Will Environmental Problems Hurt China's Economy?


The pollution in Beijing has forced the government to strongly suggest people stay inside. Reuters reported that air quality was so bad "pollution (was) 30-45 times above recommended safety levels." The problem likely will get better, temporarily, as weather conditions lower the numbers to figures that will still be too high by almost any standard. But the overall trend is bad. Pollution could be the Achilles' heel of the Chinese economy, more than inflation or economic trouble in the world's major countries are.

Because the causes of pollution, which include industrial waste and the use of coal in heating, are as much a problem in other large Chinese cities, the ability for people to go about their everyday lives is likely just as restricted as in Beijing.

China has 15 cities with populations in excess of five million. Many, like the largest metro area - Guangzhou - have been created by a buildup of industry. The likelihood in cities constructed, to some extent, around factories is that pollution in these regions is also very bad.

For Americans, it is hard to imagine what it means for people to restrict their movements around major cities. While air pollution levels in cities like Los Angeles and Pittsburg are too high by the measure scientists would like to see, the lives of the citizens in those cities go on without restriction. Pollution in parts of the United States, while concerning, will not hobble the American economy or cause restriction in factory activity or automobile transportation.

However, China's factory activity could be cut back considerably in some of its cities. Industrial growth could become its own worst enemy, as far as daily access to workers is concerned. The manufacturing might of the People's Republic will be undermined by one of its own byproducts.

Filed under: 24/7 Wall St. Wire, China Tagged: featured