Portion of the coal is used in small, inefficient furnaces and boilers which emit high densities of particulates out of low chimneys. This is particularly true of domestic heating, which contributes more than its fair share of air pollution, and even causes pollution inside houses in districts where the air quality outside is satisfactory.
Although coal is the main source of China's urban air pollution, motor vehicles are another factor. China has relatively low emission standards for motor vehicles. Although the number of vehicles in Beijing is only one-tenth of Los Angeles or Tokyo, vehicle pollutant levels are about the same. China also uses leaded petrol, contributing to levels of lead in the blood of city children being significantly higher than the levels considered harmful to their intelligence and nervous systems.
The quality of surface water and, increasingly, shallow groundwater, is very poor, particularly in north China. About half of the monitored river sections in the north are unfit for any use, and only eight per cent is fit for human contact. South-ern rivers are less polluted, largely be-cause they carry more water.
peakers at the 1997 China Environment Forum held last month revealed how concerned Asian countries are about the amount of pollution China is discharging into the environment. China's air pollution was blamed for about half of the acid rain that falls on East Asia with carbon dioxide emissions threaten to become a major cause of global warming. Pollution brought to the ocean by the Yangtze River could decimate. fish stocks in the East China Sea.
Official statistics confirm that China is one of the most polluted countries in the world, and foreign visitors are struck by an apparent deterioration of air quality in major urban areas. The beautiful colours of sunrise and sunset produced by the smoke and dust in the air cannot compensate for the discomfort and danger of breathing in the acrid reek of coal. But there are forces at work to contain and reduce this pollution and the over-all situation, though bad, is not deteriorating as quickly as might have been expected given China's poverty and rapid economic growth.
Coal and car emissions
The air in China's major cities contains quantities of particulates and sulphur dioxide that reach levels two to five times greater than World Health Organisation guidelines (see table). The prin- I cipal reason is the combustion of coal ?in 1995 coal's share in primary commercial energy consumption was nearly 80 per cent, and the proportion has been increasing in recent years. Electricity generation accounts for only 30 per cent of coal consumption, with boilers, furnaces and kilns taking 50 per cent. Much of the rest is used for domestic heating and cooking.
Washing coal before burning would reduce pollution emissions but only 10 per cent of Chinese steam coal is washed, compared with 75 per cent in Europe. As a result, the average ash and sulphur contents are significantly higher than those of internationally traded steam coal and its heating value is lower. A large pro-
The most serious problems are in smaller rivers in urban and industrial areas ?about 80 per cent of China's urban river water is polluted. Shanghai has adopted a plan for its notorious Suzhou Creek to restore life to its waters and make the creek an amenity for transport and tourism. The plan involves diversion of effluents and sewage entering the creek to water treatment plants, closure of the old docks, dredging of the silt de-posited on the river bed and aeration and introduction of clean water.
Many more rivers remain untreated, such as the Xiaoqing River which flows through Jinan and Zibo cities and past the Qilu Petrochemical Plant in Shandong province. The river is now almost dead, with virtually no dissolved oxygen. It is also badly polluted with industrial effluent, which contributes 70 per cent of the total pollution load. This is an extreme example, but other rivers in the industrial north and north-east, such as the Hai, Huai, Luan and Daliao, are all seriously polluted, with large sections of their water unfit for drinking. The Yangtze River's most polluted stretches, a 1993 survey found, were around Chongqing and in its estuary north of Shanghai. The latter shares with Hangzhou Bay a plague of 'red tides' occuring between two and 10 times a year. These consist of large blooms of red-pigmented floating plants which kill fish and shellfish.
China's drinking water contains fewer disease agents than in other Asian countries at similar income levels and the contribution of water-borne diseases to the overall death rate is smaller than that of chest and pulmonary conditions. However, the pollution of local surface water resources is contributing to restrictions in water supply for local industry and agriculture and increasing the cost of finding alternative sources of supply.
Acid rain has deposited concentrations of acidic compounds in Sichuan province and parts of eastern China that exceed the level that produces long-term damage to the ecosystem. The highest concentrations are around Chongqing, where a 1993 survey by the local environmental protection bureau found that 23 per cent of the vegetable crop was damaged by acid rain. In addition, highly acid
tion of controls and subsidies on prices of energy and raw materials, which has raised the price of coal, for example, close to its cost of production and transport. Thus the amount of energy consumed per unit of GDP has fallen by half over the past two decades.
The nation's opening to foreign trade and investment has enabled domestic enterprises to import technology and equipment which is, in general, more efficient and less polluting than domestically produced equipment. Finally, light industries, which are generally less polluting, have been expanding faster than heavy industry, reducing the degree of environmental damage associated with increases in total industrial output.
