A China Carol

The Ghosts of China Past, Present, and Future

by JOHN PABON

In Charles Dickens’ holiday classic “A Christmas Carol,” Ebenezer Scrooge plays host to three unlikely guests. Transporting Scrooge to a more innocent era, the Ghost of Christmas Past reveals a time where childhood friends and family were more important than money. The Ghost of Christmas Present introduces Tiny Tim, a seriously ill child nonetheless overcome with the joys of Christmas. Looking ahead, the Ghost of Christmas Future paints a lonely death for the miser. With this, Scrooge pledges to change his ways. He undergoes a transformation taking him from despised to revered

China, too, is presently having to grapple with ghosts of its past in hopes of creating a more sustainable future. A half-century of economic progress at all costs has been replaced with some of the strongest environmental policies in the world. Behind the haze of smog emerges a global leader in sustainability. This new China is investing great sums into green technology, innovation, and a burgeoning service economy. In the spirit of Dickens, let’s follow China as it goes through its own cathartic, transformational moment in history.

The Ghosts of China Past

China has faced an uphill battle shaking off the ghosts of its past. The country is fighting 30 years of unfettered development, lax regulation, and a wild-west attitude towards environmental protection. The result? Images of smog-choked cities, purple-hued rivers, and slave labor etched into the minds of people the world over. Erasing these pictures will be no small feat. 

As the world’s factory, and with the GDP increasing ten percent year on year, few were willing to rock the boat of progress. By the mid-2000s, Chinese farmers were using 35% of the world’s nitrogen fertilizers. The misuse of this and other fertilizers, as well as pesticides, seriously impacted the country’s land and water table. The global obsession with the latest electronics meant villages in China’s northeast choked by graphite residue, the chief component of lithium-ion batteries. Further south, in China’s manufacturing heartland, unscrupulous managers drove employees to suicide through overwork and mistreatment.


At the same time, the world also treated China as its personal dumpster. The massive shipping containers filled with cheap goodies from China returned home filled with scrap and recyclables from overseas ports. Over time, this created a €4.2 billion industry. In the United States, for example, scrap is the country’s sixth largest export to China. Essentially, China became home to the world’s waste. While much of this could be recycled or repurposed, the unsavory conditions for sorters, and lax environmental management, detrimentally impacted the Chinese mainland. Earlier this year, China passed new regulations prohibiting the import of 24 varieties of this foreign solid waste.

Perhaps the biggest tipping point for China came in 2007. This was the year China overtook the United States as the world’s largest emitter of carbon dioxide, years ahead of predictions. It was then that the government put real focus on benchmarking the true extent of the environmental situation. By 2014, officials had found 60 percent of the country’s groundwater quality to be substandard and 16 percent of the land to be polluted. The British Shadow Minister for the Environment at the time summed attitudes up perfectly. Following a tour with Chinese mayors, she noted. “…they fear that the external world is pointing and laughing at the stage which China’s environment has reached – it’s a kind of loss of face.” This loss of face, more than anything else, has led to a new path for China.

The Ghosts of China Present

Tiny Tim, an ailing boy from the poorest parts of Industrial Revolution-era Camden Town, embodies the spirit of opportunity through adversity. Once mocked as the sick man of Asia, China has its own vision of opportunity on a cleaner, greener path. Premier Li Keqiang heralded the opening salvos of the country’s war against pollution in 2014. He noted ill health and thick smog as “…nature’s red-light warning against the model of inefficient and blind development.” Unlike Tiny Tim, however, China has been able to invest heavily in making their vision a reality.

Infrastructure and Green Investments

Where this is most apparent is in China’s massive investments in infrastructure and green technology. Take, for example, the country’s rail network. China currently has over 121,000 kilometers of rail lines. Over 20,000 of these are high-speed tracks, more than the rest of the world combined. Trains speed through farmland at 350 kilometers an hour, making car and airplane use increasingly obsolete. Not already satisfied with the world’s most extensive rail network, China will invest an additional €427 billion by 2020 on expanding service. Bloomberg reports this will connect 80% of the country’s cities, bringing inclusive development to often poorer inland centers.

The efficiency of the network was top of mind as the author sat on a New York City bound train from Boston this past summer. It took almost five hours to go the 346 kilometers between the two cities. Only a week before, the author had traveled the 1,200 kilometers from Shanghai to Beijing in less than four hours. There are now plans to cut this time down even further, widening the gap between rail transport here and the rest of the world.

