A May 1999 report from U.S. Embassy Beijing
Rational pricing of water (now priced at about one-fifth real cost) and other natural resources, protection of individual economic rights and greater popular participation will help solve China's sustainable development dilemmas conclude two Chinese Academy of Social Sciences researchers in the October 1998 PRC sustainable development book "Grave Concerns". This report concludes a six part summary of "Grave Concerns". As China celebrates the 80th anniversary of the May 4th movement student-led democracy movement, the conviction is spreading that not just science but also democracy is essential to the sustainable development of China. End summary.
"Grave Concerns -- Problems of Sustainable Development for China" [Shendu Youhuan -- Dangdai Zhongguo de Kechixu Fazahan Wenti] is a volume in the influential China's Problems Series. "Grave Concerns" was published by Today's China Publishing House in October 1998. Authors Zheng Yisheng and Qian Yihong are the Vice Director and the Secretary-General of the Environment and Development Research Institute at the Chinese Academy of Social Sciences. In this installment, a better translation of the title of the book is "Grave Concerns" used here vice "Severe Hardships". The first five parts of this series are on the U.S. Embassy Beijing web page at http://www.usembassy-china.org.cn/english/sandt/index.html
"Grave Concerns" provides not just a deep analysis of the problems of sustainable development but also ranks these problems.
Obstacle #1 The biggest obstacles are unrealistic economic goals defined in economic terms (GDP) which are then exaggerated at lower levels. Economic growth goals need to be relaxed, said Zheng. The development ministries such as the State Development Planning Commission, the State Economic and Trade Commission are much more powerful than the protective ministries such as the State Environmental Protection Administration (SEPA), the State Forestry Bureau (although some Chinese experts say that Forestry is more of a forest-exploiting than a forest-protecting agency.)
Obstacle #2 The second greatest obstacle to sustainable development is the private interest group-like behavior of ministries and local governments. This results in conflicting goals as each ministry and local government seeks its private advantage first and prevents a coherent policy from being implemented. This second obstacle is related to the weakness of law and the ineffectiveness of the central government in imposing policy upon different ministries and upon local government.
Obstacles #3 The third obstacle is the widespread corruption of Chinese government officials. This is closely related to obstacle #2 above. The perception of widespread corruption by government (that the government does not obey the law) probably also makes it harder to persuade Chinese people to comply with laws and weakens the authority of government generally.
Obstacle #4 The fourth obstacle is the poor quality of decision-making by Chinese government officials. This fourth obstacle is due to limitations in personal integrity, education and knowledge of many officials [Note: The Chinese term that expresses a person's quality (suzhi) is a blend of personal integrity, education, and general knowledge. End note] but also to the poor quality of the statistics they base their decisions on. Some Chinese academic say that the elimination of the social sciences from university curricula in the early 1950s (but making a comeback today) has resulted in very narrowly educated officials and scientists who don't understand the big picture. Premier Zhu Rongji's government in 1998 launched a campaign still underway to stop the widespread falsification and exaggeration of statistical data that local governments send to the central government.
"Grave Concerns" is written for a Chinese audience and so focuses on problems rather than progress. China's steady improvements in energy efficiency and declining pollution per unit of energy and industrial consumption are mentioned but not stressed. "Grave Concerns" is one volume in the China's Problems Series written mostly by scholars at the Chinese Academy of Social Sciences. "Grave Concerns" shares the perspective of He Qinglian in her "Pitfalls of Modernization" [Xiandaihua de Xianjing] that China's basic problems in the very structure of its political and economic system. This perspective is certainly not unique to these books: ESTOFF has heard the same refrain from Chinese officials, business people, and people in the street. This very broad consensus that the problem is the system is a very powerful and indeed a steadily growing force for change.
