. (9)

Scenes of Planetary Destruction From the 12th Five-Year Plan

When we turn to China’s domestic economy, the waste is breathtaking. As China’s economy opened to the West and China’s exports began returning billions of dollars in foreign exchange, Beijing launched wave after wave of gargantuan development projects: dams, airports, rail systems, roads, subways, sewerage systems, new industries, new housing, new cities, new ports and more. China’s supercharged government planners have been showcasing China’s engineering prowess and economic might by building the world’s biggest dams, the tallest skyscrapers, biggest airports, longest and highest bridges, longest rail and road networks and longest tunnels.

Since the 1980s, China has built enough new housing to re-house the entire population.

Since Deng Xiaoping launched his “Four Modernizations of agriculture, defense, science and technology” and reform and opening up, the country has been in perpetual Great Leap Forward mode: Five-Year plans have set annual industrial growth rates of 8 percent and promoted successive sets of “pillar” industries – autos, electronics, petrochemicals, clean energy and so on. In the current 12th Five-Year Plan (2011-2015), the State Council calls for development of “seven strategic emerging industries” including 1) energy efficient and environmental technologies like “clean coal,” 2) next generation IT and cloud computing and the “Internet of Things,” 3) biotechnology, 4) high-tech manufacturing of vehicles and aircraft, expanding high-speed rail service to 45,000 kilometers, expanding motor expressways to 83,000 kilometers, 5) new-generation nuclear power, more solar and wind energy systems, 6) new materials including development of rare earths, special glass and ceramics, high-performance fiber and composite materials, 7) new-energy vehicles: motor batteries, drive motors, electronic controls, plug-in hybrid and electric vehicles, low-emissions vehicles. (10)

No doubt, the Chinese have benefited from new housing, infrastructure, schools, hospitals and so on. But the government has also squandered astounding quantities of resources building entire industries China does not need, building useless vanity projects, superfluous housing, redundant infrastructure and more. From the start this investment boom has been characterized by uncontrolled overproduction and out-of-control pollution.

Scene 1: The “Car Craze” China and Planet Earth Did Not Need

The 12th Five-Year Plan calls for “enhancing China’s independent capacity to manufacture automobiles, domesticating production of all key parts,” for “large-scale commercialization” of energy efficient and hybrid vehicles, for “building … world-famous brands and core competencies” and so on. Hybrid or not, this is an industry the Chinese do not need. Up to 1979, China produced around 160,000 motor vehicles per year with trucks and buses accounting for 90 percent of the output. People got around on bicycles, buses and trains. In 1990, China had just 5.5 million cars, trucks and buses on the road. By 2013, China became the world’s largest auto assembler cranking out 18.7 million cars and light vehicles, more than twice the number produced in the United States in that year. By 2013, China had 240 million cars on its roads, almost as many as in the United States, and China could have an estimated 390-532 million cars on the road by 2050. The question is, why does China need anything like such a huge auto industry? The lead headline of Bloomberg News for April 9, 2014, citing the latest Intergovernmental Panel on Climate Change report, was “Cars become the biggest driver of greenhouse-gas increases.” What’s wrong with this picture?

China surpassed the US in 2007 to become the world’s leading carbon dioxide emitter.

The automobilization of China has brought three profound changes. First, it has dramatically lengthened the time it takes to get anywhere in China’s gridlocked cities (average speed on Beijing’s ring roads is 9 miles per hour) and created epic, world-historic traffic jams on highways feeding into Beijing and other cities. One jam-up near Beijing in 2010 stretched over 100 kilometers and lasted for two weeks. Secondly, it has added a dense new layer of smog on top of the already thick layers of smog from coal combustion smothering China’s cities. And thirdly, it has paved over much-needed farmland and wetlands and wasted enormous resources China, and the world, does not have to waste. This did not have to happen.

The Communist Party promoted joint-venture auto production as a “pillar” industry in the 1990s for two reasons: First, once the government embarked on its market-reform strategy, abandoning lifetime employment, it needed to push growth to generate private- and state-sector jobs, like capitalist governments everywhere. Speaking in November 2013, Prime Minister Li Keqiang stressed that:

Employment is the biggest thing for well-being. The government must not slacken on this for one moment … For us, stable growth is mainly for the sake of maintaining employment.

Auto manufacture and related industries now account for one out of every eight urban jobs in China excluding road building, another big employer.

Secondly, the Chinese Communist Party (CCP) promoted the car craze to bolster status-seeking middle-class political support. In the 1980s, the CCP supported a modest consumerism. But after the Tiananmen uprising in the spring of 1989, the government opted for expansive consumerism to placate the middle classes. Hence the car craze, followed by the airline craze, the shopping mall craze, the high-speed train craze, the foreign tourism craze, and so on. It is no small irony that just as the CCP was ramping up auto production and banning bicycles from public roads in the 1990s, European countries were moving in the opposite direction – barring cars from many central city streets, promoting bicycles and car sharing, and expanding public transit. China didn’t begin expanding its urban subways in earnest until the late 2000s, after two decades of automobilization had gridlocked its cities and dramatically increased air pollution.

Scene 2: The Roads Not Taken

As China was racing to surpass the US as the world’s largest car market, the Communist Party decided that China should also “catch up and overtake” the US interstate highway system as well. So by 2010 China built 53,000 miles of intercity expressways, exceeding the US interstate highway system’s 47,000 miles. But this program, built at huge cost and by tearing through cities and paving over thousands of square miles of valuable farms, wetlands and so on, is yet another ill-conceived boondoggle because except for a few highways near major cities like Beijing or Shenzhen, China’s expressways are often little used. In places, farmers dry their crops on empty super highways. McClatchy’s Beijing bureau chief Tom Lasseter writes under this picture:

Do you see any cars along this road? One often hears about the traffic jams in the big cities of China. But here’s the flip side of the coin: In rural towns and cities in China, local officials like to build big showcase projects, displaying grandiosity but little utility. I was in the city of Fengzhen in Inner Mongolia yesterday. By Chinese standards, it is a small place, maybe 200,000 people. So imagine my surprise as we leave the downtown to come across this eight-lane highway going past a mammoth new City Hall. Nary a car on it. A passerby could keel over with a stroke on that highway and not risk getting run over for many hours. The city is already in hot water for building a power plant that Beijing says is unneeded. Across China, there are plenty of largely empty hotels, brand new empty highways, modern airports that lose money for lack of traffic, etc. What happens is that unelected local officials, not particularly responsive to local needs, find that pharaonic projects give their municipalities a luster that can attract investment, which is their path to promotion within the one-party system. So for every eight-lane road you see like this, there is a happy bureaucrat pondering a bright career ahead. (11)

How much cement has been poured, how much iron rebar has been forged, and how much coal has been burned to produce the energy to pave over so much of China – for no useful purpose whatsoever?

Scene 3: Half-Empty Trains and Subways

And how much steel, aluminum, copper, cement and electricity have been consumed to build China’s huge national network of high-speed trains? The 12th Five-Year Plan budgeted hundreds of billions of dollars to build more than 16,000 miles of high-speed rails by 2020. By 2013, China had already built more high-speed trains than the rest of the world combined. But this too is more make-work and prestige project than modernizing necessity. High-speed trains are hugely expensive to build and operate and consume more than twice as much electricity to run as regular trains, so tickets can cost 10 times the price of regular train tickets in China. Since few Chinese people can afford such prices, the trains often run at half capacity or less. Chinese transportation experts say the government is throwing money away on bullet trains, money that could be better spent on regular railroads, especially cargo lines, and developing mass transit in and around cities. (12) New York University economist Nouriel Roubini told Reuters in 2011:

“I was recently in Shanghai and I took their high-speed train to Hangzhou,” he said, referring to the new Maglev line that has cut traveling time between the two cities to less than an hour from four hours previously.

“The brand new high-speed train is half-empty and the brand new station is three-quarters empty. Parallel to that train line, there is also a new highway that looked three-quarters empty. Next to the train station is also the new local airport of Shanghai and you can fly to Hangzhou,” he said.

“There is no rationale for a country at that level of economic development to have not just duplication but triplication of those infrastructure projects.” (13)

Duplication, triplication, overconstruction and waste is everywhere in China, even with subways. Twenty-two cities already have subway systems and money was budgeted in 2012 to build subways in another 16 by the end of 2018. Wang Mengshu, a subway engineer from the Chinese Academy of Engineering who helped design China’s first subway in Beijing in 1965, says these are completely unnecessary, too expensive, again more prestige projects than public service: “Second-, third-, fourth-tier cities … those cities don’t need to build subways. Even if they can afford to build them, they can’t afford to run them. But a lot of places think that if they have a subway, then they are a big city.” (14)

Scene 4: China as “Major Aerospace and Air-Travel Power”

The 12th Five-Year Plan grandiosely calls for a push to make China a “major aerospace and air-travel power.” Plans call for nearly a hundred new airports, thousands of new airliners, thousands of helicopters, business jets and small aircraft of all varieties. Boeing estimates Chinese carriers will need more than 5,260 new airliners – worth $670 billion – by 2031. (15) Great for Boeing. But not only did China not “need” this industry, it’s just suicidal for developing countries like China to repeat the same environmental mistakes as the West did.

The UN Intergovernmental Panel on Climate Change calculates that aviation is currently responsible for about 3.5 percent of anthropogenic climate change and says that if present trends continue this share will grow to between 5 percent and 15 percent by 2050 while the absolute contribution of aviation generated emissions will soar. Aviation is already the fastest growing source of global carbon dioxide emissions and if it continues to grow at its current rate it will overwhelm all the cuts engineers have managed to make elsewhere. (16) There are not currently nor are there on the horizon any practical alternatives to kerosene-based fuels for commercial jet aircraft. This is why after surveying the literature on potentials for greenhouse gas mitigation in other forms of transportation, environmental journalist George Monbiot concludes that while some forms of transport can be rendered a bit greener, there’s virtually nothing we can do with aviation with present or foreseeable technologies:

There is, in other words, no technofix. The growth in aviation and the need to address climate change cannot be reconciled. Given that [efficiency gains tend to be canceled out by growth] a 90 percent cut in emissions requires not only that growth stops, but that most of the planes which are flying today are grounded. I recognize that this will not be a popular message. But it is hard to see how a different conclusion could be extracted from the available evidence. (17)

In a world where climate scientists tell us we need to cut global carbon dioxide emissions by 90 percent by 2050, global aviation emissions are on course to double by 2030. It will be suicidal to let this happen. Absent some technical miracle, the only way to suppress aviation emissions is to suppress the numbers of people jetting around the planet, not add hundreds of millions of Chinese to this jet set. Coming to grips with this reality may not be popular in China or the United States, but the alternative is not going to be popular either.

Scene 5: Construction Frenzies, Ghost Cities and the Mother of All Real Estate Bubbles

Yet none of the above compares with the resources squandered on the construction boom of recent decades. China’s construction juggernaut has been gobbling up China’s best peri-urban farmland, expelling tens of millions of farmers and urban residents and consuming staggering quantities of resources to build unneeded housing, shopping malls, industrial parks, office buildings, power plants and infrastructure in a country already bursting with overpopulated, polluted megacities. (18) Millions of urban residents were cleared out of Beijing and Shanghai, which were completely rebuilt with thousands of skyscrapers, apartment blocks, highways and shopping malls. (19) Cities and provinces compete to build cloud-piercing skyscrapers even if they have no prospective tenants for them.

In one village, 80 percent of the population is said to have died from pollution-induced cancers since 1991.

By 2020, 12 of the planet’s 20 tallest towers are expected to be in provincial cities like Shenyang, Wuhan and Suzhou. The office vacancy rate in Shenyang is nearly 30 percent, yet three more towers, all bigger than the Chrysler Building in New York City, are under construction, and another 12 are on the drawing boards. Beijing’s premier architectural atrocity, the Rem Koolhaas-designed CCTV tower – dubbed “Big Underpants” by the locals – sits nearly empty since it was built in 2008. Cities compete to build ersatz Wall Street “financial centers” as in Beijing (abandoned) and Tianjin (abandoned and unfinished). Stunningly lavish offices for cadres are built everywhere. China’s coast has multiple redundant ports, some nearly empty, but more are planned.

Since the 1980s, China has built enough new housing to re-house the entire population but the construction boom has become a self-sustaining, perpetual engine of construction for the sake of construction – supply with no demand. And there are not just miles of empty apartment blocks but entire “ghost cities” complete with office towers, hospitals, schools, futuristic airports, museums, universities, libraries, theaters, sports fields, and miles and miles of apartment towers and subdivisions of McMansions – but almost no people. (20) Twenty-one percent of China’s urban residents, the wealthy and middle classes, own two urban apartments, some own three or four – all bought for speculation, not to live in, not vacation homes. More than 22.4 percent of urban apartments and houses remained vacant in 2014.  (21) By one estimate, more than 64 million surplus apartments had been built in China, enough to house almost half the population of the United States, yet millions more are under construction. (22) Economists have warned that what China is really building is the biggest real estate bubble in history. CBS interviewed Wang Shi, CEO of China Vanke, China’s biggest homebuilder (which makes him the world’s biggest homebuilder), who told CBS’s Lesley Stahl that this can’t last, “this is a bubble, for sure.” When it bursts, “it will be a disaster, a disaster.” (23)

Scene 6: Tofu Construction

Construction is breathtakingly fast in China but it can also be breathtakingly sloppy, dangerous and destined to a short life span. That’s because China’s local building department regulators, like food safety and environment regulators, are subordinate to local officials who partner with and profit off the very construction companies the regulators are nominally supposed to regulate. In result, safety is often subordinated to speed and cost, with predictable results. The Chinese call it doufazha, “tofu” construction. Bridges collapse regularly. Between July 2011 and August 2012, eight major bridges collapsed. An Australian reporter counted four collapsed bridges in just nine days in July 2012. (24) High-speed railway bridges collapse. Buildings collapse. Some just topple over. Millions of peasants have been cleared off the land and dumped into “new towns” around cities where the shoddy new housing is already crumbing as the displaced farmers move in. In 2010, China’s Ministry of Housing admitted the low quality of construction and warned that “China’s newly-built houses can only last for 20 or 30 years.” (25) Have the Chinese invented disposable housing?

Officials call for tougher regulations but most Chinese blame corruption. Zhu Lijia, a professor at the Chinese Academy of Governance in Beijing, says bid rigging is the norm and there are no checks or balances on the procurement process. “We do have relevant laws regarding the bidding process, but there is a lack of enforcement. The bidding process is only a show.” A college student, Zeo Niu, interviewed by National Public Radio after a major bridge collapse in 2012, knew the system well. Her uncle runs a construction company in central China. She said using substandard material while charging for high-quality goods is routine. What really upsets her, she said, “is that so many projects collapse, people just become overwhelmed. ‘I will never remember those victims’ names in this accident, and people won’t remember it,’ Niu said. ‘It will all be buried by another accident.'” (26)

“Twenty More Years of Roaring Growth”?

In The Wall Street Journal of August 20, 2014, Justin Yifu Lin, an economist and close adviser to senior leaders in Beijing, stated that he’s confident China can sustain its recent 8 percent per year growth rate for the foreseeable future. He predicts “20 years of roaring growth” for China. Really? Where does Yifu think the resources are going to come from for this scale of consumption? As it happens, in 2011, the Earth Policy Institute at Columbia University calculated that if China keeps growing by around 8 percent per year, Chinese average per capita consumption will reach the current US level by around 2035. But to provide the natural resources for China’s 1.3 billion to consume on a per capita basis like the United States’ 330 million consume today, the Chinese – roughly 20 percent of the world’s population – will consume as much oil as the entire world consumes today. It would also consume more than 60 percent of other critical resources.

Production Consumption* Commodity Unit Consumption Latest Year Projected Consumption 2035
U.S. China China World
Grain Million Tons 338 424 1,505 2,191
Meat Million Tons 37 73 166 270
Oil Million Barrels per Day 19 9 85 86
Coal Million Tons of Oil Equivalent 525 1,714 2,335 3,731
Steel Million Tons 102 453 456 1,329
Fertilizer Million Tons 20 49 91 214
Paper Million Tons 74 97 331 394

*Projected Chinese consumption in 2035 is calculated assuming per-capita consumption will be equal to the current US level, based on projected GDP growth of 8 percent annually. Latest year figures for grain, oil, coal, fertilizer and paper are from 2008. Latest year figures for meat and steel are from 2010. Source: Earth Policy Institute, 2011

How can this happen? What would the rest of the world live on? Already, as resource analyst Michael Klare reviews in his latest book, The Race for What’s Left (2012), around the world existing reserves of oil, minerals and other resources “are being depleted at a terrifying pace and will be largely exhausted in the not-too-distant future.”

B. Airpocalypse Now

Decades of coal-powered industrialization combined with the government-promoted car craze since the 1990s have brought China the worst air pollution in the world. Scientists have compared north China’s toxic smog to a “nuclear winter” and the smog is also sharply reducing crop yields. Lung cancer is now the leading cause of death in Beijing and nationally pollution-induced lung disease is taking the lives of more than 1.2 million people a year. With 20 percent of the world’s population, China now burns as much coal as the rest of the world put together. Twenty of the world’s 30 smoggiest cities are in China.

As domestic food grows increasingly unsafe, alarmed middle-class Chinese strip supermarkets of imported food.

Ironically, China is also a “green technology” leader, the world’s largest producer of both windmills and solar panels. Yet in China these account for barely 1 percent of electricity generation. Coal presently supplies 69 percent of China’s total energy consumption; oil accounts for 18 percent; hydroelectric, 6 percent; natural gas, 4 percent; nuclear, less than 1 percent; and other renewables including solar and wind, 1 percent. (27)China currently burns 4 billion tons of coal a year; the US burns less than 1 billion; the European Union, about 0.6 billion. China has marginally reduced the carbon intensity of production in recent years by installing newer, more efficient power plants but these gains have been outstripped by relentless building of more power plants. To make matters worse, even when power plants are fitted with scrubbers to reduce pollution, operators often don’t turn on the scrubbers because these cut into their profits.

While government plans call for reducing coal’s share of the energy mix from 69 percent to 55 percent by 2040, it projects that China’s absolute coal consumption will still rise by more than 50 percent in the same period in line with China’s projected economic growth of around 7.7 percent per year. The World Health Organization considers air pollution above 25 micrograms of particulate matter per cubic meter (PM2.5) to be unsafe. China’s current national average is 75 micrograms but particulate levels in many cities average in the hundreds.

In the winter of 2013, China suffered from the worst air pollution in its history as half of the country, nearly the whole of northern and eastern China, was smothered in dense smog for weeks at a time. Smog alerts were called in 104 cities in 20 of China’s 30 provinces as schools and airports closed in Beijing, Shanghai and other cities. In January, PM2.5 levels in Beijing reached 900 micrograms per cubic meter. As Beijing was choking in smog in the winter of 2013, Deutsche Bank analysts gloomily concluded that even if China’s economy slowed to 5 percent growth per year from it’s current 7.6 percent rate, coal consumption would still nearly double and China’s smog could increase by as much as 70 percent by 2030. (28)

China’s leaders thus face an intractable dilemma. They can’t keep growing the economy without consuming ever more coal, oil and gas. Yet the more fossil fuels they burn, the more uninhabitable China’s cities become, the more Chinese people flee the country, and the faster China’s emissions are driving global warming.

Cooking the Planet to Produce Junk No One Needs

China surpassed the United States in 2007 to become the world’s leading carbon dioxide emitter. By 2013, China’s emissions were already nearly double those of the US. The US Energy Information Administration calculates that even if China grows at only 5.7 percent per year, 2 percent less than its current rate and about half the average rate it grew over the past decade, its carbon dioxide emissions would still soar to almost 15 billion tons by 2040, almost triple that of the US. (29) By 2013, China’s per capita emissions surpassed those of Europe. With just 20 percent of the world’s population, China already accounts for almost 30 percent of global carbon dioxide emissions.

Coal-to-Gas Bases Will Doom the Climate

Under pressure to reduce smog and greenhouse gas emissions but still maintain economic growth, the government has begun talking about putting a cap on coal emissions. But this cap would be pegged to expected growth and demand, so coal use is likely to continue rising for years. (30) Yet the most worrisome threat to reducing emissions comes from the government’s newest plan to “clean up its cities” by building dozens of huge “coal-gasification bases” in Shanxi, the Ordos Basin, Inner Mongolia, Xinjiang and other remote areas. These plants will burn coal directly to generate electricity in situ and convert coal to liquid fuels like “syngas” (like natural gas but from coal), which will then be transported to the cities to be burned in power plants, factories and cars.

These huge bases, some encompassing areas larger than the states of Delaware and Connecticut, will be the largest fossil fuel development projects in the world. And far from reducing coal use, scientists say, these complexes consume so much coal-fired energy to produce the syngas and other chemicals that they generate almost twice as much carbon dioxide emissions as if the coal were just directly burned in power plants. (31) Furthermore, water-intensive coal extraction in the new coal bases in northern and western provinces threatens to seriously aggravate China’s already severe water crisis in these regions. (32) And as if all this weren’t enough, the government has also declared its intention to develop “fracking” wherever possible in China. (33)

The UN Intergovernmental Panel on Climate Change calculates that if we’re to keep global warming below 2 degrees Celsius, humanity cannot add more than 880 gigatons of carbon dioxide emissions to the atmosphere before 2050. Collectively, we’ve already used up more than half of that “carbon budget” leaving us a remaining budget of just 349 billion gigatons. If China produces just 10 billion tons of carbon dioxide per year, its current rate, with no growth whatsoever, it will still consume the entire carbon budget for the whole of humanity by itself by 2050.

C. Undrinkable Water, Poisoned Soils, Toxic Food

If the air is bad, the water is far worse. In a few decades of breakneck industrialization, the Chinese have managed to severely and irreversibly pollute most of the nation’s fresh water supplies with dire implications for public health. China’s fresh water sources are contaminated by pesticides, industrial chemicals, heavy metals and myriad other toxics. China’s largest rivers resemble vast open cesspools and for much of their length the banks are strewn with every imaginable kind of trash, and numberless outlet pipes spewing multiple toxics, dead fish, dead pigs and pigswill. Gushing pollutants turn long stretches of rivers bright red or purple or milky white or inky black. Sewage is routinely dumped mostly untreated in the nation’s rivers, the same rivers many cities take their drinking water from, imperiling the health of hundreds of millions. The government has built wastewater treatment facilities all over the country but most remain unused. (34)

These days China’s state sector has all the superficial trappings of a market economy.

