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The flipside of China’s development

Updated On: Dec 05, 2006

All eyes are on China, as a rising economic giant, a new superpower, but it also bears the flipside of rapid development along three dimensions: trade, arms race harkening back to the Cold War era, and environmental pollution.

A stark assessment of China’s impact upon the world – surpassing that of the September 11 terrorist attacks on America – comes from the lesser known reality ofChina's entry into the World Trade Organisation (WTO) on December 11, 2001. This is according to David Zweig from the Hong Kong's University of Science and Technology. ,China signed off “sovereignty it had defended fiercely for millennia [and] basically accepted the fact that the outside world could tell it what it could and couldn't do domestically”.

Five years into China’s membership with the WTO have generated winners amongst the upper middle strata, but also negatively affected the livelihoods of hundreds of millions of farmers with lowered tariffs on agricultural produce, and fundamentally changing the country’s economy.

Li Zhongzhou, chief analyst at the Beijing-based EU-China Program for the Support of China's Integration into the World Trading System, said that the overall Chinese trade as a percentage of the gross domestic product, has risen from 44 percent in 2001 to 72 percent today, compared to the US 21 per cent.  WhilstChina’s exports have grown at an average rate of 29 per cent per year, according to David Dollar, the World Bank country director for China, “it's very unlikely that exports can continue to grow at that rate, now that China is a very large player in the world market”.

A change in China’s economy also implies a direct impact upon the world, as exemplified by the number of anti-dumping cases against China. According to Cliff Stevenson, a British-based consultant and a recognised expert on anti-dumping cases, “China's entry into the WTO has brought about monumental changes in global trade flows that it will take a long time to absorb…The anti-dumping cases are part of a painful transition period as the world grapples with the one-off challenge of accommodating China's uniquely sized economy”.

As other countries react against China’s economic change, another startling report revealed a possible damaging chain reaction of Cold War-like arms race between the US and China. Two arms control groups, the Federation of American Scientists (FAS) and the Natural Resources Defence Council (NRDC), observed that the Pentagon and US intelligence agencies had been 'embellishing' China's submarine and long-range missile capabilities to justify an arms build-up.

“The Pentagon has been sounding the alarm about China's nuclear intentions for a long time, but our analysis shows that they are overstating the threat,” said Dr Robert Norris, an NRDC nuclear weapons expert and co-author of the report. In response, China has started to modernise its forces, sparking the threat of “a dangerous action and reaction competition”.

Dr Hans Kristensen, project director at the FAS and lead author of the report, advised that China should be “more open about their plans, or they will continue to feed the perception among US military officials that they pose a significant threat”.

Elsewhere, the rest of the world also grapples with China’s environmental pollution woes – making the headlines almost every other month this year – with trepidation. According to Independent journalist Clifford Coonan, “strong economic growth led to a major increase in the discharge of major pollutants in the first half of this year [and] nearly all of the world's most polluted cities are in China.”

An International Energy Agency report released early last month, claimed that China will surpass the United States in 2009 as the biggest emitter of carbon dioxide, even as State Environmental Protection Administration (Sepa) Vice-Minister Pan Yue clarified in quick response that China’s coal-powered growth will “eventually,” but not as early as 2009, make it the world's top emitter of greenhouse gases

Vice-Minister Pan Yue also commented last week that China faces an environmental crisis that threatens to wipe out much of the gains of three decades of economic growth. “(We must) begin paying this debt now... rather than allowing it to accumulate and, ultimately, threaten to bankrupt us all…as realistic estimates put environmental damage at 8 to 13 per cent of China's national income each year [based on the country’s new green GDP initiative]” he said.

In spite of such cataclysmic tendencies, a more promising note is the country’s current drive to boost renewable energies and reduce pollution, even if the motivation, according to journalist Clifford Coonan, comes from “sound financial and political reasons”.

This year, China’s politicians introduced laws to allow alternative energy to meet 15 per cent of the country’s energy needs by 2020, and invested US$3.3 billion in renewable energy last year, making it one of the biggest investors in renewables in the world. China’s new-found green initiative is also receiving international partnership and support from the World Bank and corporations like General Electric and BP.

Sources:

China will be worst carbon emitter (The Straits Times, 11 November 2006)

The greening of China (Independent, 25 November 2006)

Official says China pollution crisis undermining growth (Reuters/ The Straits Times, 2 December 2006)

China’s Environmental Crisis (The Straits Times, 2 December 2006)

Five years after China joined WTO, world still reeling from impact (AFP/The Straits Times, 3 December 2006)

US 'overstating' China's military power (The Straits Times, 4 December 2006)