The authors' calls for change driven by pressure from below may not seem realistic to the foreign reader. Yet radical changes in the Chinese system including the institution of the responsibility system were driven by pressure from below and later co-opted by local and national-level officials. The contract responsibility system began with the conspiracy of Anhui Province farmers to secretly divide collective lands and assign to individual farmers. The farmers were later supported by Anhui Province governor Wan Li and later in Sichuan Province by Zhao Ziyang. Only later did these reforms become the national policy promoted by Deng Xiaoping.
A central government official recently made the point to Embassy Beijing Environment, Science and Technology officer that pressures from below were co-opted by local and then national officials. The official said "in the late 1970s Chinese farmer would say "If you want rice, look for Wanli; if you want food, look for Zhao Ziyang" [Yao mi, zhao Wan Li; Yao zhao liang, zhao Ziyang". Some Chinese historians argue that the farmers in Anhui Province were the first to demand change because Anhui Province suffered the most in the 1960 - 61 famine that killed 30 million people. In many instances it seems that Chinese leaders have preferred to call actions taken because of necessity and pressure from below as a brilliant innovation by the Chinese leadership.
Chinese economist He Qinglian, in her "Pitfalls of Modernization" [Xiandaihua de xianjing], widely considered one of the best Chinese books of 1998 and highly praised by professional economists, makes this same point [on p.85 in the first edition of January 1998 published by Today's China Publishing House]. She writes "People who study the history of Chinese reform over the past 18 years find that China's economic reforms were forced by pressures from below. Reform came when the government was unable to maintain the present order and had no choice but to give up some power. Eighteen years ago the farmers were unable to make a living; the Chinese government was forced to give up control and allow the farmers to implement the household responsibility system. When the government found itself unable to solve the problem of urban unemployment it was forced to allow private people to start businesses and to permit the establishment of the township and village enterprises."
"Grave Concerns" as part of the China's Problems' Series which has attracted wide attention for its deep analysis of China's political, economic, social and environmental problems. Today's China Publishing House, the publisher of the series, also published "Political China", an influential collection of essays calling for political and legal reform in August 1998. The China's Problems series grew out of a 1996 conference that produced the twenty-seven essays that appeared in the April, 1997 book "The Critical Time: Twenty-Seven Problems of Contemporary China That Require an Urgent Solution" [Guanjiande Shike]. Today's China Publishing House is part of the Wai Wenju [Foreign Literature Bureau] a government organization subordinate to the Foreign Expert's Bureau that specializes in publishing foreign-language versions of Chinese government publications. When the Embassy EST section called Today's China Publishing House in February 1999, they said at that time the publishing house had no plans for future books.
Embassy Comment: "Grave Concerns" focuses on the social, economic and political aspects of sustainable development. Like science and technology, sustainable development is often viewed as a scientific or technical problem. China has many scientists and engineers in high positions from electrical engineer President Jiang Zemin on down. Deng Xiaoping's statement that "science and technology is the first productive force" is widely quoted. The worship of science and technology [scientism] has been an important thread of Chinese communist ideology that perhaps goes back to Engels and his dialectics of nature.
The "information economy" [zhishi jingji] is now perhaps one of the top buzzwords of today's China and the topic of dozens of books. Yet the problems (very low productivity, intellectual piracy that greatly reduces incentives for invention, barriers to innovation and spread of new technologies within China etc.) of science and technology are not merely internal to science and technology S and T but are rooted in larger problems of China's social, economic and political system. It is this broader view which connects the big systems picture to the specific runs through "Grave Concerns". The student movement of May 4, 1919 called for China to rely on not just "Mr. Science" but also "Mr. Democracy" to build a newer China. Eighty years on, these ideas are again gathering force from many ripples of individual initiative and energy that are combining into an increasingly more powerful force.
Page numbers in the summary translation below refer to the first edition of "Severe Hardships" published as a volume of the China's Problems series by the Today's China Publishing House [Jinri Zhongguo Chubanshe] in October, 1998.