China’s rivers suffer huge spills of all kinds of toxic chemicals – benzene, xanthogenate, analine – every year. In north China, the Yellow River “is a catastrophe” and the 300-odd rivers that drain the North China Plain “are open sewers if they are not completely dry” in the words of Ma Jun, China’s leading authority on the country’s water crisis. (35) According to a government report, the Yangtze River, the world’s third longest, is seriously and irreversibly polluted. Long stretches are said to be in “critical condition,” in places, too dangerous even to touch. Aquatic life has all but collapsed. Pollution and shipping wiped out China’s legendary Yangtze Baiji dolphin while even common carp “are gasping for survival.” (36) The 500-mile-long reservoir filling up behind the huge Three Gorges dam on the Yangtze qualifies as the world’s biggest cesspool. In some areas groundwater is being irreversibly polluted as textile dyeing mills and other factories, looking to avoid fines for dumping their effluents into rivers, instead drill and pump them into the earth. Some “use high-pressure pumps to discharge huge volumes of their wastewater directly underground.” According to one scientist, “deliberate, malicious waste discharge by factories has already become endemic.” (37)

The China Geological Survey reported in 2013 that 90 percent of the country’s groundwater is polluted, and 60 percent of it is “severely” polluted. A survey of 11 cities across China in 2012 indicated that 64 percent of water sources were severely polluted and 33 percent moderately polluted. Only 3 percent of sources could be graded as clean. (38) It’s difficult to overstate the dire implications of these practices: In China, groundwater is not only tapped for drinking water throughout rural China as well as in many cities, but over much of the country, especially the parched northern plains, this is the main source of water for farming.

Mass Production of “Cancer Villages”

China’s rivers have received many major toxic industrial chemical spills over the years. In September 2004, Jim Yardley of The New York Times reported on the situation in the Huai River basin, upstream from Shanghai, after a huge chemical spill created an 82-mile-long band of water that killed nearly every living thing and was too polluted even to touch. And the Huai, Yardley pointed out, was supposed to have been a government “success story.” (39) In April 2014, a major leak of benzene poisoned the drinking water for millions in Gansu Province.

Beginning in the 1980s and 1990s, the government promoted the development of market-oriented “township and village industries” to promote growth and employment. These industries, the darlings of the World Bank and Western market-enthusiast academics, became notorious polluters. Foreign-invested special economic zone industries are also major polluters. (40) In the 1990s and 2000s, in response to growing anti-pollution protests in the cities, the government pushed dirty industries out of the cities and into the countryside and rural towns. This brilliant move resulted in horrific contamination of whole rural regions and the mass production of “cancer villages” where extraordinary numbers of inhabitants are dying from intestinal, liver and other cancers caused by ingesting toxic water and food.

Nongovernmental organizations count at least 459 villages spread across every province except far-western Qinghai and Tibet. In one village, 80 percent of the population is said to have died from pollution-induced cancers since 1991. (41) There are villages where almost every child is lead-poisoned. (42) Dumping of toxic chemicals and heavy metals extends even to remote corners of China. In neo-tropical Yunnan Province, investigators have found “rampant chromium dumping” polluting rice paddies and drinking water.

The Damage Done

The problem with water pollution, unlike air pollution, is that it doesn’t disappear once the dumping stops. Heavy metals and other contaminants don’t easily break down or wash away. They can be very long-lived and can’t really be “cleaned up.” (43) Once groundwater is polluted, there’s just no possible remediation. This means that extensive areas of China’s farmland, especially in the north, are effectively doomed. (44) This is taking a huge toll on the health of Chinese people as well as non-human life forms and poses a mortal threat to the entire society. Elizabeth Economy, author of The Rivers Run Black (2007), writes that “Less well documented [than air pollution] but potentially even more devastating is the health impact of China’s polluted water. Today, fully 190 million Chinese are sick from drinking contaminated water. All along China’s major rivers, villages report skyrocketing rates of diarrheal diseases, cancer, tumors, leukemia, and stunted growth.” (45)

The Bad Earth and Toxic Foods

China’s farmlands are extensively polluted with synthetic fertilizers, pesticides, heavy metals, sewage sludge and innumerable industrial toxics. Much of this comes from polluted irrigation water. In places, even industrial wastewater has been used to irrigate farms when local wells have dried up or are themselves too polluted to use. In December 2013, the Ministry of Land and Resources reported that 3 million hectares (7.4 million acres – roughly the area of Belgium) of China’s farmland is too polluted to grow crops on and researchers said that “as much as 70 percent” of China’s farmland could be contaminated to some degree. (46) In April 2014, the government reported that almost 20 percent of the country’s arable land, 10 percent of its woodlands and 10 percent of its grassland soils were seriously polluted with heavy metals, such as cadmium, mercury, arsenic, lead, chromium, zinc and nickel plus inorganic compounds including DDT. The survey, carried out between 2006 and 2010, but suppressed for four years as a state secret out of fear of public outrage, summed up the nation’s farmland situation as “grim”(yanjun). (47)

Shocking as this is for a nation that must try to feed 20 percent of the world’s population on 7 percent of the world’s arable land, environmentalists suspect the published figures understate the true extent of soil contamination. (48) In November 2014, the government conceded that 40 percent of the nation’s farmland is degraded from acidification, pollution and erosion, and the government “is growing increasingly concerned about its food supply after years of rapid industrialization resulted in widespread pollution of waterways and farmland.” (49)

Life in the Communist Party is not so different from life in the mafia.

In May 2013, the Food and Drug Administration of Guangzhou, the capital of Guangdong Province, reported that 40 percent of the rice tested at restaurants that spring was contaminated with cadmium, a highly toxic heavy metal than can cause bone disease, cancer and other illnesses. Since extensive national testing has not yet been done for this or other contaminants, there is concern that such pollution is widespread. Fish (and fishermen) have also been found to have high levels of cadmium, mercury and lead. (50)

To add further insult to consumers, deliberate food adulteration, contamination and fakery is rife in China. In 2008, public anger erupted after the government reported that tens of thousands of children were at risk of kidney stones and other organ damage from milk powder mixed with melamine, a chemical used to deceive protein tests. At least six infants died from illnesses linked to the tainted powder, which sickened more than 300,000 children.

Despite repeated government crackdowns, food contamination is severe and growing in China. As domestic food grows increasingly unsafe, alarmed middle-class Chinese strip supermarkets of imported food and Chinese tourists clear out the shelves of baby formula from New Zealand to Holland to pack and take home in their suitcases. Public alarm is also driving up food imports, which in turn is driving up world food prices. (51) For the first time in its history, China now imports more grain than it produces. This is bad news not only for China’s basic food security but also for natural resources around the world as China’s demand for soybeans, corn, wheat and other grains is leveling forests from Africa to the Amazon.

What’s Going on Here?

Why is it that the same government that has lifted the living standards of more people – millions – faster than any other nation in history, that has built the world’s largest high-speed rail network, the largest airports, longest bridges, skyscrapers by the hundreds and whole cities practically overnight, can’t guarantee safe drinking water or food or medicines or breathable air to its citizens? Why can’t it enforce its own environmental regulations, or its own building codes? Why can’t it stop its own local governments from squandering money building unneeded housing, airports and rail lines? Why is it that the same ruthless police state that so proficiently crushes dissent and censors the internet can’t stop producers, even state-owned companies, from making lead-paint-coated toys, poisoned milk and baby formula, and toxic meat and dumplings, and can’t suppress corruption in its own officials? The answer to all these questions is to be found in the nature, contradictions and tendencies of China’s hybrid bureaucratic collectivist-capitalist economic system.

II. A Political Economy

China’s rulers preside over the largest and most dynamic economy in the world, a powerhouse of international trade whose state-owned conglomerates count among the largest companies in the world. They profit immensely from their state-owned enterprises’ (SOEs) market returns. But they’re not capitalists, at least not with respect to the state-owned economy. Communist Party members don’t own individual SOEs or shares in state companies like private investors. They collectively own the state, which owns most of the economy. They’re bureaucratic collectivists who run a largely state-planned economy that also produces extensively for the market. But producing for the market is not the same thing as capitalism. (52)

Three of the top 10 2014 Fortune Global 500 corporations are Chinese. But they’re not owned by Chinese capitalists. They’re owned by the Chinese government. James McGregor notes, “Of the sixty-nine companies from mainland China in the Fortune Global 500 in 2012, only seven were not SOEs … [and all of these seven] companies have received significant government assistance and most count government entities among their shareholders.” Thirty-five years after the introduction of market reforms, China’s government still owns and controls the commanding heights of the economy: banking, large-scale mining and manufacturing, heavy industry, metallurgy, shipping, energy generation, petroleum and petrochemicals, heavy construction and equipment, atomic energy, aerospace, telecommunications, vehicles (often in partnership with Western companies), aircraft manufacture, airlines, railways, biotechnology, military production and more. Plus all the land and natural resources: There is no private property in China.

“Families benefited from their control of state companies, amassing private wealth as they embraced the market economy.”

In key industries SOEs own and control between 75 and 100 percent of assets including 96.2 percent of telecom, 91.6 percent of power generation, 76.6 percent of petroleum and petrochemicals, 76.2 percent of airlines, 74 percent of autos, and so on. China’s banks are 100 percent state-owned (though there are some private equity firms). (53) In the words of James McGregor, “SOEs monopolize or dominate all significant sectors of the economy and control the entire financial system. Party leaders deploy the SOEs to build and bolster the economy – and undergird the Party’s monopoly political control. The private sector provides a lubricant for growth and the opportunity for people to become rich as long as they support the Party.” (54) SOEs together with local government-owned urban collective and township and village industries currently account for 50 percent of China’s current non-farm GDP. Foreign-invested joint ventures account for about 30 percent of non-farm GDP (though Chinese partners of larger joint ventures, like auto assembly, are mostly SOEs). China’s indigenous private sector accounts for about 20 percent of non-farm GDP. (55)

SOEs resemble capitalist corporations but they’re not driven by the same motor of market competition; they don’t face the same incentives and penalties as capitalist firms, at least not to the same extent, and they’re not run like capitalist companies. (56) These days China’s state sector has all the superficial trappings of a market economy: corporations, CEOs, IPOs, stock markets and so on. The Ministry of Petroleum is now called China National Petroleum Corporation. Baoshan Iron and Steel now calls itself Baosteel Group Corp. and so on. But SOEs aren’t “corporations.”

Dozens of Chinese SOEs have held IPO listings on the New York Stock Exchange and China’s own toy stock markets in Shenzhen and Shanghai. But the government won’t allow its companies to be bought and sold. It will only permit a minority of shares, not more than 25 percent, and only non-voting shares at that, to be traded on the market. As one expert put it “the Chinese government is the only shareholder that counts.” (57) Lots of SOEs produce some or most of their output for the market. State Grid produces power for, besides China (where it has a monopoly), Singapore and Australia, and is developing facilities in the Philippines and Portugal. But State Grid does not answer to shareholders or boards. China’s SOEs are not run by boards of directors and elected CEOs. They don’t have boards of directors. And their CEOs and senior management are all appointed by the Communist Party. All Chinese state “corporations” have Communist Party secretaries who without exception outrank the enterprise CEOs. (58)

To be sure, China has a vast capitalist market economy side-by-side with the state sector. Thousands of real, foreign corporations operate in China today: Apple, Toyota, Audi, GM, Samsung, Procter & Gamble, Walmart, even the Avon lady. And China has plenty of homegrown entrepreneurs and privately owned businesses. China is said to have more than a million US-dollar millionaires and at least 89 billionaires. The private sector includes sizeable companies like Baidu (the internet search giant that dominates the China market since Google left), Tencent (instant messaging), Jack Ma’s Alibaba, real estate developers like Dalian Wanda Group and China Vanka, food processors like Wahaha Corp., insurance companies, and others. But these are not the core of the economy. China’s biggest private company by valuation, Alibaba, doesn’t produce anything at all; like eBay it just connects sellers with buyers. Most of China’s private businesses are small, on average less than half the size of SOEs, and the vast majority are even smaller. They include thousands of small coal mines, thousands of local construction companies, some small steel mills, textile and garment industries, shoemakers, retail shops and supermarkets, restaurants, self-employed truckers, family businesses and the like.

“Get Rich and You’ll Get Audited”

The Communist Party keeps its domestic capitalists on a short leash. Successful entrepreneurs soon find they need a state “partner,” or the government sets up its own competitors to suppress them, or they suffer forced buyouts. Those who cross the Party disappear and their property is seized, and worse. (59) Those whose names appear on Forbes’ list of the world’s wealthiest citizens or the Hong Kong Hunrun Rich List sometimes vanish without a trace. Chinese people call these the “pig-killing lists.” Middle-class Chinese speculate on apartments and suburban villas but the land they sit on is state-owned. Indeed, even title to the apartments and villas they’ve bought is never really secure because these can easily be seized by the state on a whim, with no recourse.

It’s been estimated that in the last three decades more than 60 million Chinese farmers and urban residents have been summarily evicted from their homes and farms to make way for government development projects of all sorts across the country. More than a million and a half farmers and townsfolk were evicted to make way for the Three Gorges Dam. Several million residents of Beijing were evicted to shabby satellite towns while their ancient Beijing homes, some dating back to the Ming dynasty, were leveled to make way for shopping malls, apartment towers and Olympic sports stadiums. (60) In such a system, arbitrary political power and generalized insecurity condition every aspect of life, even within the ruling Party itself – especially within the ruling Party.

A. Beijing’s Game of Thrones

China’s ruling class is the nomenklatura, the upper ranks of the 86-million-member Chinese Communist Party. Since the victory of the revolution in 1949, China has been run by the party-army-bureaucratic aristocracy, the leaders of which reside behind the walls of the Zhongnanhai complex adjacent to the Forbidden City. (61) In the 1950s, they nationalized the economy, divided up government administrative and economic management posts among themselves and centralized all surplus extraction. Today, this state-owned economy is run by their children and will soon be run by their grandchildren.

Since Mao’s death in 1976, the inner circle of the ruling “red families” have been headed up by the so-called “Eight Immortals”: Deng Xiaoping, Chen Yun (the CCP’s leading economic planner), Wang Zhen, Li Xiannian (PRC president), Peng Zhen (NPC Congress chair), Song Renqiong (party personnel chief), Yang Shangkun (PRC president), and Bo Yibo (vice premier and last of the eight to die at 98 in 2007). (62)As the elders retired and died off they entrusted the reins of power to their children, the “princeling” (taizi dang) sons and daughters of the first generation of communist rulers. Since the bad old days when Mao and his Gang of Four dispatched their rivals to rot in dungeons, or shot Lin Biao’s plane out of the sky to prevent his escape to Moscow, the Communist Party has made every effort to present a public façade of leadership unity and discipline and portray its internal workings as “regularized” with “collective leadership,” “10-year rotations” of “presidents” and “prime ministers,” “mandatory retirement of senior officials at 65″ and so on. Nothing could be further from the truth.

A study released in February 2015 declared that living in China’s cities is “as deadly as smoking.”

Today, as in Mao’s day, CCP internal political machinations resemble nothing so much as The Godfather or “Game of Thrones.” And how could it be otherwise? In the absence of the rule of law, without elections to choose government representatives, without inner-party democracy, without constitutional procedures to regularize succession to office, without an independent judiciary, justice department, attorney generals and police to systematically prosecute and punish corrupt politicians, in such a system, no one owns their office, position or job on the basis of merit, professional qualification, fixed-year terms or enforceable contracts. Every cadre’s personal and political security depends, above all, on the strength of his/her guanxi: his connections and relationships with networks of allies, their patrons above, their supporters below and especially to families, clans and factions.

From the days of Mao’s purges of “capitalist roaders” Lin Biao, Liu Shaoqi and Deng Xiaoping, to Deng Xiaoping’s own purge of the Maoist Gang of Four, to Jiang Zemin’s purge of “counterrevolutionaries” Zhao Ziyang, Bao Tong et al. in the wake of the 1989 Tiananmen uprising, to current President Xi Jinping’s show trials of  “corrupt” rival Bo Xilai (son of Bo Yibo) and his persecution of powerful opponents in the oil faction and secret police led by Zhou Yongkang, the Chinese Communist Party’s internal political dramas differ little from the treacherous, fratricidal power struggles of the Corleones, Barzinis and Straccis of The Godfather or the bloody feudal wars of the Starks, Tullys and Boltons for supremacy in Westeros. As in “Game of Thrones,” China’s communists are embroiled in nonstop faction building, never-ending intrigue and infighting, and treacherous factional struggles while the paramount leader du jour‘s claim to the red throne in Zhongnanhai is never completely secure. (63)

President Xi Jinping came into office in 2012 on a campaign vowing to “swat tigers and flies alike.” Xi had been brought in to replace the disgraced Shanghai Mayor Chen Liangyu on the strength of his anticorruption campaigns in Zhejian Province where he once told an anti-graft conference: “Rein in your spouses, children, relatives and friends and staff, and vow not to use power for personal gain.” (64) But Xi is just as corrupt as all the rest, and just as thuggish.

Xi once remarked that as a young man he liked to watch The Godfather. Yu Jie, an exiled author of numerous critical books on China, titled his latest book, Godfather of China Xi Jinping (still awaiting publication as of March 2015). Yu told The New York Times that the film was Xi’s political study guide: “The Communist Party is China’s biggest mafia, and the party boss Xi Jinping is the godfather of China.” As if to confirm Yu’s thesis, when he tried to publish the book in Hong Kong, one publisher was arrested in Shenzhen and disappeared. A second prospective publisher received a threatening phone call from Beijing telling him that the book “absolutely cannot be published” and if he publishes it, “your personal safety and the safety of your family cannot be guaranteed” so he immediately dropped the project.

Life in the Communist Party is not so different from life in the mafia: It’s a constant, treacherous and highly dangerous nonstop factional struggle between crime family-based groupings in struggle with one another over top offices and treasure. The key to safety is building unshakable vertical and horizontal networks of support and protection – of guanxi. And the key to solidifying those networks is sharing the loot from corruption. As political scientist Minxin Pei put it: “If your patrons do not protect you, you’re toast … Corruption is the glue that keeps the party stuck together.” (65)

B. Grabbing the Brass Ring: Gangster Capitalism and the Necessity of Corruption

China’s economy mirrors its politics. China’s communist party-state has grown immensely wealthy over the past three decades from rivers of income flowing in from huge state monopolies like Sinopec (China Petroleum), State Grid, Bank of China, China Telecom, from taxing export foreign exchange earnings, and more. But the question is, how is this loot shared out among the ruling class of China, the “gang” of 86 million Communist Party members? In capitalist economies, this is entirely formalized and regularized. One’s wealth is based on property, cash in the bank, stock ownership and such – all secured by the rule of law, enforceable contracts, an impersonal state, independent judiciary and the police. But China has none of this. Cadres don’t privately own SOEs; they don’t own shares in SOEs.

Yet we know from multiple sources including trials of corrupt officials, revelations about secret offshore bank accounts, records of foreign property purchases, and especially from recent headline exposés in The New York Times and Bloomberg News on the wealth of China’s leading “princelings” including former and current heads of state, that China’s Communist Party cadres have gotten gloriously rich by way of market reforms. (66) The New York Times calculated that former Premier Wen Jiabao was worth at least $2.7 billion when he retired in 2012, all secreted under the names of close relatives. (67) As Xi Jinping climbed the party ranks, his extended family got rich in minerals, real estate and mobile-phone equipment. Today, his family is worth at least $376 million, again, with virtually all of it listed in the names of his close relatives rather than his own.

Markets and the Mother of All Moral Hazards

When Deng Xiaoping rejected Maoism and told the Chinese that now it was OK, even  “glorious to get rich,” he faced an immediate problem: To get marketization rolling, he urged the cadres to promote private businesses and joint-ventures with foreign investors, to “jump into the sea of commerce” as he said in his famous “southern tour” of Shenzhen in 1992. Deng’s market reforms thus presented the personally penniless but functionally all-powerful CCP cadres with the mother of all moral hazards. China’s reintroduction of capitalism presented the cadres with a once-in-an-epoch opportunity to grab the brass ring, to get rich, really rich, and fast. The party-state owned all land, resources and industries, and controlled the banks and pension funds, foreign trade and currency exchange, courts, police and everything else. The problem was that the only ways to profit from this were all illegal: bribery, smuggling, influence peddling, embezzling money from state industries, profiting from guandao (reselling state-owned raw materials and commodities on the free market at huge markups), asset stripping, currency manipulation, money laundering and so on.

Risky, but how could they resist? Far from resisting, they led the way in what exiled economist He Qinglian called “the marketization of power.” (68) Besides, since there was no independent judicial system, it was left to the party officials to police themselves. The very people who stood to gain the most from the coming market boom were supposed to refrain from self-dealing. Even so, the breadth and brazenness of corruption grew slowly at first. Looking back to the 1980s, Bao Tong, a senior party official arrested and imprisoned as a “counterrevolutionary” during the 1989 Tiananmen crackdown told Bloomberg News in December 2013: “A bottle of Moutai, two cartons of Chunghwa cigarettes – corruption was no more than that at the beginning…. Now an enterprise worth 10 billion yuan can be purchased with 1 billion. This would have been appalling to people back then.” (69)

“It Doesn’t Matter Who Owns the Money; It Only Matters Who Gets to Use It”

Today, the buffet of benefits available to the upper ranks includes extravagant state-provided housing, posh offices, fleets of limousines, access to state-owned vacation villas, travel and plenty of pocket change to spend on fine French wines, Rolexes, Louis Vuitton handbags and the rest. At the top, princelings are often heads of giant conglomerates, which themselves own dozens or even hundreds of individual SOEs. Presumably this gives them access to multiple income streams and ample opportunities to plunder the government’s ever-growing treasure. Princeling Bo Xilai didn’t send his son Guagua to Harrow, Oxford and Harvard, and buy him Porsches, Ferraris and fancy apartments in Oxford and Cambridge, Massachusetts, on his official salary.

