Special Reports
China's Pollution Worsening And Survey Says That's Bad For Business

China Law Blog
August 30, 2006

A recent Wall Street Journal, bluntly titled, "China Reveals Pollution Getting
Worse," [subscription may soon be required], details how, despite efforts from
Beijing, both China's air and water pollution are worsening and its use of
energy is increasing:

China's environment has grown markedly worse during the past five years with
rising levels of sulfur dioxide, acid rain and water pollution -- despite
repeated promises by the central government to fix the problems. Emissions of
sulfur dioxide from steel mills and power plants nationwide rose 27% between
2000 and 2005 to 25 million metric tons -- double what China's environment can
handle -- and continued to grow rapidly in the first half of this year,
according to a report to China's top legislature.

* * * *

Water pollution also was worsening, it said. Total wastewater discharge
reached 52.4 billion tons last year, 26% more than was released in 2000. Many
wastewater-treatment plants aren't working while other localities still don't
have any such facilities. One-third of the water-monitoring stations in China
have found dangerous levels of pollution, and many rivers and lakes are far
past their capacity to absorb.

* * * *

Coinciding with the government's dark assessment of its environmental record,
another official warned that China would fail to reach this year's target for
ramping up energy efficiency. The government promised to cut the amount of
energy needed to produce economic growth by 4% this year, part of a plan to
increase overall energy efficiency 20% by 2010. But so far this year, the
official said, China has been using even more energy than last year.This
obviously bodes ill for China. Indeed, a recent A.C. Nielsen survey of
executives located in Hong Kong, revealed that Hong Kong's "polluted air is
driving away foreign professionals and threatening international investment."
The survey of 140 executives with member companies of the Hong Kong's American
Chamber of Commerce "found almost four out of five business leaders knew someone
who was thinking of leaving or had left the territory because of the poor
quality of the environment." The survey revealed 95 percent of respondents
"were personally worried, or very worried, about the air quality in Hong Kong
and the potential long term effects on the health of themselves and their
children." More than half of the respondents personally knew professionals who
had declined to move to Hong Kong because of its pollution and 79 "felt that
based on environmental trends, Hong Kong's level of attractiveness to foreign
investors is decreasing, and 59 percent thought a worsening environment might
eventually cause their companies to invest more money elsewhere." On the flip
side, "56 percent believed their companies would invest more money in Hong Kong
rather than other parts of Asia if Hong Kong had a cleaner environment and
better air quality."

No reason to believe the executives in or planning to go to the Mainland would
test out any differently.

For various perspectives on China's pollution problems, check out some of these
posts as well:

1. China's Urban Water Supply Threatened by Pollution, Poor Management
2. The Great Urbanization
3. Is China's Growth Getting Out of Hand?
4. The Downfall of the Dragon?
5. Letter from Beijing: A Solar Generation

It makes sense that Beijing is shifting the CBD to tianjin in order to reduce
this city's pressure.

investors might lost their interests to spend money on this polluted city. but
this city is still building more CBD, building more aprt for the floating
I would love to hear your opinion on Beijing's realty business. it is
interesting all my friends are talking about buying a place in Beijing.


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