Additional background information on Chinese environmental issues can be found among the ninety unclassified Embassy Beijing reports posted on the U.S. Embassy web page at http://www.usembassy-china.org.cn/english/sandt/index.html Some informal translations from the Chinese press bearing on the Chinese environment are available at http://www.usembassy-china.org.cn/english/sandt/sandsrc.htm Several reports on new path breaking books available in Beijing are available at http://www.usembassy-china.org.cn/english/sandt/bjbkwrm.html
The deteriorating state of the Chinese resources, ecology and environment is a "tragedy of the commons". Many people think that if "I don't steal (public resources) first, someone else will". The previous chapter showed the very sharp contradictions between sustainable development for China and China's present system. We must focus our attention on the reform of China's economic and political system. Our starting point is this: a good system cannot be one that encourages short-sighted economic activity and destroys the basis for the long-term sustainability of society.
A practical sustainable development policy is one that is at once technologically, economically and politically practical. Very often the problem in China is not the lack of technology or of skilled people but an economic or political problem. Thus China's technological potential is not being realized because of economic and political obstacles.
Sustainable development for China means assuring a decent living for its people and solving the problem of industrial pollution. This industrial pollution includes greenhouse gas emissions (a problem which the U.S. and other industrialized countries haven't solved but are putting a lot of pressure on China to solve) and the steadily worsening acid rain problem caused by sulfur dioxide emissions. The developed countries are very concerned about these problems but much less about problems specific to the developing countries such as providing good drinking water to farmers.
Sustainable development projects should include financial evaluations and social and economic feasibility studies. Environmental and social impact studies (that is the environmental and social cost to be paid for development) are often not done in China or are done in a very superficial manner. In some areas large sums are being spent on protecting wildlife even to the point of compensating farmers if a protected animal eats livestock. Laws and regulations to protect wildlife are improving but the overall the problem of local powerful people or organizations putting themselves above the law is still very common.
Chaotic, uncoordinated development in the developing countries is only to be expected since they are trying to copy the developed countries. In trying to copy another country, a country is not evolving organically according to its own conditions but trying to jump ahead. The developed countries want the developing countries to adopt advanced practices but sometimes they don't consider that the developing country has not yet developed into a real market economy. There are practices which involves catching up and there are practices which are a new departure. Failure to distinguish between the two causes a lot of confusion.
The concept of accepting that countries at different stages of development have different responsibilities makes it possible to accommodate a variety of different viewpoints some of which are mutually contradictory. We reject both the overly idealistic approach of evaluating China's situation which, from a foreigner's viewpoint, would mean condemning nearly everything. But we also have to reject the mechanistic stages of development theory which can accept any idiocy and dishonest behavior with a casual "that is just to be expected in the initial stages of development". We need to avoid the idea that one ministry or one part of society has the key to solving our problems. We need to be open to a wide range of ideas. [pp. 280 - 285]
Some people say that the market economy is the main cause of unsustainable development and the environmental protection must depend upon the government. These are misunderstandings. Very often economic methods such as pollution permits are the most efficient way to protect the environment. The basic nature of Chinese pollution is changing so economic methods are becoming more and more appropriate to the Chinese situation. Chinese pollution is becoming less big point source pollution and more widely dispersed non-point pollution. Just as the proportion of industrial pollution in Chinese pollution declines, pollution from daily consumption patterns is growing.
Markets and prices which incorporate externalities (the social cost of pollution) are effective in reducing pollution. In China subsidies for water and power result in much waste and inefficiency. And as a top priority, China needs to solve the destruction of the environment caused by low production efficiency. The developed countries plan their environmental policies so that they do not (especially in price structures) conflict with the competition of the free market.
The deterioration of China's resources, environment and ecology can largely be traced to a "Tragedy of the Commons". There are often calls to manage public property more effectively. But changing the property system or even privatizing collective property would be much more effective. The problem of the ownership of China's environment and resources has three aspects: there is a confusion of responsibilities between different levels and the ownership is not clear; some areas need to make a new determination about which collectivity owns the resources; and the separation in fact if not in law between ownership and use.