Even China’s leaders complain that China’s “governments at all levels” had turned the state’s banks into “ATMs for officials and official businessmen.” (70) As one SOE boss put it: “It doesn’t matter who owns the money; it only matters who gets to use it.” (71) As individuals, they loot according to their rank, positions and guanxi. And of course, who gets to use exactly what is shrouded in secrecy. Financial Times Beijing bureau chief Richard McGregor quotes a businessman jailed on corruption charges who said: “Every official has three lives. Their public life, their private life, and their secret life.” (72)

In the boom years of the 1990s and 2000s in China’s ruling class, taking their cue from New York banksters who were becoming their partners and backers, corruption flourished on a previously unimagined scale. They siphoned huge sums from state banks, SOEs and ministries. They looted pension funds and state charities. They’ve profited from illegal arms sales and smuggling. They made vast fortunes in real estate evicting millions of farmers and selling their land to developers. They made more fortunes taking cuts from listing Chinese companies on the New York Stock Exchange. In all this, the “princeling” children and grandchildren of the “Eight Immortals” have led the way.

“The anticorruption push is more of a Stalinist purge than a genuine attempt to clean up the government.”

In the 1980s, Deng Xiaoping, Chen Yun and the other aging revolutionary generation leaders entrusted their children to run the new market-oriented state conglomerates like CITIC, China Poly Group (arms, African oil, etc.). Deng’s daughter Deng Rong and her brother Deng Zhifang were among the first to go into real estate in the 1990s. As Bloomberg reported in its investigative report on the 103 children and grandchildren of the Eight Immortals, “Families benefited from their control of state companies, amassing private wealth as they embraced the market economy. Forty-three of the 103 ran their own business or became executives in private firms … The third generation – grandchildren of the Eight Immortals and their spouses, many of whom are in their 30s and 40s – have parlayed family connections and overseas education into jobs in the private sector.” Others took over state-sector conglomerates and SOEs.

Twenty-six of the heirs of just these eight revolutionary leaders ran or held top positions in big SOEs: “Three children alone – General Wang’s son, Wang Jun, Deng’s son-in-law, He Ping; and Chen Yuan, the son of Mao’s economic tsar – headed or still run state-owned companies with combined assets of about $1.6 trillion in 2011. (73) Deng’s son-in-law Wu Jianchang got himself appointed head of numerous metals companies and then became, conveniently, minister of metallurgy. Deng’s grandson Zhuo Su got himself appointed head of a company that bought into an Australian iron ore business. Wang Jun, the revolutionary general’s son, set up a huge conglomerate, Poly Group, with Deng Xiaoping’s son-in-law He Ping, another general. Chen Yun installed his son Chen Yuan as head of the giant state-owned China Development Bank with assets of more than $1 trillion. His sister, Chen Xiaodan, worked at Morgan Stanley in New York, set up her own private equity firm, and worked with her father’s China Development Bank to support Chinese firms investing abroad in Europe and elsewhere.

Wang Zhi, General Wang’s third son, “borrowed” 300,000 yuan from his employer, the Ministry of Electronics, to set up his own company building personal computers, eventually partnering with Bill Gates to develop a Chinese version of Windows software. As Yang Dali of the University of Chicago put it, “The entire country was in business – the Party, the military, the courts, the prosecutor’s office, the police…. Insiders could get rich very quickly.” And “[w]hen the top is corrupt, this is how it will be all the way down,” said Dai Qing, China’s leading environmental activist who herself grew up in the Zhongnanhai compound with the princelings after being adopted by a famous general. (74) Bloomberg reports that, when he was lying in a hospital bed in 1990, hardline Maoist Gen. Wang Zhen (1908-1993) told a visitor that he felt betrayed by his own children. Decades after he had risked his life fighting for an egalitarian utopia, his children were only interested in getting rich: “Turtle eggs,” he said to the visiting well-wisher, using a slang term for bastards. “I don’t recognize them as my sons.” (75)

Getting the Loot Out of China

International banking connections also have been key to the princelings’ strategy of getting their loot out of China. Over the years, it has been estimated that princelings and other high cadres, cronies and capitalists have funneled $1-4 trillion in unreported assets out of the country since 2000. Credit Suisse, PricewaterhouseCoopers and UBS – Western banks with notorious experience in sheltering US and other tax evaders – set up secret companies and accounts for at least 21,000 Chinese in Caribbean tax havens including for Wen Yunsong, Wen Jiabao’s son. High cadres, their relatives and other rich guys fly suitcases of money to North America, Australia, Caribbean havens and other friendly destinations. (76)

In February 2014, it was reported that more than 45,000 (!) Chinese millionaireshad queued up in Vancouver, British Columbia, to get investor residence visas in return for five-year, interest-free loans to the Canadian government. In the US, 80 percent of the government’s EB-5 investor program visas are going to wealthy ex-mainland Chinese; in Australia, it’s nine out of 10. At least 18 of the Eight Immortals’ descendants own or run entities registered in the British Virgin Islands, Cayman Islands, Liberia and other secret offshore tax havens. (77) Bo Yibo’s wife Gu Kailai, convicted in 2012 of murdering her British business partner, controlled a web of businesses from Beijing to the Caribbean worth at least $126 million and stashed many of her assets with her sister in places like the British Virgin Islands, according to Bloomberg. (78) So it goes.

C. Implications, Tendencies, Consequences

This structural arrangement of bureaucratic/gangster capitalist power and property has given China’s economy a radically different pattern and trajectory of economic development from normal capitalism anywhere in the West. We can specify at least the following broad systemic tendencies in this hybrid economic system:

1. Priority to the state-owned economy: Shocked and riveted by the collapse of communism in Eastern Europe and especially the communist debacle in the USSR, Deng Xiaoping and his successors have been determined to avoid such a fate by maintaining state control over the commanding heights of the economy, avoiding substantial privatization and limiting the internal market, as noted above. That’s why the maximand of China’s SOEs is not profit maximization. Their maximand is the security, wealth and power of the Chinese Communist Party and that’s not the same thing. The Bank of China, China Development Bank, the Industrial & Commercial Bank of China and other huge state banks sit at the apex of China’s economy and count among the Global Fortune 500 largest companies. But unlike Citibank or HSBC, their job isn’t to make money. Their job is to lose money – or more precisely, to disburse it.

It’s often said that in the transition to capitalism China’s market reformers “abandoned central planning.” That’s an exaggeration. They reduced the scope of indicative planning but they did not abandon planning the state sector; they monetized it. Instead of issuing physical output targets à la Stalin and Mao, they direct most of the state economy by writing checks: by ordering state banks to disburse funds to support the production goals of the state plans (though they still set physical targets for some items – kilometers of rails, kilometers of roads, tons of wheat and cotton etc., as noted above). In the 1990s, the government leased out, sold off or closed down thousands of small unprofitable SOEs producing consumer goods including wood and leather products, furniture, building materials, garments, food products and the like. Dispensing with these, the government concentrated on restructuring, modernizing, expanding and diversifying the state’s SOEs. (79)

The government also expanded the state sector by establishing entirely new industries: consumer appliances, solar and wind power, biotech, high-speed trains, passenger aircraft, IT and others. But instead of assigning production targets for quantities of Geely cars, Suntech solar panels or China National Railways (CNR) high-speed trains, they allocate funds via state banks to support state-owned industries like CNR and to establish and support state-private joint ventures like Suntech and Geely. Since the 1990s, China’s SOEs, and the entire state industrial sector, have grown enormously. Whereas in the 1970s, China’s SOEs counted for almost nothing in the world economy, today, China’s “national champions” Sinopec, China National Petroleum and State Grid Corporation rank among the 10 largest companies by revenue in the 2014 Fortune 500.

Prioritizing the state sector means that the government often finds it rational to subvert its own market reforms to protect state interests: So when the head of a major state-owned conglomerate was removed for embracing market economics too enthusiastically, a Beijing University expert on China’s state-enterprises commented: “There’s a system in place, not just one person. The party’s appointee draws his position from patronage … and the task is to engage with state leaders and safeguard government assets, not to maximize profits.” (80) This is why the government enforces SOE monopolies regardless of efficiency, why it limits Western investor ownership share in joint ventures, why it bars Western firms from investing in key industries, and why it directs its huge sovereign wealth fund mainly to invest in the resource extraction industries China needs to fuel its national economic development even though global resource prices and resource industry profits have both been falling since 2008. (81) This is all in the collective interest of China’s state-based ruling class.

Yet at the same time, individually, princelings and well-placed cadres are simultaneously conniving, like the gangsters they are, to privatize pieces of the state-owned economy and to sell them at huge discounts to themselves, their relatives and partners, usually via private investment banks that have their real owners concealed behind multiple layers of paper and shell companies. Cadres also funnel money out of SOE profits to buy businesses and properties in the West. SOE overseas companies open still other opportunities to privately pocket profits earned overseas before they’re sent back to China. It can’t be ruled out that such trends could eventually lead to a broad selloff of state assets à la Poland. But for the present, the party seems determined to protect the state-owned economy rather than let it collapse and be sold off and privatized.

2. Hypergrowth drivers: incentives without penalties: China’s SOEs, as we noted, don’t live or die on the basis of their performance in the market. Lots of SOEs are inefficient but because many are also monopolies, they can still be gold mines. (82) As one official observed, “the overall economy has been so good that even pretty stupid SOEs could do well without much effort.” (83) Broke, indebted, inefficient or not, so long as their SOEs are in-plan, and especially if they’ve been designated “key” or “strategic” or “pillar” industries like coal, oil, autos, aerospace, biotech, high-speed rail or some other priority, SOE managers could assume that they would never be forced out of business regardless of their economic performance and generally speaking they have not been.

In result, SOE managers have had the best of both worlds: They have every incentive to borrow and spend, especially on capital construction (including those palatial offices to run the operations), but they face little or no threat of discipline for excess or failure. Given the profit-sharing arrangement between the center and the SOEs, for SOE bosses, it’s capitalism when the SOE is making money but socialism when it needs a government bailout. This is the main driver of “blind growth” across the economy and this can be expected to continue.

3. Hypergrowth drivers: job creation: In capitalist economies, neither individual companies nor governments are obliged to create jobs, though in extreme circumstances like the Great Depression, governments have set up jobs programs to keep the peace. But in China, in the old Maoist bureaucratic collectivist system, the government was the only employer, so it had to employ everyone because there was nowhere else to find work. In Mao’s day, successive generations of workers were simply assigned to work units (danwei) with the result that China’s industries and government offices were often abundantly overstaffed. But with the turn to the market, the government abolished guaranteed employment in the mid-1990s and SOEs laid off some 50 million superfluous workers in the 1990s to make their industries more efficient.

By then however, many excessed workers could find jobs in the new parallel market economy while others were forced into retirement on subsistence pensions. The destruction of millions of state jobs with state benefits provoked widespread protests and unrest in the late 1990s and early 2000s. To contain this unrest, and also to keep up with China’s relentless population growth, the government has been forced to spend heavily on wave after wave of WPA-like, make-work capital construction projects across the country since the 1990s, even if much of what got built was unneeded, as noted above. Given the special threat that extensive unemployment poses to a nominally workers state, this pattern of make-work overproduction and overdevelopment can be expected to continue.

4. Collective property weakens efforts to reduce pollution: Collective ownership means that even with its police-state dictatorship, the center can’t always enforce its will against lower-level officials because those local, country, provincial, ministerial officials, SOE bosses and so on are more partners with Beijing in their joint ownership of the national economy than strictly subordinates. They all have their own guanxi networks to defend their turf and promote their own interests in contravention of central initiatives when it suits their purposes. This is why central efforts to restrain pollution tend to be subverted or defeated by local officials whose overriding concern is to keep the economic engines running regardless of the smog.

China has comprehensive environmental legislation on the books. It has its own Environmental Protection Agency equivalent, the State Environmental Protection Agency (SEPA). It has a State Food and Drug Administration (SFDA) and other regulatory agencies. But the evidence everywhere is that regulation is largely a failure. (84) Here and there SEPA has managed to enforce some cleanups and shutdowns of some conspicuous polluters, usually smaller operations. But more often than not, SEPA regulators are powerless against polluters because environmental protection officers are subordinate to and even paid by local officials who profit from and generate jobs in the same polluting industries SEPA wants to suppress. (85)

In her documentary Under the Dome, Chai Jing asks Ding Yan, the director of the government’s Ministry of Environmental Protection (MEP) Vehicular Pollution Research Institute, about why his agency doesn’t force China’s vehicle manufacturers to stop selling trucks with fake National Standard 4 emission stickers certifying that the vehicles meet the highest emissions standards when in fact they only meet the lowest National Standard 1. “If you (the MEP) assert you have legal authority, no one can deny that, so why not just execute the law?” Ding told her that regardless of the law, his agency had no real power to enforce it: “Nowadays, I don’t dare open my mouth out of fear that [the polluters] will see that I have no teeth” (at 48:19).

Since the highly personalized and politicized state can’t rely on the rule of law, independent courts and police to enforce its environmental regulations, the government has to resort to “campaigns” to enforce environmental compliance. But this approach is hopelessly ineffectual. Beijing issues big directives, sends inspectors around and fines the polluting companies. But as often as not local government partners just pay the fines, or block regulators from shutting down the polluters, or let the regulators shut them down but then let the companies reopen under a new name. If all else fails, there’s always bribery. MEP officials are regularly bribed to let polluters continue operations. (86)

A year after Xi Jinping launched his “war on pollution,” the official press describes Beijing as “all but unlivable.” A study released in February 2015 declared that living in China’s cities is “as deadly as smoking.” (87) The government’s ambitious plans to improve water quality and safety have likewise failed. The 12th Five-Year Plan goal of “completely solving rural drinking water issues” by the end of 2015 “will not be met, and some villages are going backward because of scarcity and pollution.” Urban water safety has not improved and even bottled water is often contaminated. (88)

Moreover, the center itself is conflicted about enforcing its own pollution regulations because the central government, as much as local governments, needs to maximize growth to meet its plan targets and maintain employment to keep the peace. So while it talks about cracking down on pollution, more often than not Beijing also has to prioritize job creation over environmental protection. (89) Therefore, so long as there is no real separation of powers, these trends can be expected to continue and China’s pollution problems will remain essentially unsolvable.

5. Bureaucratic particularism and competition drive redundancy and overinvestment: SOE bosses, and local, provincial and ministerial officials may not face market competition in the same way and to the same extent as capitalist firms, but they face intense bureaucratic competition for access to resources and appropriations from the center. This particularistic intra-ruling class struggle over access to state funds also shapes the broad pattern of China’s economic development, powering tendencies to redundancy, duplication, irrational investment and waste throughout the economy. Thus, in his book on China’s growing airline industry, James Fallows writes:

Foreign reports often present these projects as carefully coordinated expressions of China’s larger ambitions for a modern transportation system and to an extent they are. But there is also bitter bureaucratic and commercial rivalries between the airline and railroad interests within China, each seizing on any opportunity to argue that it reflected the wiser and more farsighted use of the country’s resources. (90)

In China’s hybrid economic system, generally speaking, officials can only profit from their own units – their localities, ministries and SOEs. Cadres can’t buy shares in SOEs anywhere in the economy like in capitalism. No cadre in Sichuan can invest in and profit off of state-owned industries in Shanghai or Shenzhen. So if Sichuan officials wanted to profit from Premier Wen Jaibao’s call at the launching of the 12th Five-Year Plan, to “enhance China’s automobile manufacturing capability,” their only way to do was to build auto plants in their own province. And that’s what happens. That’s why China has more than 130 auto plants, thousands of power plants (one for every three square kilometers in Jiangsu province), roads and bridges to nowhere, more than 30 airlines, near-empty airports everywhere, more than 800 shipyards, redundant ports, redundant “world financial centers,” redundant shopping malls and ghost cites, with all the waste those entail. These tendencies are, again, built into the bureaucratic collectivist nature of this economic system and will continue as long as this system is in effect.

6. Rampant, ineradicable corruption: Anticorruption campaigns have been a feature of CCP inner-party struggles since long before the founding of the People’s Republic. They reached their apogee of hysteria in Mao Zedong’s terror campaign of the “cultural revolution” against “capitalist roaders” in his own party. These days the party brags that it disciplines tens of thousands of corrupt officials every year. Prominent party and state figures tried and punished in recent years include Beijing Mayor Liu Zhihua who received a suspended death sentence in 2009 for bribery. Shanghai party chief Chen Liangyu got 18 years in 2008 for corruption. Zheng Xiaoyu, head of China’s SFDA, was executed in 2007 for taking bribes to approve an antibiotic blamed for at least 10 deaths. Rixin Kang, former head of China’s nuclear power agency, was sent to prison for life in 2011; Cheng Tonghai, former head of Sinopec, got a suspended death sentence in 2009. Li Peiying, the head of Beijing’s Capital Airport, was executed in August 2009. Railway minister Liu Zhijun was given a suspended death sentence in 2013. Bo Xilai, the first member of the Party’s Politburo to be arrested since the end of the Mao era, was given a suspended death sentence in 2013. In January 2015, 70 SOE bosses were nabbed in one sweep, 16 generals in another.

Yet for all the campaigns, arrests and executions, corruption only grows worse every year. And why would it not? Opportunities for getting rich quick have grown as fast as the economy. And despite all the lurid press reports, the chances of getting caught are miniscule and for most corruption cases the consequences are not nearly as dire as the headlines imply, especially for the most elite, the biggest gangsters. (91)Geremie Barmé of the Australian National University says that in his research, for all the drama, most of the offspring of China’s revolutionary founders, the so-called “second red generation,” whose ranks include Xi Jinping and Bo Xilai, had largely escaped serious punishment: “In the murky corridors of Communist power, an impressive number of party gentry progeny, or the offspring of the Mao-era nomenklatura, have been implicated in corrupt practices … But word has it that, like the well-connected elites of other climes, they’ve enjoyed a ‘soft landing': being discretely relocated, shunted into delicate retirement or quietly ‘redeployed.'” (92)Bo Xilai’s confinement is thought to be not too harsh, and not include orange suits.

Guanxi rules. Xi Jinping’s “war on corruption” is swatting competing tigers like Zhou Yangkang’s clique but has conspicuously failed to swat blatantly corrupt tigers right under his nose, starting with his own sister, brother-in-law, niece and their private sector partners, all of whom have made fortunes trading influence for lucrative state-private deals. Instead, Xi is just pushing them to cash out of their hundreds of millions of dollars in politically vulnerable investments. (93) Novelist Murong Xuecun writes in The New York Times that “the anticorruption push is more of a Stalinist purge than a genuine attempt to clean up the government.” Xi, he says, has mainly targeted specific party factions while those groups that support and pledge loyalty to Xi appear untouched. He notes that in Xi’s former fiefs in Fujian and Zhejian provinces, “as best I can tell not one official above the deputy provincial level has been arrested on suspicion of corruption. Recently the question was raised on the internet: Why have no ‘big tigers’ been found in Fujian and Zhejiang? The message was almost immediately deleted.” (94)

Without the rule of law, an independent judiciary, courts and police to prosecute and punish corrupt cadres, Xi Jinping’s only option is to try to terrorize the cadres by sending down “discipline inspection teams” to punish local transgressors and jail some blatant offenders. The Chinese call it “killing the chickens to scare the monkeys.” But after the terror passes and the teams return to Beijing, it’s back to business as usual. So after wrapping up the second round of two-month inspections in 10 provinces launched in July 2014, Wang Qishan, head of the Central Commission for Discipline Inspection (CCDI) warned officials, “Don’t go back on your old ways when our backs are turned … we will come back and catch you off guard.” (95)

But really, what can the poor CCDI do? The Chinese Communist Party is a cesspool of corruption from top to bottom. The CCDI can’t arrest the entire party. Xi needs these officials to run his economy and administration, but most are well enough connected to avoid his terrorists. Xi can’t trust the police to systematically enforce anticorruption measures because the police themselves are notoriously corrupt. Even his corruption investigators can’t be trusted (1,575 corruption investigators were themselves busted in 2014). By October, Wang was complaining that the cadres were not taking him seriously: “We have stepped up the anti-graft campaign but some party cadres are still undeterred. Some have become even more corrupt.” Wang “vowed to ramp up inspections of the lower tiers of government.” (96) Good luck on that, Mr. Wang.

Pursued with too much vigor, Xi’s anticorruption campaign against senior officials risks not only unsettling elite stability, but also destroying what’s left of the party’s credibility. As a retired princeling military officer said about the most recent campaign against graft and profiteering in the army: “You can’t do it too much, otherwise the party comes out too black, and the leaders won’t like it.” (97) Of course, self-limiting anticorruption campaigns only guarantee that corruption will continue to grow. Moreover, the anti-graft drive is also hurting economic growth as cadres sit on their hands, fearing to do any work that might bring complication, and companies pull back from spending on luxury goods, feasting, champagne and cars – the spending by the 1% that drives so much growth in China, as in the West.

What’s worse is that with the spectacle of China’s political leadership by “communist” princelings-turned-billionaires, corruption rots the whole society from the top down. Whereas in the 1980s, millions of China’s youth were idealistic passionate protesters for democracy, today many of China’s millennial generation have lost all hope for change, been seduced by capitalism and consumerism, become cynical and indifferent toward politics, human rights and the environment, and are insouciant toward CCP lies and repression. Others are just giving up and emigrating.

III. Braking the Drive to Collapse

It goes without saying that the Chinese have every right to modernize, industrialize and improve their material standard of living. But the problem is that capitalism can’t sustainably provide this for the Chinese, the Americans or anyone anymore. As many Chinese say today, “Who cares if we have the world’s highest GDP if we can’t live here?” The Chinese don’t need a higher standard of living based on endless consumerism. They need a better mode of life: clean, unpolluted air, water and soil; safe and nutritious food; comprehensive public health care; safe, quality housing; a public transportation system centered on urban bicycles and public transit instead of cars and ring roads; and more.