These trends are likely to continue. China's rapid growth and high degree of investment means that the share of older, dirtier equipment in the total capital stock will continue to decline, as newer, cleaner machinery is installed.
The policies for restructuring industry and reforming the state-owned sector outlined at the recent Communist Party Congress, will reinforce this virtuous spiral and should further reduce the environmental impact of continuing economic growth. The process of amalgamation and rationalisation to reduce the state-owned sector to a core of large concerns should produce industrial units large enough to provide the economies of scale necessary for efficient use of raw materials and for installation and operation of the best abatement technology. Many smaller enterprises are likely to be closed or reorganised, removing a significant contributor to China's pollution.
Stock exchange listings and other fund-raising initiatives by enterprises will enable them to buy less polluting equipment, while trade liberalisation will make it easier for Chinese concerns to import foreign equipment.
The Chinese government's environmental policies and legislation can also take some of the credit for holding back the growth of environmental degradation. China started taking environmental protection seriously in 1979 when the first environmental legislation was enacted. This has been followed by legislation covering air, water, solid waste and noise pollution and protection of the natural environment. Machinery for setting and enforcing standards has been established by the National Environment Protection Agency under the State Environment Protection Commission at national level, and environmental protection boards at provincial and subordinate levels.
Weak law enforcement
China can point to considerable gains, especially among large industrial enter-prises which have been the focus of enforcement. The proportion of waste-water from big industry that receives some treatment, whether primary or secondary, increased from around 20 per cent to 77 per cent between 1985 and 1995. Over the same period, the proportion of smokestack emissions from large companies which receive dedust treatment increased from around 60 per cent to 80 per cent.
However the rules and enforcement measures contain several flaws which have limited their effectiveness. In the water pollution area, enforcement efforts have been concentrated on industrial wastewater discharges ?overlooking the question of municipal wastewater, only seven per cent of which is treated. Claims of success in reducing industrial pollution referred to improvements made in enterprises 'above the county level', as the government targeted large industrial enterprises. Enforcement machinery was largely ineffective against township and village enterprises, which in the 1980s and early 1990s were the fastest growing sector of the economy. Rerain reduces the growth of forests, E significant in south-west China which is an important source of timber.
This burden of pollution has economic consequences. The World Bank's recent publication China 2020 0 Clear Waters, Blue Skies quantified the total cost of air and water pollution to China as US$53.6bn a year, or nearly eight per cent of GDP. The impact on health by urban air pollution 0 accounted for about 60 per cent of the total. Respiratory illness caused by urban air pollution was responsible 0 in 1995 for 178,000 premature deaths, 346,000 hospital admissions and 4.5m 0, person-years absence from work.
China's levels of pollution are perhaps not surprising given its situation. The per capita resource base is very low by international standards, with 22 per cent of the world's population living on just seven per cent of the world's agricultural land. Shortage of water is particularly severe, with per capita water resources less than one-third of the world average. There are big regional differences ?northern China has only one-fifth the per capita water re-sources of southern China.
Experience of newly-industrialised countries indicates that high levels of pollution might be considered as normal at this stage of China's development. Indeed, the question is perhaps why they are not higher, since the economic growth of the last two decades has not been matched by a proportionate increase in environmental degradation. Pollution intensities and emissions per unit of output have fallen over recent years. Since the 1980s, in a period when coal consumption has doubled; particulate emissions have remained roughly constant. Over the same period sulphur dioxide emissions have increased, but the air concentration has declined or remained stable, probably because of taller chimneys. During the 1990s water quality in the major rivers has been held constant, while some of the worst examples of pollution in lakes and minor rivers have been cleared up.
Much of the reduction in pollution in-tensity is an indirect result of China's economic liberalisation. Exposure to competition and the drive to make prof-its in a market economy has encouraged enterprises to use inputs more efficiently. This has been reinforced by the reduc search showed that smaller units, including these local enterprises, created more pollution per unit of output and thus contributed a disproportionate share of the pollution burden. Perhaps as a con-sequence, policy changed in 1996, when the government initiated a campaign which resulted in the closure of 60,000 township and village enterprises which were classified as heavily-polluting.
Even with enterprises above the county level, the rules have not been en-forced uniformly. Commonly a levy is imposed on enterprises whose discharges exceed a certain standard. The proceeds are supposed to be used to fund investment in improving standards such as assistance to offending factories to in-stall new abatement technology.