Investments in clean energy also highlight just how committed China is to change its future for the greener. Since 2005, there has been a 15-fold increase in clean energy investment. In 2015 alone, China spent €86 billion. This was two and a half times more than the entire European Union, which has seen signif icant decreases in spending over the past five years. By 2020, China will be investing €328 billion annually on clean energy. This will not only significantly green the country, but also add an estimated 13 million jobs to the market.

Regulation and Rule of Law

This war against pollution would not be possible without changes to regulation and the rule of law. For the first time in 25 years, China updated its environmental protection regulations. A central tenet of the new law would be harsh penalties and a naming-and-shaming mechanism for highly polluting companies. Individuals would also face repercussions for their actions. These include management of polluting companies as well as Party leaders.

Since the revisions passed in 2014, the government has levied record-breaking fines on companies throughout the country. To date, over 18,000 companies have been fined a total of €112 million. Inspections have also led to the discipline of 12,000 officials to varying degrees. Although recent data shows nearly 60 percent of China’s companies still fail to meet environmental compliance standards, it’s clear this new net will eventually catch them.

Technology and Innovation

To ensure a healthy return on its green investments, China is also encouraging innovative uses of technology. When the author wakes up in the morning, the first thing he checks isn’t his Facebook or email. He opens his air quality app to look at pollution levels. And, it’s not only air quality that technology is making more transparent. Smartphones now inform people, in real time, the emissions from individual factories, polluted wastewater levels from specific waterways, and labor strikes in every province. A growing awareness of sustainability issues foments a virtuous cycle of advancement.

China is also doubling down on automation. Xi Jinping has called for a “robot revolution” that will spur domestic productivity. The country is investing billions into increasing China’s robot-to-worker ratio as a way to encourage a cleaner, greener supply chain. Guangdong, China’s manufacturwing center and home to a vast majority of the country’s factories, is leading this charge. Between 2016 and 2019, the province will invest €127 billion to subsidize robot purchases at 2,000 of its largest manufacturers. The goal is to automate 80 percent of the province’s factories by 2020.

The Ghosts of China Future

Scrooge’s most cathartic moment was attending a funeral with the Ghost of Christmas Future. Not only was the poor soul buried alone, but thieves also came to rob the grave. Disgusted by this, Scrooge insists on finding out who this man was and what deeds led to such an undeserving fate. On finding out the man was him Scrooge vowed then and there to change his ways.

For China, the writing was on the proverbial wall a long time ago. Seeing this, they have not only invested heavily into today’s China, but have set an innovative vision for the future forward. Made in China 2025 gives us a glimpse of what a future China will look like. It is one where the world’s factory is now the world’s premier service provider. This is a China that prides itself on innovation and leading the world in the creation of new ideas. It is a China no longer reliant on the whims of the export market, but one standing on its own two feet.

Made in China 2025 draws inspiration from Germany’s Industry 4.0 plan. It rests on the pillars of innovation, quality, and technological advancement to spur domestic competitiveness and intelligent manufacturing. While the goal is to advance the entire country’s economy, there is particular emphasis on ten key industries. These include information technology, automated machine tools and robotics, high-tech shipping, agricultural machines and food security, modern rail transport, and new-energy vehicles and equipment. All of this combined, according to Will Knight of the MIT Technology Review, aims to “…overtake Germany, Japan, and the United States in terms of manufacturing sophistication by 2049, the 100th anniversary of the founding of the People’s Republic of China.”

In making such public pronouncements and investments into a more sustainable future, China is very much in the middle of a Dickens-like transformational moment. They know where the past leads and are unlikely to go down that same road again. Not only would this run counter to the Government’s intended narrative, but also call into question the legitimacy of their intentions. All of this comes at an extremely interesting time for China and indeed the world. Nearly two years after the Paris Accord, with its own legitimacy and long-term sustainability spurious at best, China now has the opportunity to position itself as the de-facto leader in global sustainability. More than moving from the world’s factory to a service-oriented economy, perhaps this is the China for which the future should prepare.

Further information

John Pabon is the founder of Fulcrum, a strategic consulting firm focused on sustainability in Asia. He has spent the last 15 years promoting sustainable development and stakeholder engagement, including work with the United Nations, McKinsey, and A.C. Nielsen. Over the past six years, he has also chronicled the societal impacts of China’s economic rise in his blog, John’s Little Green Book, recognized as one o fthe world’s top 100 sites on China. He is a regular contributor to China-based business magazines and speaks to an array of global audiences on issues of sustainability and societal change. Fulcrum website: www.fulcrum22.com John’s Little Green Book website: www.johnpabon.weebly.com 

 

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