We all need to live better by consuming less and consuming rationally, fairly and sustainably. Given the planet’s desperate shape today, the only way humanity is going to survive this century is if developed countries and developing countries contract and converge their resource consumption and pollution around a sustainable global average that will permit the world’s peoples to live in tolerable conditions while reserving resources for future generations and other life forms. (98)

As China Goes, So Goes the World

Climate scientists tell us that, given all the failed promises to date, the backpedaling and soaring carbon dioxide emissions, we now face a “climate emergency.” On present trends we’re on course to a 4 to 6-degree Celsius warming before the end of this century: If we don’t radically suppress fossil fuel burning over the next few decades to keep the warming below the 2-degree Celsius threshold, planetary heating will accelerate beyond any human power to stop it and global ecological collapse will be unavoidable. To have a chance of staying below 2 degrees, the industrialized nations and China must cut carbon emissions by 40 to 70 percent globally by 2050 as compared to 2010, which would require cuts on the order of 6 to 10 percent per year. (99) China would have to cut its industrial emissions by 30 to 90 percent as compared to 2010, the variance depending upon expected growth rates and other assumptions. (100)

The only way China could suppress its greenhouse gas emissions by anything like that amount would be to impose a drastic across-the-board economic contraction, including radical retrenchments and shutdowns of most of the industries that have been built up in the last three decades of market mania. I’m sure this sounds extreme, if not completely crazy. But I don’t see what other conclusion we can draw from the science. On the positive side, as I surveyed above, since so much of China’s resource waste and pollution is just completely unnecessary and harmful, what sounds like extreme austerity could prove just the opposite: liberating, a move to that “better mode of life.” Such an emergency plan would have to include at least the following elements:

  • Shut down all but critically essential coal-fired power plants needed as a temporary measure to keep the lights and heat on and essential public services in operation until renewable replacements can be brought on line. Abandon the coal gasification projects and phase out oil- and gas-powered fuel plants as quickly as possible. Force a rapid transition of energy generation to renewable wind, water and solar energy sources but with the goal of producing much less electricity overall, closer to what China produced in the early 1980s before the market-driven industrialization boom. The US and other developed countries should be obliged to provide extensive technical and material assistance to facilitate this transition.
  • Shut down most of the auto industry. This industry is just a total waste of resources and is the second-biggest contributor to global warming. Most public transportation will have to shift back to bicycles, buses, trains and subways – basically a modernized and expanded version of what the Chinese had in the early 1980s before the auto craze. But the air will be cleaner, transportation will be faster, people will be healthier and immense resources will be conserved.
  • Shut down most of the coastal export industries. Most of China’s coastal export industries are geared to producing unsustainable, disposable products, as noted above. There is just no way to have a sustainable economy in China or anywhere if we don’t abolish the throwaway repetitive-consumption industries in China and around the world.
  • Retrench or close down aviation, shipping, and other redundant and unsustainable transportation industries. Abandon the “aviation superpower” boondoggle. Abandon further expansion of the high-speed train network. China has already built more planes, trains and subways than it needs by any rational accounting of needs. Same with the shipbuilding industry, most of which is geared to container and bulk carrier shipping. This industry needs to be drastically reduced as China’s imports and exports decline with industrial contraction.
  • Shut down most of the construction industry. Even with China’s huge population, the country is massively overbuilt and littered with useless, superfluous buildings, housing, highways, bridges, airports and so on. Some of this can be repurposed. Some should be demolished and the lands returned to farmlands, wetlands, parks or other beneficial use.
  • Abandon the urbanization drive and actively promote re-ruralization.Urban life has its advantages but urban residents consume several times the energy and natural resources and generate several times as much pollution as rural farm families. Besides, most of the tens of millions of Chinese who were relocated to the cities in the last three decades did not go voluntarily; they were forced off their farms by land-grabbing, profiteering local officials. Those ex-farmers who wish to return to the land should be permitted to do so. There is no law of nature that says farm families must be impoverished. In today’s world, family farmers with adequate land and decent technology, who can market their own produce so they don’t get ripped off by middlemen, and who are not under the thumb of banks, landlords or state-landlords, can do very well. (101) China’s farmers are poor because the state has been squeezing them to subsidize industrialization. The best way to raise rural living standards is to give them security in their farms and pay them fair prices for their produce.
  • Abandon the imperial plunder and Han colonization of the West.Xinjiang, Tibet and Mongolia are not ethnically Chinese. If the Chinese government abandons its market-based development strategy it would have no “need” to plunder the natural resources of the West; those peoples can be left in peace to develop at their own pace and in accordance with their ecological limits. And after wrecking so much of their environment, the Chinese owe them some help.
  • Launch an emergency national plan for environmental remediation and restoration of public health. Chinese environmental and health experts have called for a comprehensive integrated plan to address the nation’s environmental and public health issues. (102) Experts say it could take generations to restore China’s farmlands, rivers and lakes to tolerable biological health though, as noted above, in places this may be impossible. A significant share of the costs of this remediation should also be borne by the Western nations whose companies callously contributed to this pollution by offshoring their dirtiest industries to China.
  • Launch a national public works jobs program. If China is going to have to shut down so much of its industrial economy to brake the drive to ecological collapse, then it is going to have to find or create new jobs for all those displaced workers. In Guangdong Province alone, there are something like 40 million manufacturing workers, most of them dedicated to producing the sorts of needless products described above. Forty million unemployed workers would be a big problem. And that’s just Guangdong. But unbreathable air, undrinkable water, unsafe food, polluted farmland, epidemic cancer, rising temperatures and rising seas along coastal China are bigger problems. So there’s just no way around this very inconvenient truth. Making bad stuff has to stop; stopping it will unemploy vast numbers of workers, and other, non-destructive, low-carbon jobs have to be found or created for them. Fortunately, in China, there is no shortage of other socially and environmentally useful work to do: environmental remediation, reforestation, transitioning to organic farming, transitioning to renewable energy, rebuilding and expanding public social services, rebuilding the social safety net, especially for China’s aging population, and much else.

Pan Yue was certainly prescient: The Chinese miracle has come to an end because the environment can no longer keep pace. The question is, can the Chinese find a way to grab hold of the brakes and wrench this locomotive of destruction to a halt before it hurls the country off the cliff?

Revolution or Collapse?

One thing is certain: This locomotive is not going to be stopped so long as the Communist Party has its grip on the controls. The Chinese Communist Party is locked in a death spiral. It can’t rein in corruption because the party is built on corruption, thrives on corruption and can’t police itself. It can’t rein in ravenous resource consumption and suicidal pollution because, given its dependence on the market to generate new jobs, it has to prioritize growth over the environment like capitalist governments everywhere.

It can’t even discipline its own subordinate officials to enforce and obey the government’s environmental, food and drug safety, building codes and similar laws because in this system subordinate officials aren’t necessarily subordinate and can often mobilize their family and guanxi-based backers to defend their interests and thwart Beijing. So long as this basic structural class/property arrangement remains in effect, no top-down “war on pollution” or “war on corruption” is going to change this system or brake China’s trajectory to ecological collapse. Given the foregoing, I just don’t see how China’s spiral to collapse can be reversed short of social revolution.

China’s Communist Party seems all-powerful and unassailable. But it’s not. It’s frightened, desperate and disintegrating. It faces unprecedented threats: near daily industrial strikes; militant and often violent protests over land grabs, chemical plants, incinerators, power plants and the like; “terrorist” attacks from Xinjiang; and even worse, subversive thought that just can’t be stopped by the Great Firewall. Chai Jing’s Under the Dome had 300 million downloads before the government took it down off the web after a week and a half. Who knows what spark will light the next social explosion?

Resistance is growing as pollution and public health worsen, as it becomes harder to sustain that 8 percent growth rate to stave off unrest, as Xi Jinping’s war on corruption only serves to publicize the unregenerate character of the entire Communist Party and underscore its incapacity to solve any of China’s huge problems. Since Xi took over in 2012, he’s been determined to save China’s Communist Party from the fate of its Soviet cousin. Xi ridiculed Mikhail Gorbachev’s “weakness” and cast himself as the tough-guy Godfather, cracking down on the press, the internet and social media, religious groups, democrats, nongovernmental organizations, Western joint-venture partners and “Western ideas.” But this repression just reveals his weakness, not his strength.

The more he harasses, fines and drives Western joint-venture partners out of China, the less access he will have to their technology and the less competitive his SOEs will become. The more tightly he polices culture and censors the internet, the faster China’s intellectuals, scientists, professionals and college graduates will pack up and move to Australia. Nothing demonstrates this weakness and lack of self-confidence more than the Party’s very public disintegration: The government bitterly complains that large numbers of “ready-to-flee, naked officials” (so-called because they’ve sent their families and money to Los Angeles or Vancouver) are scheming to follow them. Surveys show that half of China’s rich (most of whom are Communist Party members) have either left the country or are planning to do so as soon as they can. (103)

China has to be the first nation in history in which significant numbers of its own triumphant ruling class are abandoning their own success story en masse. Today, Xi Jinping faces subversion and resistance everywhere he looks, yet he can’t even count on his comrades. To add to his headaches, Godfather Xi now faces an in-your-face democracy movement in Hong Kong that refuses to die. From workers’ strikes to environmental protests to Occupy Central for Love and Peace, these struggles and movements are fragmented, inchoate and unorganized, so far, but they all share a common demand: bottom-up democracy. Therein lies China’s best hope.

Footnotes

1. Ariana Enjung Cha, “Solar energy firms leave waste behind in China,” The Washington Post, 9 March 2008. All quotations are from this article.

2. There’s no better illustration of this government-industry collusion and pollution’s catastrophic impact on the health of China’s people than journalist Chai Jing’s sensational new documentary on China’s smog Under the Dome – Investigating China’s Smog (Wumai diaocha: qiongding zhixia) which went online in late February and is being rightly hailed as China’s Silent Springhttps://www.youtube.com/watch?v=T6X2uwlQGQM.

3. “The Chinese miracle will end soon,” Der Spiegel 7 March 2005: www.spiegel.de/speigel/0,1515,345694.html.

4. Elizabeth Economy and Michael Levi, By All Means Necessary, Oxford 2014, chapters 3 and 4.

5. Craig Simons, The Devouring Dragon, New York, 2013, p. 9 and chapters 7 and 8.

6. Joseph Kahn and Mark Landler, “China grabs west’s smoke-spewing factories,” The New York Times, 21 December 2007. William J. Kelly and Chip Jacobs, The People’s Republic of Chemicals (Los Angeles: Vireo 2014).

7. Alexandra Harney, The China Price, New York, 2008, pp. 8-9.

8.Overdressed, New York, 2013, pp. 3, 124-125. Energy consumption: FAO, cited in “Fabric and your carbon footprint, O Ecotextiles, 10 March 2013, at http://oecotextiles.wordpress.com/2013/10/03/fabric-and-your-carbon-footprint/.

9. Niu Yue, “China No 1 dumper of plastic into ocean,” China Daily, February 19, 2015.

10.State Council Decision on Accelerating the Development of Strategic Emerging Industries, October 2010 at http://www.gov.cn/zwgk/2010-10/18/content_1724848.htm.
State Council 12th Five-Year Plan (FYP) on Development of Strategic Emerging Industries, July 2012 at http://www.gov.cn/zwgk/2012-07/20/content_2187770.htm.
MOF and NDRC Interim Measures for the Administration of Special Funds for Strategic Emerging Industries, December 2012 at http://jjs.mof.gov.cn/zhengwuxinxi/zhengcefagui/201301/t20130124_729883.html.

11. Tom Lasseter, “Empty highways,” McClatchy News, August 24, 2006, 11:33PM at http://blogs.mcclatchydc.com/china/2006/08/empty_highways.html.

12. Professor Zhao Jian of Beijing Jiaotong University says, “It is unwise to continue building high-speed rail lines while the current high-speed network has a hard time getting enough passengers and is operating at a loss … The country has built more than 10,000 kilometers of high-speed rail lines and most lines are losing money because of inadequate demand.” Some lines run at only 30 percent of capacity he said, and even the busiest, such as the train from Beijing to Shanghai, “will run a loss for a long time … The rush to build high-speed rail networks indicates that the old investment-driven growth model has hardly changed.” Sun Wenjing, “Government throwing money away on bullet trains, expert says,” Caixin, 10 July 2014 at http://english.caixin.com/2014-07-10/100702343.html.

13. Kevin Lim, “‘Meaningful probability’ of a China hard landing: Roubini,” Reuters, 13 June 2011.

14. Wang is quoted in Tania Branigan, “Riding Beijing’s subway end to end: 88km of queues and crushes on 20p ticket,” The Guardian, 10 September, 2014 at http://www.theguardian.com/cities/2014/sep/10/-sp-beijing-subway-china-metro-queues-ticket-investment.

15. James Fallows, China Airborne, New York, 2012, pp. 28-29. David Barboza, “Airports in China hew to an unswerving flight path,” The New York Times, 3 April 2013. Bloomberg News, “China plan seeks to bolster airports, locally-produced airplanes,” 21 January 2013 at http://www.bloomberg.com/news/2013-01-21/china-plan-seeks-to-bolster-airports-locally-produced-airplanes.html.

16. IPCC, Aviation and the Global Atmosphere: A Special Report of the Intergovernmental Panel on Climate Change, Cambridge UK 1999, at http://www.grida.no/climate/ipcc/aviation/index.htm. George Monbiot, Heat, Cambridge UK 2007, p. 174.

17. Monbiot, Heat, p. 182 and sources cited therein.

18. In the decade from 2000 China’s cities expanded by over 80 percent. A national land survey found that 130,000 square kilometers of farmland, equal to half the area of Germany, was paved over in the urbanization frenzy between 1996 and 2009 – and it hasn’t slowed since. Mandy Zuo, “Stop concreting over prime farmland, China’s big cities told,” South China Morning Post, 9 November, 2014. Cui Zheng, “Scientists issue warning over development of coastal wetlands,” Caixin, 25 November 2014.

19. See Jasper Becker, City of Heavenly Tranquility, Oxford 2008, chapters 17 and 18.

20. See Darmon Richter, “Welcome to Ordos: the world’s largest ‘ghost city’ [China],” The Bohemian Blog, 13 February 2014 at: http://www.thebohemianblog.com/2014/02/welcome-to-ordos-world-largest-ghost-city-china.html.

21. “Housing oversupply causing major crisis for Chinese economy, NTD.TV, 16 May 2014 at http://www.ntd.tv/en/programs/news-politics/china-forbidden-news/20140516/143998-housing-oversupply-causing-major-crisis-for-chinese-economy-.html. Eg. George Steinmetz, “Let a hundred McMansions bloom,” The New York Times Magazine, 21 September 2014. Neil Gough, “A muddy tract now, but by 2020, China’s answer to Wall Street,” The New York Times, 3 April, 2014.

22. Lillian Liu, “A question of time, FinanceAsia, 8 September 2010 at http://www.financeasia.com/News/231364. Vincent Fernando, CFA, “There are now enough vacant properties in China to house over half of America,” Business Insider, 8 September 2010 at http://www.businessinsider.com/there-are-now-enough-vacant-properties-in-china-to-house-over-half-of-america-2010-9. Robin Banerji and Patrick Jackson, “China’s ghost towns and phantom malls,” BBC News Online, 13 August 2012 at http://www.bbc.com/news/magazine-19049254. Yifei Chen, “Chasing ghosts: where is China’s next wave of empty ‘new towns’?” South China Morning Post, February 13, 2015.

23. “China’s real estate bubble,” CBS 60 Minutes, 11 August 2013 at http://www.cbsnews.com/videos/chinas-real-estate-bubble/. Gus Lubin, “Satellite pictures of the empty Chinese cities where home prices are crashing,” Business Insider, 10 December 2011, 1:48PM at http://www.businessinsider.com/china-ghost-cities-2011-11#. David Barboza, “Chinese city has many buildings but few people,” The New York Times, 9 October 2010.

24. Zarathustra, “China’s crumbing infrastructure model,” Macrobusiness, 28 July 2012 at 9:49AM at http://www.macrobusiness.com.au/2011/07/is-chinas-growth-model-a-train-wreck/.Wall Street Examiner reporter/blogger Russ Winter posted several photos of collapsed bridges in his “Yes, China is truly different” Winter Economic and Market Watch, 28 August 2012 at http://www.wallstreetexaminer.com/blogs/winter/?p=5290.

25. Lu Chen, op. cit. After the collapse of an apartment in Fenhua, Zhejian Province in April 2014, officials warned of a “coming wave of such accidents as the ‘fast food’ buildings built in the 1980s and 1990s enter their 30s and 20s.” Building safety experts warned people not to purchase apartments in certain localities known to be particularly risky. Most “won’t last 50 years, or in some cases about 25 years,” and they present constant safety hazards. Zheng Fengtian, “Weak buildings threaten life,” China Daily, 11-14 April 2014.

26. Frank Langfitt, “Chinese blame failing bridges on corruption,” National Public Radio, 29 August 2012 at http://www.npr.org/2012/08/29/160231137/chinese-blame-failed-infrastructure-on-corruption.

27. US E.I.A., China, updated 4 February 2014 at http://www.eia.gov/co.

28. Lily Kuo, “China’s nightmare scenario: by 2025 air quality could be much much worse,” posted 12 March 2013 on Quartz at http://qz.com/61694/chinas-nightmare-scenario-by-2025-air-quality-could-be-much-much-worse/. Wang Yue, “China unlikely to reduce coal use in the next decade,” Chinadialogue.org, 10 February 2014 at https://www.chinadialogue.net/blog/6718-China-unlikely-to-reduce-coal-use-in-the-next-decade/esn. US EIA, China, 4 February 2014, op cit.

29. Zeke Hausfather, “Global carbon dioxide emissions: increases dwarf US reductions,” Yale Forum on Climate Change & the Media, 2 July 2013 at http://www.yaleclimateconnections.org/2013/07/global-co2-emissions-increases-dwarf-recent-u-s-reductions/.

30. Chris Buckley, “China’s plan to limit coal use could spur consumption for years,” The New York Times, 25 July 2014. As Xi Jinping and Barack Obama concluded their “historic” accord in November 2014 to cut both country’s carbon dioxide emissions and Xi promised to reduce China’s reliance on coal for power generation and boost renewables, the news that China’s coal consumption actually fell by 2.5 percent in 2014, the first decline in a century, gave cause for optimism. Combined with the fact that China continues to lead the world in annual additions of wind and solar power, many hoped that China’s coal consumption was finally peaking. But as Andrew Revkin points out, while China’s coal production and imports declined in 2014, half of China’s coal is used outside the power sector, in heavy industry, which use has fallen as the overall economy has slowed in recent years. Coal consumption in the power sector continues its relentless climb: In 2014, China’s newly added coal power capacity exceeded new solar energy by 17 times, new wind energy by four times, even new hydro power by more than three times. In just this one year, China added more new coal-fired power plants than Britain’s entire fleet. These new plants will be pumping out greenhouse gases for many decades to come and in fact, most of China’s coal-fired power plants are less than 15 years old so could they could still be running half a century from now. In short, for all the promises, coal is still king in China. Moreover, the economic slowdown is also likely to be short-lived as the government is furiously pumping money into the economy to revive growth. Andrew Revkin, “A look behind the headlines on China’s coal trends,” Dot Earth, The New York Times, 18 February 2015: 6:00 PM at http://dotearth.blogs.nytimes.com/2015/02/18/a-look-behind-the-headlines-on-chinas-coal-trends/?_r=0.

31. William J. Kelly, “China’s plan to clean up air in cities will doom the climate, scientists say,” InsideClimate News, 13 February 2014 at http://insideclimatenews.org/news/20140213/chinas-plan-clean-air-cities-will-doom-climate-scientists-say.

32.Reuters, “China’s coal expansion may spark water crisis, warns Greenpeace,” The Guardian, 15 August 2012. See also the accompanying documentary photos by Lu Guang: “China’s mega coal power bases exacerbate water crisis – in pictures,” The Guardian, August 21, 2012 at http://www.theguardian.com/environment/gallery/2012/aug/21/china-mega-coal-water-crisis-in-pictures.

33. See Sophie Beach, “China’s fracking boom and the fate of the planet” in China Digital Times 19 September 2014 at http://chinadigitaltimes.net/2014/09/chinas-fracking-boom-fate-planet/.

34. Investigators have found that only a third of China’s wastewater treatment plants are operating. Cui Zheng, “Seas of sewage,” CaixinOnline, 12 October 2012 at http://english.caixin.com/2012-10-12/100446374.html.

35. Ma Jun, China’s Water Crisis, Norwalk 2004, p. vii.

36. Sun Xiaohua, “Pollution takes heavy toll on Yangtze,” China Daily, 16 April 2007.  Shai, Oster, “It may be too late for China to save the Yangtze goddess,” The Wall Street Journal, 6 December 2006.

37. Xu Nan, “Poisoned groundwater sparks media storm in China,” China Dialogue, February 2, 2013 at https://www.chinadialogue.net/blog/5749-Poisoned-groundwater-sparks-media-storm-in-China/en.

38. Cecilia Torajada and Asit K. Biswas, “The problem of water management,” China Daily, March 5, 2013. Gong Jing and Liu Hongqiao, “Half of China’s urban drinking water fails to meet standards,” China Dialogue, June 6, 2013 at https://www.chinadialogue.net/article/show/single/en/6074-Half-of-China-s-urban-drinking-water-fails-to-meet-standards.

39. Ten years previously, a pollution tide had killed fish and sickened thousands of people. By 2001, the government claimed to have shut down polluters and declared the cleanup a success. But the Huai is now a symbol of the failure of environmental regulation in China. After spending more than $8 billion over a decade to clean up the Huai basin, the State Environmental Protection Administration concluded in 2004 that “some areas were more polluted than before.” Jim Yardley, “Rivers run black, and Chinese die of cancer,” The New York Times, 12 September 2004. An Baijie, “Polluted river flows with carcinogens,” China Daily, 8 August 2013 (on pollution of the Huaihe in Anhui Province by manganese, nitrates and other carcinogens from local factories).

40. Dr. Linda Greer (NRDC), “Top clothing brands linked to water pollution scandal in China,” China Dialogue, 9 October 2012 at https://www.chinadialogue.net/blog/5203-Top-clothing-brands-linked-to-water-pollution-scandal-in-China/en. (Armani, Calvin Klein, Marks and Spencer, Zara and others.)

