CHINAwatch

China's new environmental law more promising than expected

After unprecedented wide-ranging public consultations, massive revisions and even change of re-drafting authorities, the much revised law, several years in the making, was finally adopted by the Standing Committee of the National People’s Congress on April 24, to enter into force in 2015.

See a review of the new legislation and an interview with Cao Mingde, law professor at the China University of Political Science and Law, who participated in the drafting of the revised amendment of the Environmental Protection Law, on ChinaDialogue, an environmental organization based in London and Beijing,

The new law features a number of breakthroughs -

(a) For the first time ever, evironmental protection is accorded First Priority above economic development. Previously, the two were merely required to be co-ordinated,

(b) Major polluting companies must make the following information publicly available: main pollutants, methods of discharge, concentration and amount of emissions, excess emissions, as well as construction and operation of pollution prevention facilities. Those breaking the law will bear responsibility, along with the monitoring authorities concerned.

(c) The government is required to establish key areas cutting across administrative regions to integrate prevention and coordination systems for watershed pollution and ecological damage, as well to carry out unified planning, standards, monitoring and prevention measures.

(d) Environmental noncompliance will be subject to heavy fines on a daily basis, starting from the day after the correction is ordered,

(e) Environmental authorites are given unprecedented powers of closing down, seizure and detention of offenders.

(f) Enviromental Impact Assessments (EIAs) are extended to apply to regional targets with powers to refuse approval of any project which may result in such targets being exceeded.

(g) Public Interest litigation is allowed against offending projects, though not against monitoring authorities, enabling social organisations registered with the civil departments of governments above city level in selected areas to initiate public interest lawsuits.

One apparent Achilles heel of the new law is that local governments are in control of staff and resources of local environmental authorities. It is, however, much rumored that the Ministry of Environmental Protection will be greatly empowered, taking over environmental responsibilities from other ministries to integrate environmental management within one organisation. If this becomes a reality, the table will be truly turned on China's so-far unsuccessful battle against the nation's continuing ecological degration.

Are inclusive institutions the inevitable winner?

According to Daron Acemoglu and James Robinson's seminal book, "Why Nations Fail" (Profile Books Ltd, 2012), nations plagued by "extractive institutions" manipulated by vested interests historically proved to face decline or even collapse. Its conclusion points to the inevitability that Western democracies would win out in the end over autocractic regimes.

My earlier blog here posted a question comparing China and America - "Which superpower is more threatened by its “extractive elites”?

A recent book review by Michele Boldrin, David K. Levine and Salvatore Modica offers more insight into and in-depth analysis of the universality of Acemoglu's conclusions.

Download Book review of Why Nations Fail

For example, both Napoleonic France and Germany before the Second World War registered long periods of success as nations, while some "inclusive" democracies headed towards relative decline. It begs the question whether the answer lies more in institutions favouring innovation and competitiveness, both domestic and international, rather than purely being "inclusive". It also points out that inclusive institutions could equally be plagued by "vested interests" while "extractive" institutions could evolve over time to becoming more "inclusive".

As in a debate between "democracy" and "autocracy", sometimes the truth is muddled by labels. While there is much merit in highlighting the importance of institutions, the jury is still out whether inclusive institutions are the be-all-and-end-all pre-condition to nation's success or survival, as sometimes it is made out to be. More importantly, it begs the question whether more benevolent kinds of "extractive institutions" are indeed the key to driving a nation's resources to build infrastructural capacity at least during certain stages of development of some countries, as in the case of China.

An analysis of the pros and cons of China's One-Party rule can be found here

Star War weapons: China and US in global space arms race?

TV interview panel discussion on Inside Story with Aljazeera English Channel based in Doha on 15 April, 2014. Other panelists were Peter Roberts - senior research fellow at the Royal United Services Institute (RUSI) in London and Tim Brown - senior fellow at GlobalSecurity.org in Washington D.C.  RUSI is an independent world-renowned think tank in cutting-edge defence and security research, founded in 1831 by the Duke of Wellington.

China's Urban Dreams and the Regional Reality

In a series of research reports, the Economist Intelligence Unit (EIU) propounds on China's dramatic urbanization drive.

In a report dated March 2014 "China’s urban dreams, and the regional reality", here the EIU highlights the following findings -

(a) China's urban population will increase by 268 million between 2010-2030, to a total of 949 million. This accounts for a fifth of global urban growth, in line with the size of China's total population. Indeed, it masks a decline in urban population growth rates, dropping from an average of 5.4% p.a. during 1981-2010 to an average of 1.7% for the 2010-30 period.

(b) While the impact of the One Child Policy is crucial, economic and changing cultural factors are likely to remain key determinants of China's population growth. An immediate lifting of all birth restrictions would increase the total population by only around 25m against the base forecasts by 2030. Indeed, the population is likely to decline after peaking in the mid- 2040s.

(c) Huge regional variations will be the reality. Eastern China, led by Guangdong, will see its urban population increase by 124.4m over 2010-30 while Central China will witness a rise of 71.2m. One-fifth of China’s prefecture-level cities will lag behind with an urbanisation rate below 50%, while another one-fifth will exceed the key threshold of 80%, on a par with cities in developed economies.

(d) A number of expanding cities like Hefei and Wuhan in Anhui province are likley to become important centres of industry and consumption. However, cities in north-eastern and western China are likely to face mounting challenges in public infrastructure, such as mass transport systems, utilities, as well as education and health services.

In an earlier report dated 9 July, 2012, the EIU focused on "Supersized cities: China’s 13 megalopolises". Its findings here with a snapshot of these megapolicies include -

(a) While natural population growth has virtually grinded to a halt in smaller cities, megacitis continued to see their population rise sharply in recent years owing to rural migration.

(b) Not all megalopolises will reach middle-class status by 2020. The proportion of the population earning more than Rmb30,000—EIU's benchmark for middle-class status—now averages above 40% in greater Beijing, greater Shanghai and Shenzhen. By 2020 the 50% threshold will be reached by most of the megacity clusters. But greater Zhengzhou, greater Shenyang and Chongqing are likely to fail to reach the 50% mark by 2020.

The full EIU report on megapolicies is here.

Six megatrends that drive China today, for better or worse

In an excerpt from The One Hour China Book, investor Jeffrey Towson and McKinsey’s Jonathan Woetzel highlight here the following six megatrends that drive China today, for better or for worse -

Urbanizing a billion people
This is the largest migration in human history,with 300 m to cities already and 350 million more on the way

Huge manufacturing scale
The manufacturing base has increased more than 18-fold 30 years and is worth $2.2 trillion annually in value added

Rising Chinese consumers
An additional 200 million people will enter the middle class joining 300 million who have done so in the past 30 years

Money-and lots of it
The country has more than $15 trillion in bank deposits, growing by $2 trillion a year

The brainpower behemoth
Spending on education has doubled, and the number of graduates has increased more than 7-fold since 1998

The Chinese Internet
Although China has more users than any other country (550 million), penetration is comparatively low-but it's exploding

All of the above are happening so fast, on such an unprecedent scale, and are so inter-connected  that any pre-conceived notions of boom or bust are unlikely to tell the full story.

Implications of President Xi's visit to the European Union

Interview on RT London broadcast on 1st April, 2014 on President Xi's state visit to the European Union at a time of changing geopolitics and geoeconomics. Click here