A Blame Game China Needs to Stop

By Elizabeth Economy, director for Asia studies at the Council on Foreign Relations (THE WASHINGTON POST, 03/12/06):

Last month the International Energy Agency announced that China would probably surpass the United States as the world's largest contributor of the greenhouse gas carbon dioxide by 2009, more than a full decade earlier than anticipated. This forecast could spur China to adopt tough new energy and environmental standards, but it probably won't. China has already embarked on a very different strategy to manage its environmental reputation: launching a political campaign that lays much of the blame for the country's mounting environmental problems squarely on the shoulders of foreigners and, in particular, multinational companies.

While still in its initial stages, the campaign has gained steam over the past month. Senior Chinese officials, the media and even some environmental activists have charged multinational firms and other countries with exporting pollution, lowering their environmental manufacturing standards and willfully ignoring China's environmental regulations. Faced with growing international and popular discontent over the country's environmental crisis, China's leaders are tapping into anti-foreign and nationalist sentiments to deflect attention from their own failures.

In late October a top environmental official, Pan Yue, accused the developed countries of "environmental colonialism": of transferring resource-intensive, polluting industries to China and bearing as little environmental responsibility as possible. At the same time, a leading member of China's National People's Congress claimed that foreign companies were not only exporting their waste but also underpaying Chinese workers. When a Chinese nongovernmental organization released a list of 2,700 companies cited for violations of China's water regulations in late October, the ensuing media frenzy focused exclusively on the 33 multinationals, including 3M, Panasonic, PepsiCo and DuPont, and ignored the more than 2,600 Chinese companies similarly cited. Not surprisingly, Chinese bloggers have taken up the call, discussing the "eco-colonialist" policies of multinationals and calling for "eco-compensation." Even environmental activists who have worked closely with multinationals have accused these corporations of not practicing what they preach.

The logic behind the campaign is simple, if misguided. The rapidly approaching Olympic Games have brought an unwelcome spotlight on China's environmental situation. Beijing won its Olympics bid with the promise of the world's first "green" games. Five years later, there is no talk of a green Olympics, only of how extensive a shutdown of industry and transportation will be needed in Beijing and surrounding provinces just to ensure that the athletes can breathe. Moreover, the climate issue has focused the world's attention not only on China's contribution to global warming but also on its role as the largest contributor to a range of other global environmental problems such as ozone depletion, the illegal timber trade and marine pollution.

Perhaps nothing is more troubling to China's leaders, however, than the environment's contribution to domestic social unrest. In May, China Daily reported that there were 50,000 environmental protests in China in 2005. Some of these demonstrations engaged upward of 30,000 people and resulted in serious injuries and even deaths. In such a climate, scapegoating foreigners can be an attractive policy option.

Certainly, as with most Chinese political campaigns, there is a kernel of truth in some of the accusations. The multinational companies listed should take greater care to ensure that their own factories and those of their suppliers operate under only the highest standards.

Yet, overwhelmingly, China's environmental crisis and its contribution to global pollution are of its own making. Most Chinese businesses are clearly unprepared to be environmental leaders. China's coal-based and largely state-owned power sector, for example, is the No. 1 source of China's air pollution. In a recent poll, only 18 percent of Chinese companies supported the idea that they could both thrive economically and do the right thing environmentally.

China's leaders need to educate and reform Chinese industry, but beyond this they must establish an incentive structure to make it easy for local officials and business leaders to do the right thing. They need to open the door to greater transparency, official accountability and the rule of law to ensure effective environmental governance -- a step they have avoided taking for fear of diminishing their political power.

The environment has been one of the most fruitful areas of cooperation between China and the rest of the world for almost two decades. Billions of dollars in environmental assistance have flowed to China from foreign governments and international organizations. In most cases, multinational firms have been at the forefront of raising China's environmental standards, transferring best practices and cutting-edge technologies, and supporting a range of broader environmental initiatives. China should not risk all this -- and its own environmental future -- for the short-term and largely illusory benefits of playing an environmental blame game.