41. Xue Haitao and Liku Hongqiao, “Sip of death plagues cancerous river villages,” CaixinOnline, 9 October 2013 at http://english.caixin.com/2013-10-09/100589447.html. Yu Dawei et al., “The poisoning of the Nanpan river basin,” CaixinOnline, 1 September 2011 at http://english.caixin.com/2011-09-01/100297332.html.  Sophie Beach “Shangba, China’s village of death,” posted 3 December 2007 on www.sprol.com/?p=371. Mary Ann Toy, “Waiting for death in fetid cancer villages,” Sidney Morning Herald, 26 May 2007. Jim Yardley, “Rivers run black, and Chinese die of cancer,” The New York Times 12 September 2004. Staff, “South China river polluted by thallium, cadmium,” China Daily, 6 July 2013. Elizabeth Economy, The River Runs Black.

42. Michael Wines, “Smelter in China poisons more than 1,300 children” The New York Times, 21 August 2009. Staff, “Anhui battery factory poisons 200 children,” Caixin slide show, 6 January 2011 at http://english.caixin.com/2011-01-06/100214424.html.

43. Luna Lin, “China’s water pollution will be more difficult to fix than its dirty air,” China Dialogue, 17 February 2014 at https://www.chinadialogue.net/blog/6726-China-s-water-pollution-will-be-more-difficult-to-fix-than-its-dirty-air-/en. Zhang Chun, “China ‘lacks experience’ to clean up its polluted soil,” China Dialogue, 14 April 2014 at https://www.chinadialogue.net/article/show/single/en/6897-China-lacks-experience-to-clean-up-its-polluted-soil.

44. Matt Currell, “Losing lifeblood in north China,” China Dialogue, September 17, 2010 at https://www.chinadialogue.net/article/show/single/en/3823-Losing-lifeblood-in-north-China.

45. Economy, “The great leap backwards,” Foreign Affairs, September-October 2007.

46.Reuters in Beijing, “China says more than 3m hectares of land too polluted to farm,” South China Morning Post, 30 December 2013.

47. Ministry of Environmental Protection, Huanjing baohu bu he guotu ziyuan bu fabu quanguo turang wuran zhuangkuang diaocha gongbao (Environmental Protection Ministry and Land and Natural Resources Ministry release countrywide soil contamination condition survey bulletin), 17 April 2014 at http://www.mep.gov.cn/gkml/hbb/qt/201404/t20140417_270670.htm.

48. See Sam Geal and Elizabeth Hilton, “Culture of secrecy behind China’s pollution crisis,” and Angel Hsu and Andrew Moffat, ” China’s soil pollution crisis still buried in mystery,” both in Pollution and Health in China: Confronting the Human Crisis, special issue of China Dialogue, 9 September 2014 at https://s3.amazonaws.com/cd.live/uploads/content/file_en/7289/chinadialogue_health_journal.pdf.

49.Xinhua, “More than 40 percent of China’s arable land degraded,” China Daily, 5 November 2014.

50. Liu Hongqiao, “The polluted legacy of China’s largest rice-growing province,” China Dialogue, 30 May 2014 at https://www.chinadialogue.net/article/show/single/en/7008-The-polluted-legacy-of-China-s-largest-rice-growing-province. Zheng Yesheng and Qian Yihong, Shendu Youhuan  –  Dangdai Zhongguo de Kechixu Fazahan Wenti (Grave Concerns: Problems of Sustainable Development for China) (Beijing: China Publishing House 1998), pp. 8-10.

51. John Dearing, “China’s polluted soil and water will drive up world food prices,” China Dialogue, 3 March 2015 at https://www.chinadialogue.net/article/show/single/en/7768-China-s-polluted-soil-and-water-will-drive-up-world-food-prices.

52. For example, antebellum southern planters produced cotton, tobacco, sugar and indigo entirely for market, indeed for the world market. But they did so with slave labor. This hybrid capitalist-slave mode of production was obviously radically different than production for a market based on free labor in the North and it had broad implications for productivity, economic development, and more. It gave their economy an entirely different character, dynamic and trajectory, and it had profound economic, social, political and psychological consequences, many of which we still deal with today.

53. James McGregor, No Ancient Wisdom, No Followers: the Challenges of Chinese Authoritarian Capitalism (Westport: Prospecta Press: 2012), p. 4-5, 16-19 (quote from p. 57) and the sources cited therein, including the head of the State-owned Assets Supervision and Administration Commission (SASAC).

54.No Ancient Wisdom, p. 2

55. Andrew Szamosszegi and Cole Kyle, “An Analysis of State-owned Enterprises and State Capitalism in China,” October 26, 2011. US-China Economic and Security Review Commission (USCC), pp. 21-22 at http://origin.www.uscc.gov/sites/default/files/Research/10_26_11_CapitalTradeSOEStudy.pdf.On state control of the banking sector, see Carl E. Walter and Fraser J.T. Howie, Red Capitalism: The Fragile Foundations of China’s Extraordinary Rise (Singapore: Wiley & Sons, 2012), pp. 31-33 and passim. Also: Henry Sanderson and Michael Forsythe, China’s Superbank (Singapore: Wiley & Sons, 2013). Barry Naughton, The Chinese Economy: Transitions and Growth (Cambridge: MIT 2007), pp. 190, 299-304, 325.

56. Thus with respect to the banking sector, Szamosszegi and Cole write that: “The state banking sector dominates the landscape in China and tends to favor SOEs at the expense of private sector firms. Second, SOEs are in general an important instrument of government policy. The government uses SOEs to facilitate structural change in the Chinese economy, to acquire technology from foreign firms, and to secure raw material sources from beyond China’s borders. For example, in 2009, the government turned to its SOEs and state‐owned banks to provide stimulus to the domestic economy. Third, the CCP and SASAC maintain important influence over the executives of SOEs. These executives face two sets of incentives. On the one hand, the entities they control are supposed to be profitable, and SOE executives are now rewarded based on financial performance. On the other hand, the appointments of top executives to SOE management and their future career paths upon leaving the SOE are determined by the Central Organization Department of the CCP. Thus, SOE executives have an incentive to follow the government’s policy guidance. Recent examples, as well as financial disclosure documents, indicate that if maximizing shareholder value conflicts with state goals, SOEs and their wholly owned subsidiaries are likely to pursue the goals of the state.” “An Analysis of State-owned Enterprises” op.cit. p. 3.

57. McGregor, No Ancient Wisdom, p. 59.

58. Walter and Howie, Red Capitalism, p. 24, 187.

59. Ben Blanchard, “Chinese billionaire mining tycoon Liu Han is executed over his links to a ‘mafia-style’ gang,” Sydney Morning Herald, 9 February 2015. Most accounts say that his real crime was his link to the Zhou Yongkang clique.

60. Becker, City of Heavenly Tranquility, pp. 287-289.

61. Sydney University’s Kerry Brown says the number of “high-level cadres” (gaoji ganbu) who run the ministries, the state conglomerates and the administration, all concentrated in Beijing, total no more than 2,562, which means, he says, that China is effectively “run by group of people that is smaller than most villages in Europe.” The New Emperors: Power and the Princelings in China, New York 2014, pp. 20-21.

62. Richard McGregor, The Party, New York 2010. Carl E. Walter and Fraser J.T. Howie, Red Capitalism, Singapore 2012, pp. 22-25 and passim.

63. Eg. Shi Jiangtao, “Struggle for supremacy by party factions now on display,” South China Morning Post, 13 October 2012. Matthew Robertson, “China’s ‘hatchet man’ set to be purged in party struggle,” Epoch Times, 30 May-3 June 2014 (reporting a rumored threat to Xi Jinping’s life by the Bo Xilai faction). Teddy Ng, “Rising star Li Yuanchao forges ties with all political factions in China, South China Morning Post,1 October 2012.

64. Quoted in Bloomberg News, “Xi Jinping millionaire relations reveal fortunes of elite,” 29 June 2012.

65. Quoted in David Barboza, “The Corruptibles,” The New York Times, 3 September 2009. See also again, Robertson, “China’s ‘Hatchet Man’ set to be purged … ” in op cit.

66. Outgoing Premier Wen Jiabao, incoming Premier Xi Jinping, and other wealthy princelings were profiled in Bloomberg News and The New York Times, in 2012 and 2013 – which got both papers shut down in China and their reporters denied visa renewals in 2013. See “Heirs of Mao’s comrades rise as new capitalist nobility” and links to related stories in Bloomberg News, 26 December 2012 at http://www.bloomberg.com/news/2012-12-26/immortals-beget-china-capitalism-from-citic-to-godfather-of-golf.html. Also again Richard McGregor, The Party and Kerry Brown, The New Emperors.

67. David Barboza, “Billions in hidden riches for family of Chinese leader,” The New York Times, 25 October, 2012.

68.Zhongguode xianjing (China’s Pitfalls) (Hong Kong: Mingjing chubanshe, 1997)

69. “Heirs of Mao’s comrades rise as new capitalist nobility,” op cit. p. 11.

70. Ex-Premier Zhu Rongji, quoted in Richard McGregor, The Party, p. 45.

71. Quoted in Walter and Howie, Red Capitalism, p. 23. In October 2014, one high-level cadre in the energy ministry caught up in Xi Jinping’s anticorruption sweep, had stashed away 200 million yuan (HK$252 million) in banknotes in one of his apartments. The pile of banknotes weighed more than 2.3 tons.

72. Quoted in Richard McGregor, The Party, pp. 140-41.

73. “Heirs of Mao’s comrades rise as new capitalist nobility,” Bloomberg News, 26 December 2012 p. 3 at
http://www.bloomberg.com/news/2012-12-26/immortals-beget-china-capitalism-from-citic-to-godfather-of-golf.html. Further citations below are from articles in this collection.

74. Yang Dali and Dai Qing were quoted in Bloomberg News, “Heirs” op cit. pp. 5,6 and 10.

75.Bloomberg News, “Heirs,” pp. 1,5.

76. Chinese fly cash to North America, by the suitcase,” The Wall Street Journal, 2 January 2013. Shen Ming, “Chinese military officers secretly moving money offshore,” Epoch Times, 28 June 2012. Benjamin Robertson, “US1.25 trillion moved out of mainland China illegally in 10 years, says report,” South China Morning Press, 16 December 2014.

77. James Ball and Guardian US Interactive Team, “China’s princelings storing riches in Caribbean offshore haven,” The Guardian, 21 January 2014, reporting on the findings of a two-year reporting effort by the International Consortium of Investigative Journalists (ICIJ). Bloomberg News, “Heirs” p. 6.

78. “China murder suspect’s sisters ran $126 million empire,” Bloomberg News, 13 April 2012.

79. On SOE restructuring and growth of the planned economy, see Peter Nolan, Transforming China: Globalization, Transition and Development, London 2004, chapter 5.

80. James T. Areddy and Laurie Burkitt, “Shake-up at China firm shows reach of graft crackdown,” The Wall Street Journal, 23 April 2014.

81. So for example, with respect to China’s investment in mines in Zambia, Professor Ching Kwan Lee quotes a Chinese mining executive who says “We don’t need to maximize profit, but we need to make some profit. The state won’t support us if we make losses year after year.” Lee adds, “between profit optimization and profit maximization lies the space for achieving other types of return – political influence and access to raw materials.”  “The spectre of global China,” New Left Review 2/89, September-October 2014, p. 36.

82. Thus James McGregor writes: “Despite their chronically imprudent lending habits, SOE banks are kept afloat – and reap huge profits to boot – through government-set interest rates. With a ceiling on the interest rates for deposits and a floor on lending rates, China’s banks have enjoyed a comfortable spread of about three percentage points, which guarantees profits.” No Ancient Wisdom, p. 65.

83. Long Youngtu, China’s chief negotiator at the WTO, quoted in James McGregor, No Ancient Wisdom, p. 5 (my italics).

84. Liu Jianqiang, “China’s environment ministry an “utter disappointment,” China Dialogue, March 7, 2013 at https://www.chinadialogue.net/article/show/single/en/5788-China-s-environment-ministry-an-utter-disappointment-.  Tang Hao, “China’s food scares show the system is bust,” China Dialogue, 31 August 2012, at https://www.chinadialogue.net/article/show/single/en/5142-China-s-food-scares-show-the-system-is-bust.

85. See Brian Tilt, The Struggle for Sustainability in Rural China, New York 2010, chapter 6. Han Wei, “Officials failing to stop textile factories dumping waste in Qiantang River,” China Dialogue, 1 August 2013 at https://www.chinadialogue.net/article/show/single/en/5589-Officials-failing-to-stop-textile-factories-dumping-waste-in-Qiantang-River.

86. Liu Qin, “China’s environment ministry launches anti-graft reforms,” China Dialogue, 11 March, 2015.

87. John McGarrity, “One year on after “war” declared on pollution, Beijing air scarcely improves,” China Dialogue, 2 February 2015. https://www.chinadialogue.net/blog/7695-One-year-on-after-war-declared-on-pollution-Beijing-air-scarcely-improves/en. Xu Nan, “China’s noxious air ‘as deadly as smoking: study,” China Dialogue, 4 February 2015 at https://www.chinadialogue.net/blog/7697-China-s-noxious-air-as-deadly-as-smoking-study/en.

88. Lu Hongqiao, “China set to miss safe rural drinking water targets,” China Dialogue, March 5, 2015 at https://www.chinadialogue.net/article/show/single/en/7762-China-set-to-miss-safe-rural-drinking-water-targets. Huang Hao, “Village water supplies in China hit by scarcity and contamination,” China Dialogue, March 5, 2014 at https://www.chinadialogue.net/article/show/single/en/7209-Village-water-supplies-in-China-hit-by-scarcity-and-contamination. Abigail Barnes, “China’s bottled water: the next health crisis? China Dialogue, July 22, 2014 at https://www.chinadialogue.net/article/show/single/en/7152-China-s-bottled-water-the-next-health-crisis-.

89. Judith Shapiro writes that “There are competing and conflicting emphases on growth, government legitimacy, clean development, and stability, creating a confusing policy-making landscape in which actors sometimes work at cross purposes or with uncertain lines of responsibility … Economic realities and concerns about unemployment and social unrest often push the government away from environmentally friendly action. The Ministry of Environmental Protection is hardly in a position to close the enormous state-run iron and steel plants in the great north-eastern rust belt, where unemployment is exceedingly high and shutdowns would mean even more job losses.” Shapiro, China’s Environmental Challenges, Cambridge UK 2012, pp. 69-70.

90.China Airborne, p. 99.

91. China’s Communist Party currently counts around more than 85 million members. Last year, the government reported that more than 71,000 cadres were “investigated for violating Party regulations.” Of these only 23,000 “received Party or administrative penalities,” mostly censures, and comparatively few were actually sent to prison or are executed. Pretty good odds. “Disciplinary watchdogs seek to fight factionalism within the Party,” People’s Daily, 12 January 2015 at http://en.people.cn/n/2015/0112/c90785-8834538.html.

92. Barmé is quoted in Andrew Jacobs, “In China’s antigraft campaign, small victories and bigger doubts,” The New York Times, 16 January 2015.

93. Michael Forsythe, “As China’s leader fights graft, his relatives shed assets,” The New York Times, 17 June 2014.

94. “China’s selective crackdown,” 17 January 2015.

95. Alice Yan, “Don’t go back on your old ways when our backs are turned, CCDI warns cadres,” South China Morning Post, 5 November 2014.

96. Andrea Chen, “Some cadres shrugging off anticorruption campaign, graft-buster warns,” South China Morning Post, 25 October 2014.

97. Jane Perlez, “Corruption in military poses a test for China,” The New York Times, 14 November 2012.

98. On this see my “Capitalism and the destruction of life on earth: six theses on saving the humans” Real-world Economics Review, July 2013 at http://www.paecon.net/PAEReview/issue64/Smith64.pdf and my “Climate crisis, the deindustrialization imperative, and the jobs vs. environment dilemma” in Truthout, 17 November, 2014 at http://www.truth-out.org/news/item/27226-climate-crisis-the-deindustrialization-imperative-and-the-jobs-vs-environment-dilemma.

99. IPCC, Climate Change 2014: IPCC Fifth Assessment Synthesis Report (November 2014) at http://www.ipcc.ch/report/ar5/syr/. James Hansen, Storms of My Grandchildren, New York 2009.

100. Ecofys, WWF Report 2015, It’s Time to peak: why China’s corporate sector needs to set ambitious greenhouse gas reduction targets,” (WWF, February 2015) p. 11 at http://www.ecofys.com/files/files/wwf-ecofys-2015-it-is-time-to-peak.pdf.

101. Eg. Chrystia Freeland, “The triumph of the family farm,” The Atlantic, 13 June 2012. Also: “Rebuilding America’s Economy with Family Farm-centered food systems,” n.a., Farm Aid, 2013 at http://www.farmaid.org/makethecase. Alan Bjerga, “Organic lets family farms prosper in industrial-agriculture era,” Bloomberg News, 28 June 2012 at http://www.bloomberg.com/news/2012-06-28/organic-lets-family-farms-prosper-in-industrial-agriculture-era.html.

102. Eg. He Guangwei, “China faces long battle to clean up its polluted soil,” He Guangwei, “The victims of China’s soil pollution crisis, Chu Han, “The human cost of living in the ‘mercury capital’ of China [Guizhou province],” Angel Hu and Andrew Moffet, “China’s soil pollution crisis still buried in mystery,” all in Pollution and Health in China: Confronting the Human Crisis, special issue of China Dialogue, September 9, 2014 (in Chinese with some English summaries) at https://s3.amazonaws.com/cd.live/uploads/content/file_en/7289/chinadialogue_health_journal.pdf.

103. “Almost half of wealthy Chinese want to leave, study shows,” The Wall Street Journal, 5 September 2014. Benjamin Carlson, “As war on corruption mounts, China’s rich flee to America, Global Post, 9 February 2014. John Kennedy, “China has at least 1.18 million ready-to-flee ‘naked officials,’ anticorruption rant reveals,” South China Morning Post, 27 February 27, 2013 at  http://www.scmp.com/comment/blogs/article/1159628/china-has-least-118-million-ready-flee-naked-officials-anti-corruption.

Copyright, Truthout. May not be reprinted without permission

Baylor Researcher Finds First-Ever Evidence of Climate Change of Northern China Region Dating Back Thousands of Years (Baylor Univ.)

China's Hunshandake Sandy Lands

China’s Hunshandake Sandy Lands (Courtesy of Steve Forman)

Feb. 16, 2015

By Tonya B. Lewis

Study Sheds Light on How Populations Respond and Adapt to Climate Change

WACO, Texas (Feb. 16, 2015) — Using a relatively new scientific dating technique, a Baylor University geologist and a team of international researchers were able to document—for the first time—a drastic climate change 4,200 years ago in northern China that affected vegetation and led to mass migration from the area.

Steve Forman, Ph.D., professor of geology in the College of Arts & Sciences, and researchers—using a dating technique called Optically Stimulated Luminescence—uncovered the first evidence of a severe decrease in precipitation on the freshwater lake system in China’s Hunshandake Sandy Lands. The impact of this extreme climate change led to desertification—or drying of the region—and the mass migration of northern China’s Neolithic cultures.

Their research findings appear in the January 2015 issue of the Proceedings of the National Academy of Sciences and are available online.

“With our unique scientific capabilities, we are able to assert with confidence that a quick change in climate drastically changed precipitation in this area, although, further study needs to be conducted to understand why this change occurred,” Forman said.

Between 2001 and 2014, the researchers investigated sediment sections throughout the Hunshandake and were able to determine that a sudden and irreversible shift in the monsoon system led to the abrupt drying of the Hunshandake resulting in complications for the population.

“This disruption of the water flow significantly impacted human activities in the region and limited water availability. The consequences of a rapid climatic shift on the Hunshandake herding and agricultural cultures were likely catastrophic,” Forman said.

He said these climatic changes and drying of the Hunshandake continue to adversely impact the current population today. The Hunshandake remains arid and even with massive rehabilitation efforts will unlikely regrow dense vegetation.

“This study has far-reaching implications for understanding how populations respond and adapt to drastic climate change,” Forman said.

Forman is the director of the Geoluminescence Dating Research Lab in the department of geology.

Study co-authors include: Xiaoping Yang, Ph.D., of the Chinese Academy of Sciences; Louis A. Scuderi, Ph.D., of the University of New Mexico; Xulong Wang, Ph.D., of Chinese Academy of Sciences; Louis J. Scuderi, Ph.D., of the University of Hawaii; Deguo Zhang, Ph.D., of the Chinese Academy of Sciences; Hongwei Li, Ph.D., of the Chinese Academy of Sciences; Qinghai Xu, Ph.D., of Hebei Normal University; Ruichang Wang, Ph.D., of the Chinese Academy of Social Sciences; Weiwen Huang, Ph.D., of the Institute of Vertebrate Paleontology and Paleoanthropology and Shixia Yang, Ph.D., of the Institute of Vertebrate Paleontology and Paleoanthropology.

U.S. and China Reach Climate Accord After Months of Talks (N.Y.Times)

 

President Obama and President Xi Jinping of China, with their delegations, met inside the Great Hall of the People in Beijing on Wednesday.CreditMandel Ngan/Agence France-Presse — Getty Images

BEIJING — China and the United States made common cause on Wednesday against the threat of climate change, staking out an ambitious joint plan to curb carbon emissions as a way to spur nations around the world to make their own cuts in greenhouse gases.

The landmark agreement, jointly announced here by President Obama and President Xi Jinping, includes new targets for carbon emissions reductions by the United States and a first-ever commitment by China to stop its emissions from growing by 2030.

Administration officials said the agreement, which was worked out quietly between the United States and China over nine months and included a letter from Mr. Obama to Mr. Xi proposing a joint approach, could galvanize efforts to negotiate a new global climate agreement by 2015.

It was the signature achievement of an unexpectedly productive two days of meetings between the leaders. Mr. Obama and Mr. Xi also agreed to a military accord designed to avert clashes between Chinese and American planes and warships in the tense waters off the Chinese coast, as well as an understanding to cut tariffs for technology products.

A climate deal between China and the United States, the world’s No. 1 and No. 2 carbon polluters, is viewed as essential to concluding a new global accord. Unless Beijing and Washington can resolve their differences, climate experts say, few other countries will agree to mandatory cuts in emissions, and any meaningful worldwide pact will be likely to founder.