Foreign investors complain that local enforcement agencies crack down harder on them than on their 'dirtier' domestic counterparts. This may be justified, as recent estimates by the World Bank have shown that state-owned enterprises generate more pollution than non-state enterprises of similar size in the same industry. The suspicion is that local governments favour the factories which they themselves own, fearing that action might reduce their profits or even force them to close. Where levies for excessive .discharges are imposed, they are often set'at a level far lower than the cost of installing and operating abatement equipment and they have not been in-creased in line with inflation. As a result, factory managers have tended to treat the levies as a pollution licence.
More complete legislation
The campaign against township and village enterprises illustrates another weakness in the implementation of policy ?a tendency to respond to perceived crises by ad hoc action. An example is the campaign to clean up the Huai River in Anhui and Jiangsu provinces. In 1995 pollution in the river had become so severe that its water was completely unusable. The in-habitants of cities that relied on the Huai for drinking water had to buy mineral water for drinking and cooking, while farmers that relied on it for irrigation lost their crops. Crowds of farmers besieged polluting factories and the government responded by setting up a special agency to co-ordinate action.
Government policy on the environment is also developing in a more logical way. First, legislation is being revisedto make it progressively more strict and more complete. The Amended Air Pollution Prevention and Control Law of 1995 includes tougher controls on sulphur dioxide emissions than the original law of 1987. The principles on which policy are being based are changing too. China was among the first nations to adopt the conclusions of the United Nations' Rio conference in 1992, and in 1994 the State Council approved China's Agenda 21, which laid out major policies for sustainable development.
Tapping foreign capital
The Ninth Five-Year Plan (1996-2000) included a plan for environmental protection, the first in China's planning history, which set ambitious targets for containing pollution at present levels or with in-creases well below the planned growth in the economy. Wastewater discharges are to increase by no more than 14 per cent between 1995 and 2000, while emissions of particulates and sulphur dioxide will remain the same. Finally, leaded petrol will be phased out by 2000. The long-term goal for 2010 is to clean up drinking water in major cities and to ensure that urban air is significantly clearer than today. The degradation of major river basins and the worsening of acid rain should also have been brought to a halt.
To achieve these objectives the government is increasing its spending on environmental protection. The National
Paper pollution Paper and pulp are one of the biggest contributors to pollution ?in 1995, they contributed 42 per cent of the chemical oxygen demand pollution in industrial wastewater. The water pollution law of 1996 forbade establishment of new paper mills without wastewater treatment facilities.
China is the world's third largest pa-per manufacturer. It has over 10,000 paper mills, most of them small to medium-sized town and village enterprises, producing paper from straw pulp and using inefficient plant without pollution control equipment. Paper manufacturing involves chemicals called lignin and saccharides that are a necessary part of the process, but not part of the finished product, and they are discharged in the wastewater, forming a thick black liquid.
Pollution from the more than 1,000 paper mills along the banks of the Huai Environment Protection Agency estimates that the current level of spending is around US$9.7bn, or about 0.85 per cent of GDP, but that to be effective it needs to be around 1.5 per cent of GDP. A report by the Regional Institute of Environmental Technology of Singapore and Hong Kong's Fintrade-Mercer Group estimates the total bill for cleaning up the environment as US$34.5bn.
The Chinese government hopes to tap foreign capital and expertise to increase spending on pollution control. Japan, concerned about acid rain, is assisting the introduction of filters to reduce emissions from factory chimneys, and in September announced a new form of soft loan for environmental projects. China wishes to involve other countries and used the recent China Environment Forum to appeal for assistance in promoting cleaner production. However, reaction from foreign investors was not enthusiastic and the Chinese were told that they would have to pay the costs of introducing cleaner and more efficient technologies.
Although the trend of economic development is reducing part of its impact, action will be needed to control pollution. At present, China needs to import foreign capital and technology to help it control the pollution that is poisoning its air and water. To do so, China must address the questions of costs and returns and show greater appreciation of the concerns which confront foreign investors.
River in Anhui and Jiangsu provinces was a major factor in that rivers water-quality crisis. As part of the action to clean it up, all paper mills with an annual capacity of less than 5,000 tonnes were ordered to close down. Local managements resisted with the connivance of their local authorities, so clean-up teams resorted to extreme measures such as withholding electricity. In addition, small paper mills were targets in the 1996 campaign to close down the worst polluters among township and village enterprises.
Large paper mills are meeting pollution abatement requirements by importing foreign paper manufacturing equipment. This year, for example, Valmec of Finland and Potential Industries of the US won contracts to supply paper-making plant to Chinese concerns. Small plants are offered hope by a new process devised by Chinese scientists that extracts the lignin and saccharides from waste-water, enabling the water to be recycled.