“The United States and China have often been seen as antagonists,” said a senior official, speaking in advance of Mr. Obama’s remarks. “We hope that this announcement can usher in a new day in which China and the U.S. can act much more as partners.”

As part of the agreement, Mr. Obama announced that the United States would emit 26 percent to 28 percent less carbon in 2025 than it did in 2005. That is double the pace of reduction it targeted for the period from 2005 to 2020.

China’s pledge to reach peak carbon emissions by 2030, if not sooner, is even more remarkable. To reach that goal, Mr. Xi pledged that so-called clean energy sources, like solar power and windmills, would account for 20 percent of China’s total energy production by 2030.

Administration officials acknowledged that Mr. Obama could face opposition to his plans from a Republican-controlled Congress. While the agreement with China needs no congressional ratification, lawmakers could try to roll back Mr. Obama’s initiatives, undermining the United States’ ability to meet the new reduction targets.

Still, Mr. Obama’s visit, which came days after a setback in the midterm elections, allowed him to reclaim some of the momentum he lost at home. As the campaign was turning against the Democrats last month, Mr. Obama quietly dispatched John Podesta, a senior adviser who oversees climate policy, to Beijing to try to finalize a deal.

For all the talk of collaboration, the United States and China also displayed why they are still fierce rivals for global economic primacy, promoting competing free-trade blocs for the Asian region even as they reached climate and security deals.

The maneuvering came during a conference of Pacific Rim economies held in Beijing that has showcased China’s growing dominance in Asia, but also the determination of the United States, riding a resurgent economy, to reclaim its historical role as a Pacific power.

Adding to the historic nature of the visit, Mr. Obama and Mr. Xi were scheduled to give a joint news conference on Wednesday that will include questions from reporters — a rare concession by the Chinese leader to a visiting American president.

On Tuesday evening, Mr. Xi invited Mr. Obama to dinner at his official residence, telling his guest he hoped they had laid the foundation for a collaborative relationship — or, as he more metaphorically put it, “A pool begins with many drops of water.”

Greeting Mr. Obama at the gate of the walled leadership compound next to the Forbidden City, Mr. Xi squired him across a brightly lighted stone bridge and into the residence. Mr. Obama told the Chinese president that he wanted to take the relationship “to a new level.”

“When the U.S. and China are able to work together effectively,” he added, “the whole world benefits.”

But as the world witnessed this week, it is more complicated than that. Mr. Xi won approval Tuesday from the 21 countries of the Asia-Pacific Economic Cooperation forum to study the creation of a China-led free-trade zone that would be an alternative to Mr. Obama’s Trans-Pacific Partnership, a 12-nation trading bloc that excludes China.

On Monday, Mr. Obama met with members of that group here and claimed progress in negotiating the partnership, a centerpiece of his strategic shift to Asia.

Negotiations for the Trans-Pacific Partnership are much further along than those for the nascent Chinese plan, known as the Free Trade Area of Asia Pacific, and some analysts said the approval by the Pacific Rim nations of a two-year study was mainly a gesture to the Chinese hosts to give them something to announce at the meeting.

For all the jockeying, the biggest trade headline was a breakthrough in negotiations with China to eliminate tariffs on information technology products, from video-game consoles and computer software to medical equipment and semiconductors.

The understanding, American officials said, opens the door to expanding a World Trade Organization agreement on these products, assuming other countries can be persuaded to accept the same terms. With China on board, officials predicted a broader deal would be reached swiftly.

“We’re going to take what’s been achieved here in Beijing back to Geneva to work with our W.T.O. partners,” said Michael B. Froman, the United States trade representative. “While we don’t take anything for granted, we’re hopeful that we’ll be able to work quickly” to conclude an expansion of the agreement, known as the Information Technology Agreement.

On Wednesday morning, Mr. Xi formally welcomed Mr. Obama at a ceremony in the Great Hall of the People; they later toasted each other at a state banquet.

Administration officials said Mr. Obama had pressed Mr. Xi to resume a United States-China working group on cybersecurity issues, which abruptly stopped its discussions after the United States charged several Chinese military officers with hacking.

“We did see a chill in the cyber dialogue,” said Benjamin J. Rhodes, the deputy national security adviser. “We do believe it’s better if there’s a mechanism for dialogue.”

On Tuesday, Mr. Obama credited APEC with originating the work on reducing tariffs, saying, “The United States and China have reached an understanding that we hope will contribute to a rapid conclusion of the broader negotiations in Geneva.”

Talks with China over expanding the 1997 accord on information technology broke down last year over the scope of the products covered by the agreement. But after intensive negotiations leading up to Mr. Obama’s visit, Mr. Froman said, the Americans and the Chinese agreed Monday evening to eliminate more than 200 categories of tariffs.

While the United States still exports many high-technology goods, China is the world’s dominant exporter of electronics and has much to gain from an elimination of tariffs. Taiwan, South Korea and Japan increasingly find themselves supplying China’s huge electronics industry, deepening their dependence on decisions made in Beijing.

The administration estimated that expanding the Information Technology Agreement would create up to 60,000 jobs in the United States by eliminating tariffs on goods that generate $1 trillion in sales a year. About $100 billion of those products are American-made. The administration faces a longer path on the Trans-Pacific Partnership, including whether Mr. Obama will obtain fast-track trade authority from Congress. That could make it easier for the United States to extract concessions from other countries, since they would have more confidence that the treaty would be ratified by Congress.

While Mr. Froman conceded that sticking points remained, he said, “It’s become clearer and clearer what the landing zones are.” He said that Mr. Obama would seek fast-track authority, but that the best way for him to win congressional passage of the Trans-Pacific Partnership would be to negotiate the best deal.

Once a Symbol of Power, Farming Now an Economic Drag in China (New York Times)

 

Li Haiwen, 47, grows medicinal plants, rather than grain, on the plot of land he rents from the local government in Yangling. “The more grain you plant,” he said, “the poorer you get.” Credit Gilles Sabrie for The New York Times

YANGLING, China — For about 4,000 years, farming in this region has been a touchstone of Chinese civilization. It was here that the mythic hero Hou Ji is said to have taught Chinese how to grow grain, and the area’s rich harvests underpinned China’s first dynasties, feeding officials and soldiers in the nearby imperial capital.

But nowadays, Yangling’s fields are in disarray. Frustrated by how little they earn, the ablest farmers have migrated to cities, hollowing out this rural district in the Chinese heartland. Left behind are people like Hui Zongchang, 74, who grows wheat and corn on a half-acre plot while his son works as a day laborer in the metropolis of Xi’an to the east.

Mr. Hui, still vigorous despite a stoop, said he makes next to no money from farming. He tills the earth as a kind of insurance. “What land will they farm if I don’t keep this going?” he said of his children. “Not everyone makes it in the city.”

Farm output remains high. But rural living standards have stagnated compared with the cities, and few in the countryside see their future there.The most recent figures show a threefold gap between urban and rural incomes, fueling discontent and helping to make China one of the most unequal societies in the world.

The nation’s Communist leaders have declared that fixing the countryside is crucial to maintaining social stability. Last year, they unveiled a new blueprint for economic reform with agricultural policy as a centerpiece. But the challenge confronting them resembles a tangled knot.

It begins with the fact that farms in China are too small to generate large profits, about 1.6 acres on average, compared with 400 acres in the United States. Yet it is difficult to consolidate these farms into larger, more efficient operations because Chinese farmers do not own their plots — they lease them from the government.

Privatizing farmland would allow market forces to create bigger farms. But that would be a political minefield for the Communist Party. It would also risk exacerbating inequality, by concentrating land ownership in the hands of a few while leaving many rural families without farms to fall back on if they hit hard times in the cities.

“All of these issues are interlocked and require a series of reforms to be solved,” said Luo Jianchao, a professor at Northwest A & F University in Yangling, and a government adviser. “There’s no magic bullet.”

In late September, President Xi Jinping endorsed an experiment underway in Yangling and other parts of China to untangle this knot. The measure, called liuzhuan, stops short of privatization but gives farmers land-use rights that they can transfer to others in exchange for a rental fee.

The goal is to simulate a private land market and allow China’s family-run, labor-intensive farms to change hands and be amalgamated into large-scale, industrialized businesses. In theory, liuzhuan allows this to happen without cutting ties between rural families and the land, because they collect rental fees as a safety net.

Mr. Xi has presented the policy as critical to China’s next phase of economic reform. Skeptics, however, say it shows the government remains unwilling to consider a bold measure that has worked in many countries: giving farmers full ownership of their land.

“Privatization of land is a key issue but it’s completely taboo,” said Tao Ran, an agricultural expert at Renmin University in Beijing. The party leadership, he said, “cannot countenance it.”

More is at stake than the socialist credentials of the Communist Party, which came to power in a peasant revolution in 1949 and immediately collectivized farmland. State ownership of land is also a major source of government revenue. In areas near cities, local officials often rezone agricultural land and flip it to developers at a huge premium, sometimes setting off violent protests by residents who are left out.

Others see the system of political control of the countryside at stake. “The rural system they’ve had since the 1950s is based on the state ownership of land,” said Fred Gale, who writes an influential blog on China’s agricultural sector called Dim Sums. “If this unravels, then the bureaucrats would be at a loss as to how to manage the countryside.”

In Yangling, a district of 155,000 people that has been a center for agricultural sciences since the 1930s, several problems with the government’s attempt to sidestep privatization are apparent.

Because farmers do not own their land, they cannot sell it and get a large, lump sum payment that could be used to make a new start. Nor can they mortgage land for funds that could be reinvested in their farms or in other businesses.

Yang Tewang, a branch manager of the state-run Yangling Rural Commercial Bank, said he has made about $3 million in mortgage-style loans since the liuzhuan experiment began. But he said they were not true mortgages since the banks cannot repossess land if the farmer defaults — the state owns the land, not the farmer. As a result, Mr. Yang said he minimizes risk by lending only to large-scale vegetable and fruit farmers.

“The rest don’t pay,” he said. A grain farmer, for example, could never get a loan, he said.

Another problem has been figuring out how to set the rental fees that rural families collect if they transfer their land-use rights.

Yangling set up a land bank that took over land-use rights in an area of 36 square miles, then set an annual rental fee of at least $750 per acre of land. Farmers could choose between giving up their land and collecting that rent, or leasing their land back from the state and continuing to farm.

But the fees can distort the market. For example, they have discouraged production of grain, which does not sell for enough of a margin over the cost of renting the land. Grain pays only about $1,250 per acre, for an annual profit of about $500, said one resident, Li Haiwen.

“The more grain you plant,” he said, “the poorer you get.”

Mr. Li grows magnolia bushes used in traditional Chinese medicine instead. But he said farming is just a sideline for him. His main source of income is in professional landscaping. “I think our minds are opening up and we realize there are other ways to make money,” he said.

Exactly why rental prices are so high is open to debate. In some parts of China, rents are even higher than in Yangling, topping $1,200 per acre. By contrast, the average acre of farmland in the United States rented for $136 in 2013, according to the United States Department of Agriculture. Some experts say the rental fees have been driven up by the same sort of speculation that has made apartments so exorbitantly expensive in Chinese cities. Even in a remote area like Yangling, an apartment of 1,000 square feet sells for $50,000, and in cities like Beijing the price can easily be 10 times that.

In recent months, banks like the China International Trust and Investment Corporation have been buying rural land-use rights at high prices. Li Ping, an agricultural expert at Landesa, a nongovernmental organization focused on rural issues, said he believed the purchases have been made with an eye toward rezoning land for housing or industrial use.

“It’s like the housing prices here being higher than in most parts of the U.S.,” Mr. Li said. “It’s not sustainable.”

One of the success stories in Yangling has been the case of Zhang Hongli, who took over 197 acres once farmed by three villages and pays about $150,000 per year in rental fees.

Mr. Yang, the banker, described it as a win-win exchange. Mr. Zhang uses the land to grow watermelons, which sell for a nice profit in Xi’an. Meanwhile, the families who gave up their land are collecting about $500 per year on average, and almost all received free apartments from the government as well.

Government planners hope that more farmers will be moved to the cities so the countryside gradually depopulates and ever-larger-scale farming takes over. For farmers with a job already lined up in the city, this system is attractive. But for people still wanting to work the land, like Zhou Yuansheng, 66, it is an example of how little say he has.

“The big decisions are made by the government,” he said. “No one asked me what I wanted to do with my land.”

China, the Climate and the Fate of the Planet (Rolling Stone)

If the world’s biggest polluter doesn’t radically reduce the amount of coal it burns, nothing anyone does to stabilize the climate will matter. Inside the slow, frustrating — and maybe even hopeful — struggle to find a new way forward

 By | September 15, 2014

As the sun rises in mid-july over andrews Air Force Base near Washington, D.C., Secretary of State John Kerry climbs quickly – he’s positively bouncing – up the carpeted stairs of his blue-and-white government­issue 757. Kerry is heading to Beijing to talk with Chinese leaders about, among other things, one of President Obama’s top priorities in the waning days of his second term: the urgent need to reduce carbon pollution and limit the damage from climate change. But the rest of the world isn’t cutting Kerry any slack right now – there’s trouble with the elections in Afghanistan, rising conflict in the Middle East and upcoming negotiations with Iran on nuclear weapons. As he ducks into the plane, Kerry is already talking intensely on his cellphone, deeply wired into the global chaos. An aide shoulders his bags as well as a large black case that contains his acoustic guitar, which he takes with him everywhere and often plays late at night when he’s alone in his hotel room.

For nearly a decade, the U.S. and China, the two most powerful nations on the planet, have met every year to talk about how to run the world together. When the talks began in 2006, they focused on issues like currency-exchange rates, trade barriers and China’s never-ending disputes with Taiwan. In 2009, shortly after Obama’s inauguration, the U.S. pushed to add climate change to the mix, hoping that a better understanding between the U.S. and China would lead to a better deal at the Copenhagen climate summit that year. (It didn’t help – mistrust between the countries was a large part of the reason why the talks imploded.)

This year’s U.S. delegation includes many of the administration’s most influential climate hawks – Energy Secretary Ernest Moniz, top climate negotiator Todd Stern and John Podesta, counselor to Obama, who has become the administration’s de facto point man for climate policy. This is the diplomatic equivalent of a full-court press. In the past couple of years, Obama has made some important moves, including investing billions in clean energy, jacking up vehicle-efficiency standards and proposing rules to limit pollution from U.S. coal plants. But climate change is a global issue. Unless the West can persuade other countries to take climate action seriously, nothing any single nation does is going to matter much when it comes to solving the problem.

Except, that is, for China. The blunt truth is that what China decides to do in the next decade will likely determine whether or not mankind can halt – or at least ameliorate – global warming. The view among a number of prominent climate scientists is that if China’s emissions peak around 2025, we may – just barely – have a shot at stabilizing the climate before all hell breaks loose. But the Chinese have resisted international pressure to curb their emissions. For years, they have used the argument that they are poor, the West is rich, and that the high levels of carbon in the atmosphere were caused by America’s and Europe’s 200-year-long fossil­fuel binge. Climate change is your problem, they argued – you deal with it. But that logic doesn’t hold anymore. China is set to become the largest economy in the world this year, and in 2006, it passed the U.S. as the planet’s largest carbon polluter. China now dumps 10 billion tons of CO2 into the atmosphere every year. That number is expected to grow to 15 billion tons by 2030, dwarfing the pollution of the rest of the world. If that happens, then the chances that the world will cut carbon pollution quickly enough to avert dangerous climate change is, according to Kevin Anderson, deputy director of the Tyndall Centre for Climate Change Research in the U.K., “virtually zero.”

John Kerry knows this. He also knows that when the nations of the world gather in Paris next December to try to hammer out a global climate agreement, it may be the last best chance to address this problem before the Years of Living Dangerously begin. Like other climate negotiations held under the banner of the United Nations Framework Convention on Climate Change, the Paris meeting is likely to be warped by 25-year-old grudges and a profound sense of distrust. “But right now, Paris is the only game we have,” one member of the State Department’s climate team told me. “If it fails, there is no Plan B.”

In Beijing, one of Kerry’s goals will be to find out all he can about China’s strategy for Paris – what kind of commitment the Chinese might make, how sincere they are, what tactics they will use. But for Kerry, this is anything but a straightforward conversation, because it’s twisted up in the shadow play of U.S.-China relations, which are marked by suspicion, paranoia and saber rattling on both sides as the U.S. adjusts to China’s rising power in the world. “What we are living through now is the end of 500 years of Western predominance,” historian Niall Ferguson has written. The issue is not whether China will challenge America’s dominance, but when and how.

Secretary of State Kerry met with China's Preisent Xi

Secretary of State Kerry met with China’s Preisent Xi in Beijin in July. (Photo: © Jim Bourg/Reuters/Corbis)

Shortly before takeoff, Kerry wanders down the aisle to chat. He talks idly about his July 4th celebration and the recent storm damages to his house on Nantucket. But when asked about his expectations for the Beijing summit, he looks grave: “Frankly, we’re not sure where this is all going.” He remembers what happened in Kyoto, Japan, in 1997, when the U.S. was mocked for signing an agreement that the Senate would never ratify, and in Copenhagen in 2009, when Obama arrived at a conference that was supposed to save the world but ended up being gridlocked by squabbles over money and emissions targets. Kerry is determined not to let that happen again.

After 25 years of failed climate negotiations, it’s easy to be cynical about the upcoming talks in Paris. But there are at least three factors that make a meaningful agreement next year possible.

The first is that climate change is no longer a hypothetical problem – it’s happening in real time all around us. Droughts, floods, more destructive storms, weird weather of all sorts – just look out your window. In the latest reports from the Intergovernmental Panel on Climate Change, the world’s top scientists called the fact that the Earth is warming “unequivocal” and stated that humans are the cause of it. Without dramatic action, the planet could warm up as much as 4 degrees Celsius (7.2 F) by the end of the century, which would be catastrophic. As Kerry said of a report last September, “The response must be all hands on deck. It’s not about one country making a demand of another. It’s the science itself demanding action from all of us.”

The second factor is that until now, the biggest obstacle to an international agreement to reduce carbon pollution has been the United States. But that’s starting to change. Thanks to Obama’s recent crackdown on pollution, as well as the boom in cheap natural gas, which has displaced dirty coal, carbon emissions in the U.S. are on the decline. “What the president has done is very important,” says Robert Stavins, director of the Harvard Project on Climate Agreements. “It allows the U.S. to look at other countries and say, ‘Hey, what are you doing?'”

The final reason for hope, paradoxically, is China’s relentless demand for energy. China is in the midst of a profound economic and social transformation, trying to reinvent itself from an economy based on selling cheap goods overseas to an economy based on selling quality consumer goods at home, while keeping growth rates high and cutting dependence on fossil fuels. Energy demand is expected to double by 2030, and at that pace, there is not enough oil, coal and gas in the world to keep their economy humming. So China’s ongoing energy security depends on the nation developing alternative energy sources in a big way. “We need more of everything,” says Peggy Liu, a sustainability leader who works across China. “Wind, solar, a modernized grid. We need to leapfrog over the past and into a clean-energy future.”

China’s leaders are also waking up to the fact that recent decades of hypergrowth, most of it fired by coal, have exacted a steep price. Air pollution in China’s big cities is among the worst in the world; one recent report found that poor air quality contributed to 1.2 million premature deaths in 2010. As Hank Paulson, former Secretary of the Treasury and longtime China observer, has put it, “What is another point of GDP worth, if dirty air is killing people?” Earlier this year, a riot broke out in Zhongtai, a town in eastern China, when protests against a new waste incinerator turned violent, leaving police vehicles torched and at least 39 people injured; in southern China, protests erupted over the construction of a coal-fired power plant. Similar clashes are increasingly frequent in China as pollution-related illnesses rise.

And it’s not just the air that’s a problem in China. More than 20 percent of the country’s farmland is polluted. Sixty percent of its groundwater supply is unfit for human consumption. Rivers are industrial sewers. Last year, 16,000 swollen and rotting dead pigs were found dumped in the Huangpu River near Shanghai.

What looks to be the impacts of climate change are starting to register too. Droughts have become longer and more frequent, forcing China to import ever-increasing amounts of staples like wheat and soy. By one count, 28,000 rivers in China have vanished. China’s southern provinces have the opposite problem: devastating floods as a result of intense rainfall. In addition, much of the coastline, including cities like Shanghai, are highly vulnerable to sea-level rise.

Chinese leaders know this trajectory is unsustainable – economically and politically. Earlier this year, Premier Li Keqiang “declared war” on pollution. Party leaders in China now routinely talk about the importance of “rebalancing the economy” and creating an “ecological civilization.” China Daily, the Communist Party house organ, regularly runs stories about air pollution and toxic waste. While I was in Beijing, I asked U.S. Ambassador to China Max Baucus why the Chinese were now willing to talk so openly about environmental issues. “The fragility of their government,” he said bluntly. “They will have a social revolt on their hands if they don’t come up with a way of dealing with this.”

Pollution from coal plants

Pollution from coal plants has helped make China the larges carbon-emitter on the planet. (Photo: © Imaginechina/Corbis)

So a big push for clean energy makes a lot of sense. In fact, you could easily argue that China has already done far more than the U.S. to transform its energy supply: Including hydropower, renewables now make up 20 percent of the energy mix (compared to 13 percent in the U.S.), a share targeted to double by 2030. China is the largest producer of wind and solar power on the planet. In 2013, nearly 60 percent of new-power generation was renewable. They also have 28 new nuclear plants under construction, more than any other country. Policywise, Chinese leaders have also been innovative. In the U.S., neither a carbon tax nor a cap-and-trade system to put a price on carbon pollution is under serious consideration; in contrast, China’s carbon-trading program, which includes more than 2,000 pollution sources, is the second-largest trading system in the world (after the EU’s). “If China is successful in using market forces to cap carbon and transform its economy, that may be the best shot we have to limit climate change,” says Dan Dudek, vice president of the Environmental Defense Fund.

The problem for China, in a word, is coal: About 70 percent of the country’s electrical power comes from burning dirty rocks. The Chinese consumed nearly 4 billion tons in 2012, almost as much as the rest of the world combined. Like the oil industry in the U.S., the coal industry has enormous sway in China, making it all the more difficult to kick the habit. But as the rising power of the 21st century, China is under enormous political pressure to behave responsibly, lest it be seen as a pariah like Russia. “The choices that Chinese leaders make in the next decade will be absolutely pivotal to solving the climate crisis,” says former Vice President Al Gore. And for China’s economic and social stability, the consequences couldn’t be higher. “Politically, it’s very difficult to be fingered as the one most responsible for a looming catastrophe,” Gore continues. Or, as Harvard’s Stavins says, “If it’s your century, you don’t obstruct – you lead.”

In the decade or so after 9/11, when U.S. foreign policy revolved around hunting down and killing Islamic terrorists, we didn’t make China a priority. Then in 2011, the Obama administration announced an “Asia pivot” in U.S. foreign policy to counter China’s rising influence. Among other things, the U.S. increased its military presence and surveillance missions in the region, stoking suspicion in China that one of the goals of U.S. foreign policy is to “contain” China – both economically and militarily (if it were, the U.S. was certainly not going to admit it).

China’s response only seemed to play into our fears. China had been investing in new long-range missiles, upgrading its navy, and began using its new muscle­ to claim disputed territory in the South China Sea. China has been playing more subtle games, too: blocking access to Google and The New York Times, and having hackers raid computers at a number of U.S. corporations, stealing trade secrets. Foreign-policy journals openly speculate about the possibility of war with China, a suggestion that U.S. officials dismiss as absurd. “If there is a war between the U.S. and China,” argues Cheng Li, director of the China program at the Brookings Institution, “it will not be over economics or security, it will be because of misjudgment and misunderstanding.”

Of course, even the most rabid warmongers realize that a war between the U.S. and China would be disastrous. That’s one reason why leaders on both sides are looking for common ground – and two of the biggest shared interests are climate and energy. “In a relationship fraught with tension, these are places where we can do business,” says Obama’s adviser Podesta.

On the flight to Beijing, there is a lot of talk about what that common ground between the U.S. and China might look like. Granted, climate catastrophe is bad for everyone. But what leverage does the U.S. really have over China? On a practical level, the Chinese would like access to American technology. (“The deal here is that the U.S. will let you buy lots of energy equipment at exorbitant prices,” jokes one journalist on the flight.) But the Chinese also understand that, given the GOP-held Congress, Obama doesn’t have the power to make any big future commitments to cut carbon pollution – and so why should they?

On a more human level, there’s also a lot of nervousness about China’s notorious difficulty as a negotiating partner. “China has a very top-down culture – you have to speak to people right at the top,” one of Kerry’s top advisers tells me. “And they are very motivated on climate, due to air-pollution issues. But it’s hard to get China to do hard things, in part because, unlike other Asian countries, doing things for the greater good is not a big motivation for them.”

The mismatch between the urgency of taking action and the self-destructive diddling of diplomacy is frightening to witness. A few weeks before heading to China with Kerry, I attended a UNFCCC climate conference in Bonn, Germany. The two-week-long meeting, one of several designed to begin mapping out an agreement for Paris next year, was held in the gray, bureaucratic-feeling Maritim Hotel near the banks of the Rhine and attended by nearly 2,000 delegates from more than 180 countries. But neither John Kerry nor Todd Stern was anywhere to be found; the U.S. delegation was headed by Trigg Talley, an affable white-haired man who is one of Stern’s deputies. If Bonn was a preview of how things will go next year in Paris, then you can kiss human civilization goodbye. Because nothing will get done. And if it appears that something might get done, you can be sure that somebody – most likely the Saudis, who are infamous for their ability to throw a monkey wrench into negotiations at the last minute – will do everything they can to derail it.

The sheer tedium of the discussions is difficult to capture, but let me try: During the plenary session on the final day, which was held in a conference room the size of a football field and was supposed to be where important breakthroughs were announced, I listened for hours to delegates from Singapore discuss the kind of formatting that should be used on the proposal and to delegates from Bolivia argue that bullet points should be used, not paragraph breaks. I never heard the words “carbon” or “greenhouse gas” in the entire session (although “adaptation” got tossed around a lot). The most memorable words were spoken by a delegate from South Africa: “We are sheep in need of herding.”

In Bonn, the stench of nearly 25 years of broken promises and failed agreements was palpable. The U.S. was viewed with particular skepticism and disdain, not just because the U.S. signed but then failed to ratify the Kyoto Protocol, but because until this administration, American presidents and congressional leaders never did anything intentional to substantively curb carbon pollution, despite the obvious impacts it would have on poorer nations. “You talk a lot, but you are not sincere,” one Turkish delegate sniffed to me. Trust in U.S. negotiators had been further undermined when documents made public by WikiLeaks and Edward Snowden revealed that the U.S. had been spying on negotiators from other countries before and during Copenhagen, trying to gain intelligence on their positions. The revelations were particularly damning given the good-faith nature of climate negotiations. “After almost 30 years of this kind of thing,” one longtime participant in these talks puts it, “what measure of trust can possibly exist? How do you strike a deal on issues that are central to your country’s survival with someone you think is out to screw you?”

Issues of trust aside, several things are immediately apparent to me in Bonn about the content and design of the agreement that is likely to emerge in Paris next year. One is that it is going to disappoint and anger a lot of people, particularly those who think the job of a climate treaty is to force big polluters to change their ways. The Paris agreement will largely be a “bottom up” treaty, in which each country will put forward a “contribution” for what each is willing to do to reduce carbon pollution. Those contributions will then be reviewed in the future – exactly how and by whom isn’t clear – to make sure each nation is keeping its promise. There will be no legally binding caps on emissions, no mandated “targets” that countries need to reach. In fact, it will not be a treaty at all (a treaty would need to be ratified by the U.S. Senate, which everyone knows will never happen). It will likely be an agreement “with legal force,” which means, basically, that some parts of the agreement might be legally binding in some countries.

However toothless this approach might seem, there is logic behind it. Since Kyoto, international climate efforts have largely failed because they were too prescriptive. Few nations were willing to bow to the demands of an international carbon police. And beyond that, there was no way to enforce carbon limits.

But even if the talks succeed in creating a sustainable basis for international cooperation, whatever emerges from Paris next year is extremely unlikely to put the world on a path that would limit warming to below 2 degrees Celsius (3.6 F), which was enshrined in the Copenhagen Accord as the threshold for dangerous climate change. For that to happen, says the Tyndall Centre’s Kevin Anderson, “global emissions from energy need to reach a peak by around 2020, and then rapidly reduce to zero by 2050 at the latest.” “I’m not giving up hope,” Kerry told me. “Physically, it’s possible. But politically, it will be very difficult.” Podesta is even more blunt. “If we wait until we have a binding international agreement that actually puts us on track for 2 C,” he says, “we’ll hit 2 C before we get an agreement. But we have to get started if we hope to get to the destination.”

The second revelation is that the Paris agreement is likely to be more about money than about carbon. That is not inappropriate: Climate change is, at its base, an environmental-justice issue, in which the rich nations of the world are inflicting damage on the poor ones. One question that has always haunted climate agreements is, how should the victims be compensated? In past U.N. agreements, developed countries have promised aid to poorer nations. But in translating these general commitments into hard numbers, says Elliot Diringer, a climate-policy expert at the Center for Climate and Energy Solutions, “the cash flows really have never been enough.”

In Paris, they will try again. The delivery vehicle of choice is called the Green Climate Fund, which was one of the few concrete accomplishments to come out of Copenhagen. The idea is simple: Rich countries pay into the fund, the fund’s 24-member board examines proposals from developing countries for clean-energy and climate-adaptation projects, and then it awards funds to those it finds worthy.

The Green Climate Fund was born in the closing days of the Copenhagen negotiations, when then-Secretary of State Hillary Clinton tried to lure China and other developing nations into a deal by promising that, in exchange for agreeing to a binding cap on carbon pollution as well as outside monitoring and verification of pollution rates, rich nations like the U.S. would pledge a combined $100 billion a year to help poor nations. Many negotiators thought it was a clever (or not so clever) ploy by the U.S. to make China take the fall for the collapse of the Copenhagen deal, since it was clear that China considers emissions data a state secret and would never allow outsiders to pore through the books. But regardless of the intentions, the deal fell apart. The $100 billion promise lingered, however, and was codified in later agreements. (Although $100 billion sounds like a lot, it’s a small part of the $1 trillion a year that will be necessary to transform the energy system.)

Right now, developed nations have a long way to go to live up to Clinton’s promise. The Green Climate Fund has taken four years to get up and running, and still nobody knows if it will primarily make loans or grants. So far, only Germany has come through with a meaningful pledge, offering $1 billion over the next nine years. Stern says the U.S. is putting “a lot of blood, sweat and tears” into getting the fund set up right, and that the $100 billion a year will come from a variety of sources, including private investment. But if the point of the fund is to demonstrate the commitment of rich nations to help the poor, it will need them to make real financial commitments. “Big new public funds are not viable,” says David Victor, a climate-policy expert at the University of California, San Diego. “This could be a train wreck of false expectations.”

In Bonn, the biggest question on many negotiator’s minds was, “Will China step up?” Despite the fact that China is the biggest carbon emitter on the planet, with the most dynamic economy in the world, the Chinese remain wedded to a 25-year-old idea that China is still a developing country, in the same category as, say, Uganda, and therefore not responsible for taking action. At least, not until the U.S. and the EU – which, with their cumulative emissions, have essentially caused the problem of global warming – take the first step. Among negotiators, China’s stance is widely viewed as a negotiating tactic to lower expectations for action and to allow it to play moral defender for other developing nations, some of whom fear that if China makes a big move, it will increase the pressure on them to do the same.

I got a preview of the kind of arguments U.S. negotiators will face when I bumped into Zou Ji, the deputy director general for the National Center for Climate Change Strategy and International Cooperation and a key member of the Chinese negotiating team, in the lobby of the Maritim Hotel. I asked him if the recent action by Obama to limit pollution from power plants and increase fuel-efficiency standards had changed the dynamics in the negotiations. “It is a good thing,” Ji told me. “But now, America says to us, ‘Your turn to step up.’ Well, we welcome what you have done, but we want to see more action from the U.S. first. It is very clear that Congress is a big constraint for you; Obama can only do what he can do.” Ji argues, accurately, that the U.S. is still the far richer country, and while China’s carbon emissions are enormous, if you break it down to per-capita emissions, the average American is responsible for dumping almost three times as much CO2 into the atmosphere every year as the average Chinese.

I point out to him that this is true, but that cumulative emissions in China will soon dwarf those in the United States.

“China needs to do its part, but right now the U.S. still has huge potential to do more,” he says forcefully. “I have lived in the U.S., where everyone has a clothes dryer and an air conditioner and a big refrigerator and a big house and a big car. In the EU and Japan, they also live well, but people there only consume half the energy Americans do. You do have the capacity to live at the same standard and consume far less – if you choose.”

When Kerry’s plane lands in Beijing, we immediately jump into a line of SUVs and are whisked away to the Great Wall just north of the city for what one State Department staffer calls “a little cultural sightseeing.” When I visited the wall a few years ago, the air pollution was so bad, I could hardly see 15 feet in front of me; today, it’s clear enough to see the Xishan Mountains, which are 12 miles away at the western edge of the city. Kerry strolls along the wall with Chinese dignitaries, then we motorcade to the Marriott hotel in central Beijing, where the U.S. government has taken over two floors. Security is high: The entrance to the hotel is blocked, and armed agents are everywhere. The biggest concern seems to be Chinese spies; on an earlier trip to China, five members of Todd Stern’s team received spoof e-mails that contained a bot that could have given a hacker control of their computers, and shortly after I check into my hotel, I am told that I can assume my room is bugged and my e-mail is read. Across the street from the hotel is an Apple Store, Gucci, Hermès and, strangely, a coal-fired power plant with clouds and a blue sky painted on the sides, as if to disguise the dirty black rocks burning within.

The next morning, Chinese President Xi Jinping opens the talks at the Diaoyutai State Guesthouse, an elegant retreat in western Beijing. His address to 500 or so American and Chinese dignitaries isn’t exactly a rousing call to action on climate change. Instead, he talks about the importance of keeping the Chinese economy humming, declaring that China needs a peaceful and stable environment “more than ever.” Xi is a tough-looking guy with a Tony Soprano vibe, and his speech leaves no doubt that he sees China as the rising power. “It is natural that China and the U.S. may have different views, and even frictions, on certain issues,” he says. Then he adds, “Confrontation between China and the United States would definitely spell disaster for the two countries and for the wider world.” Xi only mentions climate change once, in a passing reference to it as a significant challenge that both nations face.

Protestors take to the streets in China

Protestors take to the streets to fight construction of a chemical factory in May 2013. (Photo: AFP/Getty Images)

Xi, who came to power in 2013, is “a very strong leader for China,” says Cheng Li of the Brookings Institution. Li contrasts him with other recent Chinese leaders, most of whom tended to be pale figures who dutifully rose through the ranks of the Communist Party. Xi, who is 61, rules with authority and efficiency. He grew up the son of a deputy prime minister and revolutionary who was known as an architect of China’s special economic zones, which were important drivers in the liberalization of China. As president, Xi has cracked down on corruption and is a fierce defender of Chinese interests in disputed territories like the South China Sea. He has also toughened up China’s internal security forces (China spends more on domestic security than it does on national defense). But U.S. officials who have had close contact with Xi are impressed by his directness. One White House staffer pointed to a recent agreement to reduce hydrofluorocarbons, a potent greenhouse gas, that Xi worked out with Obama last year. “Xi rolled the Chinese bureaucracy to get that done,” the staffer says. Kerry also sees him as an effective leader. “I had long conversations with Xi while I was chair of the Foreign Relations Committee,” he tells me. “The kind of action we’ve seen in China recently doesn’t happen without his personal commitment.”

When Kerry takes the podium after Xi steps down, he is conciliatory. He reassures Xi and other Chinese leaders in the room that the U.S. does not seek to “contain” China, and that it welcomes the emergence of “a peaceful, prosperous China that . . . chooses to play a responsible role in world affairs.” He, too, talks a lot about economic growth and how “the true measure of our success will not be just whether our countries grow, but how our countries grow.” Kerry continues, “Step by step, we are shifting our focus . . . to the inescapable reality of a clean-energy future.”

When Kerry travels to countries where the U.S. might be perceived to have the upper hand, he can be very blunt about the potential ravages of climate change. A few months ago, in a speech in Jakarta, Indonesia, he called it the “world’s most fearsome” weapon of mass destruction. But Kerry doesn’t say a word here about melting ice caps, rising seas or weapons of mass destruction. Instead, he talks about how clean energy is “the biggest market the world has ever seen.” He talks investment flows, technology sharing and pollution-free prosperity. “Our goal,” Podesta tells me, “is to create a virtuous circle in the Pacific, where they match our ambition, and then we match theirs.”

For the U.S., pushing for action is imperative: If China makes an aggressive move on carbon, it kills a favorite political talking point from climate deniers in Congress. “I can’t tell you how many meetings I’ve sat in where the subject of ‘What is China doing?’ comes up,” says Podesta. “For us, it’s important that we take that objection off the table.”

For the Chinese, beyond the obvious motivation to clean up the air, the question is what they want from the U.S. in return. As Kerry put it to me later, “The Chinese have a lot of stuff they want from us. We have natural gas. We have coal. We have clean-energy technology.” How this bargaining works out is the heart of the negotiations and gets into complex areas like protection of intellectual property rights. In the past, the Chinese simply wanted to buy our technology, copy it and manufacture it more cheaply than anyone else. “But that dynamic has changed,” says one Department of Energy official. “Now the deals are much more about joint ventures and shared investment.”

Later in the day, top members of the U.S. and China delegations meet in a conference room on the second floor for the Joint Session on Climate Change and Clean Energy. It is a stiffly formal scene, with Kerry, Podesta, Stern, U.S. Energy Secretary Moniz and science adviser John Holdren on one side of a long mahogany table, and Chinese leaders, including Vice Premier Wang Yang and lead climate negotiator Xie Zhenhua, on the other side. In this more intimate group, the Chinese are much blunter and more forthright about the risks of climate change. But it isn’t clear if this is because they feel more relaxed or because they are more willing to say what the U.S. wants to hear. State Councilor Yang, who opens the discussion, calls climate change “a common and grave challenge to mankind.” He talks about actions the Chinese government has taken to promote clean energy and efficiency, and he underscores China’s support of the UNFCCC climate negotiations. “We have also maintained close dialogue in consultation on [the U.S.’s and China’s] respective climate-change policies,” he says.

Kerry nods politely and then reads from prepared remarks: “Every one of us in this room is well aware that the climate crisis is one that respects no border. It’s transboundary. It affects the planet.”

The Chinese leaders listen carefully, just as the American team listened carefully to Yang’s remarks, attuned to nuances and gestures that gain trust or lose it, that show respect or haughtiness. And yet, I get the strong sense at this meeting, and at every other one I’ve attended, that 15 levels of chess are being played, that the motives and impulses of each side remain unknowable to the other, and that both sides are making calculations that will shape their careers, their economies and the future of the planet. And always the fear – expressed in the glint of an eye, a moment of hesitation – that each is being played. The Chinese worry that the U.S. won’t keep their word or has a secret plan to thwart their economic growth; the Americans worry that the Chinese are using shady data, and that they are only in it for the money.

Sometimes, the enormous gap between how the Chinese run their country and how the Americans run theirs reveals itself. One of those moments occurs on the second day of the talks in the Great Hall of the People in Tiananmen Square, which is China’s parliamentary chamber. Kerry and Yang appear at a press conference to bestow six “EcoPartnership” awards to American and Chinese organizations that are collaborating on clean-energy and climate solutions. In the context of the talks, it is a small-bore event, with a handful of dignitaries and some Chinese press.

But maybe because of this, Kerry’s remarks at the event are looser and less diplomatic than anything I’ve heard him say earlier. They are also more dangerous politically, because he talks about the one thing the Chinese leadership is most afraid of: the power of social activism. He describes how, in 1970, after 20 million Americans attended Earth Day rallies, public outrage led to the creation of the Environmental Protection Agency, as well as the passage of the Clean Air Act and, later, the Clean Water Act. “So I have seen the power of grassroots action, of local efforts becoming magnified and ultimately creating action at a larger, federal level,” Kerry says, his voice rising. “And I see that same kind of drive, that same kernel of innovation, and of demand for a difference, right here [in China], today.”

Kerry’s larger point is undoubtedly true – there is a rising consciousness of environmental issues in China, a sense that civilized societies don’t let their rivers catch fire. But as Kerry knows very well, there will be no organized demonstrations of millions of people marching on the streets in China, demanding change. If they tried, they would likely be tear-gassed or thrown in jail. Activism, such as it is in China, is either well-behaved and sanctioned by the state, or it is deemed reckless and dangerous and quickly shut down.

After his remarks at the Great Hall of the People, Kerry gets polite applause and then sits down to listen to a boilerplate speech from Yang. If anyone noticed that the secretary of state of the United States had just suggested that a populist movement in the People’s Republic of China could challenge the status quo, it wasn’t apparent.

One person who understands the dangers of social activism as well as anyone is Shuo Li, 27, a climate-policy officer for Greenpeace East Asia. Shortly after Kerry’s talk, I visited Li at Greenpeace’s office in Beijing. A year earlier, Greenpeace had published an investigation into the development of a coal-to-liquids plant in Inner Mongolia. Transforming coal into liquid fuels like diesel (or, in a similar process, natural gas) is expensive and, more importantly, an environmental disaster. Compared with typical refining processes, coal liquefaction produces 14 times the amount of carbon dioxide.

What’s interesting about Greenpeace’s investigation is that it targeted the owner of the plant, Shenhua Group, which is China’s biggest coal producer and a political powerhouse. (“Shenhua is the monster,” Li says.) In the U.S., enviros go after big companies all the time. But in China, this kind of action is unprecedented. As was its effectiveness. Li says the company called in Greenpeace, and Shenhua agreed to quit pumping out groundwater for use in the plant.

I ask Li if this is a sign that Chinese leaders are becoming more tolerant of environmental activism?

“Maybe a little,” Li says. He explains that unlike, say, publicly celebrating the Dalai Lama or arguing for the ethical treatment of the Uighur minority in China, it’s OK to raise questions about environmental problems. “But you have to do it the right way. You can go after local officials or individual power plants.” But, as he points out, there is no clear line between what is acceptable and what is not. “That is something everyone has to discover for themselves,” he says. He adds with a sly smile: “For the government, it is more effective that way.”

But Li knows he’s treading dangerous ground. In 2012, a 65-year-old former forestry official was threatened with five years in prison for publishing and distributing books that questioned the overdevelopment of Hainan Island in southern China. (He received a three-year suspended sentence and a fine.) Two years earlier, one of Beijing’s most respected science reporters, Fang Xuanchang, who earned a reputation for calling bullshit on many government-funded research projects, was brutally beaten on his way home from work. His assailants were never found. The message, as one journalist wrote in Foreign Policy, was clear: “Don’t go there, or you could be next.”

I asked about the rising number of protests around the country against industrial plants found to be dumping chemicals­ into rivers, or protesters throwing bricks at police to halt the construction of a new power plant. “Individual NIMBY actions are acceptable,” Li says. “But when you try to mobilize people on a larger scale, that is when you get in trouble.”

“Trouble, how?”

“You don’t even want to think about it,” Li answers, fear flashing in his eyes.

The rise of China, which was driven by the biggest and fastest industrial revolution the world has ever seen, was fueled almost entirely by coal. And its continued success – not to mention, in many ways, the fate of human civilization – depends on how quickly it can wean itself off this cheap, dirty, abundant fossil fuel. “The big question,” Moniz told me in Beijing, “is how fast they can bend down the curve of coal.”

“Bending down the curve of coal” is geek-speak for reducing dependency on coal. Because coal – by far the most carbon­intensive fossil fuel – will most likely be replaced by cleaner energy sources; in that case, the moment China’s coal consumption plateaus will also be the moment their greenhouse-gas pollution plateaus. And that could be the moment the world begins a transition toward a stable climate.

But the question is: When will that moment occur? In China, this question will not be answered by the invisible hand of the market but, ultimately, by the strong hand of President Xi and other party leaders. Xi and his advisers will make a complex economic and political calculation about how far they want to push clean energy – and whether they want to encourage a shift away from coal by, say, expanding the existing carbon-trading market, passing a straightforward tax on carbon, or simply issuing a dictum that caps the amount of coal the nation can consume. A few weeks before my conversation with Moniz, a respected Chinese academic had speculated that China would cap coal consumption by 2030. “That would be a big step in the right direction,” Gore told me. But as Gore well knows, unless that cap is followed by a radical and almost unimaginable global shift toward zero-carbon energy, it’s not a big enough step to avert climate chaos in the coming decades.

China has already taken a number of measures to move away from coal. It is reportedly closing down 50,000 small coal-fired furnaces and has essentially stopped building new coal plants in big eastern cities like Beijing and Shanghai. In 2020, burning coal will be banned in Beijing. But given the enormity of China’s coal addiction, these are just baby steps compared to what is needed.

And that’s one reason why the Chinese are very interested in natural gas. Natural gas has about half the carbon of coal, and burning it creates much less air pollution. China has the biggest shale-gas reserves in the world and would dearly like to unleash an American-style fracking boom (which is its own kind of environmental nightmare, of course). But the technology used to extract the gas from shale, which was invented in the U.S., is complex and not easy to replicate. In addition, shale gas in China is more deeply buried than in the U.S., and the soil is less porous, making the gas more difficult to extract. And thanks to methane leaks during fracking operations (methane, the principal component of natural gas, is a short-lived but potent greenhouse gas), the climate benefits of natural gas are questionable.

Imagining a fracked-out China is not pretty, but it might beat the alternative – making natural gas out of coal. The process is similar to the coal-to-liquids plant in Inner Mongolia that Greenpeace singled out, and like that process, it is both water- and carbon-intensive. China already has two coal-to-gas plants in operation, with as many as 48 more on the drawing board. Most of them are slated to be built in western China, far from population centers, where Chinese leaders are eager to spur development and provide jobs. But the cost to the atmosphere will be enormous. If all of these plants get built, they will collectively emit more than a billion tons of CO2 each year – more than the entire nation of Germany emitted last year.

Moniz calls coal-to-gas plants in western China “a major issue” for Chinese and U.S. negotiators. “Burning natural gas may help them solve the problem of air pollution,” says Moniz. “But if they get it by manufacturing it from coal, they will be creating another, much larger problem.” And it’s one that impacts everyone on the planet.

The talks ended on a hot, humid afternoon in the Zhongnanhai compound in central Beijing, which houses offices for the Politburo’s most senior members. The compound, which is heavily guarded and closed to the public, is a reminder of China’s Imperial era, with a collection of traditional pavilions scattered around three lovely lakes. Kerry met with Chinese Premier Li Keqiang in the Purple Light Pavilion, a brightly painted pagoda-style building with small porcelain animals on the corners of the roof. Li has none of the bluster – or power – of President Xi, and after exchanging greetings and thank-yous, Kerry seemed eager to hit the road. They spoke in private for a half-hour, then Kerry climbed back into his SUV, and we motorcaded back to the Marriott for a final press conference.

Within minutes, the State Department was e-mailing a list of accomplishments to reporters, including joint U.S.-China demonstration projects on smart grids, technology to capture carbon from coal plants, and new initiatives on forestry and industrial boilers. It was all both important and unimportant, small steps in a long, long march. Later, Kerry would tell me he was impressed by what he’d seen from the Chinese on climate during the trip – “There was no backsliding,” he says. Others on the U.S. team described their sense that key Chinese leaders they’d met were “extraordinarily forward-leaning.”

But huge questions still loom about how far the U.S. and China and every other big polluter on the planet will go to cut emissions. For negotiators who are pushing for a tough agreement with meaningful reductions and clear financial accounting, the biggest fear is not that the U.S. and China won’t agree on key issues, but that they will agree on too much: “We are afraid that the U.S. and China will strike a bargain that makes them both comfortable, but does little or nothing to reduce the risk of climate change,” says Mohamed Adow, senior adviser for Christian Aid, a U.K.-based relief agency that works in many developing nations. “Then the rest of the world will have to decide if they want to go along, or fight for a stronger agreement.”

A few hours later, Kerry and his team jet off to Afghanistan. The world is a big, complicated place, and everyone – even the most committed climate warriors like Kerry – has a lot of other things to think about beyond how much carbon we are dumping into the atmosphere. And that, in a way, is always the problem: There is always something more urgent, more immediately catastrophic to seize the attention of policymakers – and in the coming years, many of the crises that will distract us from dealing with the realities of climate change will largely have been caused by climate change. Through all these short-term emergencies, the Earth will keep warming, the droughts will get worse, food will grow scarce, ice will vanish, the seas will rise, and starting around 2030, climate change will emerge from the background and eventually become the only thing we talk about. It will be the story of the century.

When we get to the Marriott, I walk across the sleek marble lobby with Podesta, who looks uncharacteristically somber. Just before we step into Kerry’s press conference – where he will again underscore the importance of taking action on climate change – I ask Podesta if two days of talks with the Chinese have made him feel more hopeful about Paris next year.

“Yes,” he says. “But it’s going to be a hard road.”

From The Archives Issue 1218: September 25, 2014

Read more: http://www.rollingstone.com/politics/news/china-the-climate-and-the-fate-of-the-planet-20140915#ixzz3Dckfhurq
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Chineses criam macacos geneticamente modificados para estudo de doenças humanas (O Globo)

Pesquisadores utilizaram método revolucionário para alteração de genoma; caso amplia debate sobre ética em testes de animais

O GLOBO

Publicado:31/01/14 – 11h30

Gêmeos de macacos cinomologos criados em laboratório por pesquisadores chineses são modelos próximos dos seres humanos. Foto: DivulgaçãoGêmeos de macacos cinomologos criados em laboratório por pesquisadores chineses são modelos próximos dos seres humanos Divulgação

NANQUIM – Cientistas chineses criaram pela primeira vez dois macacos geneticamente modificados para o estudo de doenças humanas. A pesquisa, publicada na revista “Cell”, utilizou o método Crispr – que permite modificar genes específicos sem alterar outros pedaços do genoma. Este é o primeiro passo para a criação de modelos geneticamente modificados de primatas para ajudar no diagnóstico e tratamento de enfermidades como os males de Alzheimer e Parkinson, e amplia o debate sobre a ética em testes de animais.

O estudo foi realizado por pesquisadores da Faculdade de Medicina de Nanquim, na China, em conjunto com laboratórios de pesquisas genéticas de biomédicas do país e teve como alvo os macacos cinomologos (Macaca fascicularis) por seu tamanho e semelhanças com os humanos.

Para criar os dois filhotes, os cientistas modificaram três genes relacionados à doenças como o diabetes e o câncer em quinze embriões. O sequenciamento de DNA comprovou que as mutações tinham sido bem-sucedidas para dois genes em oito deles. Os embriões foram então inseridos em fêmeas e apenas dois sobreviveram.

Método revolucionário para a medicina genética

A técnica Crispr foi descoberta inicialmente como parte da defesa imunológica natural de algumas bactérias contra vírus invasores. Em 2012, cientistas liderados por Jennifer Doudna, da Universidade da Califórnia, publicaram um primeiro estudo mostrando que ela na verdade funcionava em qualquer área de um genoma se associado a uma enzima de restrição (capaz de cortar uma molécula num local bem definida) chamada CAS9.

O método torna possível editar qualquer parte dos pares de cromossomos sem ter depois mutações inesperadas ou falhas. Ele se tornou popular no ano passado na criação de ratos e camundongos geneticamente modificados, e foi a primeira vez que funcionou em primatas.

Como os macacos não apresentaram nenhuma outra mutação em seu genoma, os pesquisadores acreditam que estão mais próximos de tentativas de recriar doenças humanas que ainda não são compreendidas por completo.

“Com a precisão genética do sistema Crispr-CAS9, esperamos que muitos modelos de doenças possam ser gerados em macacos, o que trará um avanço significativo ao desenvolvimento de estratégias terapêuticas em pesquisas biomédicas”, escreveu Weizhi Ji, um dos autores da pesquisa, do Laboratório Yunnan Key de Pesquisas Biomédicas em Primatas, na China.

Polêmico teste em animais

Apesar de comemorado pela comunidade científica, o método é controverso. Grupos que se opõem ao teste de animais temem que ele amplie o uso de macacos em pesquisas.

– Embora os avanços tecnológicos na engenharia genética devam ser aplaudidos e admirados, sua posterior utilização para a produção de macacos geneticamente modificados é questionável – afirmou Andrew Bennett, do Centro Nacional de substituição , aperfeiçoamento e redução de animais em pesquisa (NC3Rs) ao “Guardian”. – Seria mais interessante o aumento de recursos na produção de modelos baseados em tecidos e células humanas, em vez de tentar desenvolver espécies de animais de laboratório mais sofisticados. Se você está trabalhando em doença humana, então é necessário o uso humano para prever respostas humanas.

Apesar de acreditar que modelos de primatas são essenciais para recriar distúrbios cerebrais de humanos, Nelson Freimer, diretor do Centro de Genética da Universidade da Califórnia, em Los Angeles, acredita que os macacos só serão utilizados para pesquisa em último caso:

– Vai ser muito crítico definir os problemas para os quais a técnica será utilizada, assim como acontece com a pesquisa animal – disse. – Você precisa usar todas as alternativas antes de propor a pesquisa animal. O uso de macacos será reservado para doenças terríveis nas quais não conseguimos avançar de outra maneira.

No entanto, Troy Seidle, diretor de pesquisa e toxicologia na Humane Society International (HSI), pede a proibição total da manipulação genética de macacos.

– Você não pode manipular geneticamente um primata altamente sensível sem comprometer o seu bem-estar, talvez de forma significativa. Primatas transgênicos são tão inteligentes, sensíveis ao sofrimento físico e psicológico que seus pares não modificados – ressaltou Seidle. – Na verdade, o escopo para o sofrimento dos animais é maior porque a engenharia genética dá aos pesquisadores um poder quase ilimitado para criar animais doentes com sintomas potencialmente devastadores e incapacitantes, que podem incluir mutações fenotípicas totalmente inesperados. É importante notar também que esta pesquisa está sendo pioneira na China, onde não há atualmente nenhuma lei ou controle ético em experiências com animais.

Leia mais sobre esse assunto em http://oglobo.globo.com/ciencia/chineses-criam-macacos-geneticamente-modificados-para-estudo-de-doencas-humanas-11463007#ixzz2sHztieni  © 1996 – 2014. Todos direitos reservados a Infoglobo Comunicação e Participações S.A. Este material não pode ser publicado, transmitido por broadcast, reescrito ou redistribuído sem autorização. 

Smog in Beijing Is So Awful You Have to Catch the Sunrise on a Big Screen (Time)

In the airpocalypse, fake sunrises are a thing

By , Jan. 17, 2014

462905499
ChinaFotoPress / Getty Images. This LED screen displays the rising sun in Beijing’s Tiananmen Square, which is shrouded in heavy smog on Jan. 16, 2014.

Updated on Jan. 17, 2014 at 5:32 a.m EST.

Air pollution in the Chinese capital reached new, choking heights on Thursday. Those who still felt the urge to catch a glimpse of sunlight were able to gather around the city’s gigantic LED screens, where this glorious sunrise was broadcast as part of a patriotic video loop.

This post has been revised to reflect that the sunrise was not broadcast specifically for that day.

Read more: Beijing’s Televised Sunrise | TIME.com http://world.time.com/2014/01/17/beijing-smog-combatted-with-televised-sunrises/#ixzz2qgS80R00

 

China considers end to mandatory animal testing on cosmetics (CNN)

By Zhang Dayu, CNN

November 15, 2013 — Updated 0649 GMT (1449 HKT)

A worker holds white rats at an animal laboratory of a medical school in 2008 in Chongqing, China.

A worker holds white rats at an animal laboratory of a medical school in 2008 in Chongqing, China.

STORY HIGHLIGHTS

  • China considers allowing sale of some cosmetics without requiring them to be tested on animals.
  • The proposal covers products made in China, but not imported products
  • Campaign group said change came quicker than expected
  • But does not expect wholesale end to animal testing of cosmetics in China

Hong Kong (CNN) — Cosmetic companies and animal rights groups have welcomed a proposal by China to allow sales of some cosmetics without requiring them to be tested on animals.

Animal testing would no longer be mandatory for “non-specialized cosmetics”, including shampoo, soaps and certain skin products manufactured in China from June next year, according to a document posted on the website of the China Food and Drug Administration earlier this month.

Beauty companies have long faced an ugly dilemma in China.

Local laws and regulations require animal testing for cosmetic products sold in the country, which has made the lucrative market a tricky area for brands that want to sell in China without alienating consumers in other places that frown upon animal testing.

“Non-specialized cosmetics produced in China could avoid toxicological testing after going through risk and safety checks,” the China Food and Drug Administration said.

Imported cosmetics are not covered in the proposal. But the document indicated that China would gradually ease regulations on animal testing, which would allow more international firms opposed to animal testing to enter China’s 134 billion yuan ($22 billion) cosmetics market.

READ: From poison to potion: Toxins turned into life-saving drugs

Current regulations require all cosmetics to go through a lengthy approval process known as “toxicological testing” which involves testing on animals like rabbits and guinea pigs.

“The Body Shop welcomes the signals that the Chinese authorities are adopting a new approach to cosmetic testing,” spokeswoman Louise Terry said in emailed comments from London.

“We have campaigned against animal testing for over 20 years and we look forward to selling our products in China one day.”

Cosmetic brand Urban Decay last year abandoned plans to sell its products in China in response to pressure from consumers and campaign groups, according to Cruelty Free International.

Dave Neale, animal welfare director at campaign group Animal Asia, told CNN the planned changes had come quicker than expected given that local campaigns against animal testing have only been going for two years.

“That’s a very significant development because it took many years for European Union to allow these products to be sold (without being tested on animals).”

Earlier this year, a complete ban on the sale of cosmetics developed through animal testing took effect in the European Union.

But Neale added that this proposal would not mark the end of animal testing in China.

“As far as I’m aware, products can still be tested on animals. It just opens the opportunity for non-animal products to be sold,” he said.

Ásia corre o risco de ver deflagrada uma guerra da água (O Globo)

JC e-mail 4497, de 15 de Maio de 2012.

Planos da China de usar rios que nascem no Tibete alarmam os países vizinhos.

Atravessando o planalto do Tibete, cinco grandes rios – Indus, Brahmaputra, Irrawaddy, Salween e Mekong – carregam a água das geleiras dos Himalaias e das monções que abastece 1,3 bilhão de pessoas em vários países do Sudeste da Ásia. Agora, no entanto, este fornecimento está ameaçado pelos planos da China e de outros países da região de construir usinas, barragens e desvios em seu curso, o que pode gerar o primeiro grande conflito mundial em torno deste recurso cada vez mais escasso.

A luta pelo controle desta verdadeira “caixa d’água” continental teve seu primeiro contragolpe desferido pela Índia, onde a Suprema Corte do país ordenou no mês passado o início dos trabalhos para a construção de canais que vão interligar os principais rios indianos. No centro do projeto está uma estrutura de 400 quilômetros de extensão que vai desviar a água do Brahmaputra para o Ganges, visando a irrigar terras cultiváveis sedentas a cerca de mil quilômetros ao Sul.

A decisão indiana é uma reação aos planos chineses de construir barragens e desviar o Brahmaputra, um dos últimos grandes rios do mundo ainda sem modificações no seu trajeto pelo homem, mais acima no seu curso, no Tibete. No Cânion de Tsangpo, o governo da China pretende levantar duas gigantescas hidrelétricas, cada uma gerando mais do dobro da energia da usina de Três Gargantas, no Yangtsé, atualmente a maior do mundo. Além disso, ainda mais alto no curso do Brahmaputra, os chineses querem criar um desvio que levaria até 40% de seu fluxo para as planícies do Norte do país.

O choque entre os projetos de China e Índia – duas potências nucleares -, no entanto, deve fazer uma vítima ainda mais vulnerável: Bangladesh. O país depende do Brahmaputra para conseguir dois terços de toda água que consome, grande parte usada para a irrigação dos campos de arroz durante a longa estação seca da região. Com o fluxo do rio desviado e reduzido, cerca de 20 milhões de agricultores de Bangladesh podem ver suas plantações, e eles próprios, morrerem de sede.

“No caso do Ganges-Brahmaputra, já existem barragens como a de Farakka, construída pela Índia, que trouxe impactos reduzindo áreas úmidas [pântanos] em Bangladesh”, lembra Benedito Braga, professor de Engenharia Civil e Ambiental da USP e vice-presidente do Conselho Mundial de Água. “Mas não acredito que veremos um choque armado entre países por causa disso. Iniciativas como a comissão multilateral para gestão da bacia do Rio Mekong e a South Asian Association of Regional Cooperation (Saarc), fundada em 1985 com representantes do Butão, Índia, Paquistão, Nepal, Bangladesh e Sri Lanka, mas infelizmente sem a presença da China, mostram que há maior potencial para colaboração do que para conflito no caso da gestão das águas.”

Controle chinês – Até recentemente, a China havia focado a construção de suas usinas em rios que correm dentro do país. Mas, diante da explosão na demanda por eletricidade devido ao forte crescimento econômico, os chineses começaram a se voltar para os rios transnacionais. Nos últimos anos, o país já construiu uma série de barragens em afluentes do Brahmaputra e a primeira no curso principal do rio, a Usina de Zangmu, orçada em US$ 1 bilhão, deverá estar pronta em 2014. Depois, será a vez das obras no Cânion de Tsangpo, onde seriam instaladas as usinas gigantes de Motuo (38 gigawatts) e Daduqia (42 gigawatts). Para ser ter uma ideia do tamanho destas barragens, a usina das Três Gargantas, atualmente a maior do mundo, tem capacidade instalada de 22,5 gigawatts, enquanto Itaipu pode gerar até 14 gigawatts.

Mas a China não está de olho só na água dos rios tibetanos que fluem para Índia e Bangladesh. Suas ambições também preocupam outros países vizinhos. Outro atrito recente envolve a barragem de Myitsone, que os chineses estão construindo no Rio Irrawaddy, no Norte de Mianmar. Há três anos, a junta militar que governava o país aprovou a construção, embora 90% da energia que vai ser gerada na usina de 6 gigawatts será exportada para a China. No fim do ano passado, porém, o governo militar de Mianmar suspendeu as obras depois que dezenas de pessoas morreram em choques entre a polícia e moradores locais, cujas vilas serão inundadas pelo reservatório.

A confusa situação política em Mianmar deixa em dúvidas o destino das usinas de Myitsone e 12 outras planejadas pelos chineses na região – seis no Rio Irrawaddy e seis no Rio Salween. Muitas das barragens estão em áreas remotas designadas Patrimônio Mundial pela Organização das Nações Unidas por seus ecossistemas únicos de florestas e água doce. Depois que a construção da usina Myitsone foi paralisada, veio a público um relatório ambiental de 900 páginas encomendado pela própria China desaconselhando as obras da barragem pelo perigo de inundação dos ecossistemas listados pela ONU.

Já o impacto do projeto indiano de desviar o Brahmaputra para alimentar o Ganges foi avaliado por Edward Barbier, da Universidade do Wyoming, nos EUA, e Anik Bhaduri, do Instituto Internacional de Gerenciamento de Água em Nova Déli. Eles alertam que uma redução de 10% a 20% no fluxo do rio poderia deixar secas grandes áreas em Bangladesh. Além disso, com um fluxo menor de água doce, a água salgada da Baía de Bengala invadiria boa parte do delta do rio, causando uma verdadeira catástrofe ambiental.

A melhor prova de que as usinas podem provocar danos ecológicos graves está ali perto, no Rio Mekong, onde a construção de barragens pela China está mais adiantada. Até agora, o país já levantou quatro das oito hidrelétricas que pretende instalar no rio. Estas barragens capturam o fluxo de água das monções e o liberam durante a estação seca. O governo chinês argumenta que, ao regular o fluxo do rio, elas são benéficas, mas há três anos o Programa das Nações Unidas para o Meio Ambiente (Pnuma) alertou que o fim do pulso natural de inundação e seca é uma “ameaça considerável” aos ecossistemas na parte baixa do rio. No estudo para o Pnuma, Ky Quang Vinh, do Centro Vietnamita de Observação dos recursos Naturais e Meio Ambiente, mostrou que um pulso mais fraco faria a água salgada do Mar do Sul da China invadir mais de 70 quilômetros adentro do delta do Mekong, destruindo grandes extensões de plantações de arroz na principal região de produção do segundo maior exportador mundial do cereal.

A luta pela água dos Himalaias está acirrada, mas muitos especialistas argumentam que o aproveitamento do potencial hidrelétrico da região é fundamental se o mundo quiser que países como a China e a Índia alimentem suas crescentes economias com fontes de energia de baixa emissão de carbono. Numa região onde o abastecimento de água já está no limite, no entanto, a disputa pelo recurso pode acirrar os ânimos. A China foi um dos países que votou contra proposta de tratado da ONU para regulamentar o aproveitamento de rios transnacionais, deixando seus vizinhos praticamente como reféns de seus projetos.

“Na verdade, esta resolução sobre usos não navegáveis de rios transfronteiriços está para ser ratificada desde 1997″, lembra Benedito Braga. “Há 15 anos, portanto, o sistema das Nações Unidas não consegue colocar em prática esta proposta de regular o aproveitamento pelos países dos rios que correm além das suas fronteiras políticas”.

Braga destaca ainda que o próprio Brasil, Turquia, EUA, Israel e Áustria, entre outros países, são contra os termos da proposta da ONU por entenderem que ela interfere com o princípio da soberania dos Estados.

“A perspectiva para solução desta questão seria o conceito moderno de compartilhar os benefícios advindos da gestão racional e integrada dos recursos hídricos das bacias transfronteiriças e não simplesmente compartilhar a água”, defende. “Um exemplo típico disso é o aproveitamento hidrelétrico de Itaipu, onde Brasil e Paraguai dividem a energia gerada na bacia do Rio Paraná”.