The consequences of these problems of ownership can be seen in the ravaging of national parks. It can be seen in the local government leaders who appropriate collective natural resources for their own businesses. These is a steadily increasing competition between all levels of government and among ministries for these resources. Power brushes the law aside. Practical questions of ownership are decided by force. As long as the private and public property rights are not clearly separated and private property is not secure from misappropriation by the government, the market economy cannot become established and sustainable development will not be possible for China. [pp. 286 - 291]
This book has stressed that the short-term interests of individual units should not harm the foundation upon which the welfare of society rests. Yet the welfare of the entire society is also built upon the respect for the interests of individuals. Adam Smith two hundred years ago explained how in a market economy each person seeking their own interests can objectively advance the interests of the whole society. Two hundred years of history demonstrate that the protection of autonomous and voluntary economic activities and of individual rights is an indispensable condition for prosperity.
Under the planned economic system China built many important projects but it suppressed individual economic rights and freedoms. China failed to create a contract-based economic system. Economic activities were supposedly in the interest of the whole, yet there was much laziness and doing business in the name of the whole but actually for a private interest. This not only sapped the vitality of the economy but also the protection of publicly-owned environment and natural resources weakened steadily.
Market principles are important yet many scholars in the U.S. and other developed countries caution that we must be aware of the limitations of the market as well. Not just creating a market economy, but also changing to a political system capable of guiding production in a socially responsible manner is needed. Some scholars are trying to find a third way that combines the market's allocation of resources with the capacity of socialism to make policies for the whole and to allocate incomes. There are some who would rely on the market for everything -- "a market economy" and others who see the market as a means "an economy with a market". China cannot simply repeat the one hundred years the western countries spent to build the market capitalism of today. China not only has to try to catch up but also to try to come up with innovations as it creates its own market economy.
In the United States, the President's Council on Sustainable Development concluded in 1995 that planning, predicting and preventing problems is much more effective than trying to solve them after the problems after they occur. China, a country where the rule of law hasn't been fully established yet, needs planning even more. Creating plans that can actually be implemented will depend upon the solution of the problems of the divorce and barriers between local administrations, and upon the harmonization of strong market forces with the goals of protecting mountainsides and waters and alleviating poverty.
There are no pure market economies and no purely planned economies. In the United States, the focus of environmental protection effort switched from government orders to economic methods to alleviate pollution. Economic methods such as pollution fees proved to be a much less expensive means of achieving the desired result. Macroeconomic policy is important for economic development. A market economy without planning and guidance or an economic plan that is not market-based will certainly fail. We have to get rid of the old habit of thinking "if it isn't this, it must be that." Macroeconomic planning and individual initiative and economic freedom are not either/or. They are both/and.
Popular participation is a fundamental principle of sustainable development. Corrupt local officials who ignore the rights of the people to make deals with outside developers cause many problems. Since both the law and supervision over government actions is weak, people have a hard time protecting their rights. Clear property rights, be they private property rights or collective rights, help protect the environment and natural resources. [pp. 292 - 303]
The public's understanding of China's environmental situation and participation in decision making is key. The solution can't come from the government. Visitors from rich countries sometimes remark on the wastefulness of big Chinese banquets. Sometimes the people of the rich countries seem to be more concerned about economizing than people of a poor country like China. People need to adopt values of self-restraint. Laws can't make officials honest. Only self-restraint on the part of officials can produce honesty in government. [pp. 304 - 310]
Yet there are already many Chinese devoted to the environment and conservation. People like Zhita County, Qinghai Communist Party Vice Secretary Suonandajie who was murdered by poachers. Wildlife photographer Yang Qin during his travels noticed that the number of Tibetan antelope in Qinghai had declined steeply from his first visit to the area in 1986 and a 1993 trip. Large number of wildcat gold miners were stripping the deserted lands of vegetation and killing the endangered Tibetan Antelope. In August 1997, Yang Qin established the first Suonandajie Wildlife Protection Station at Kekexili. During the Summer 1998, the Forestry University student environmental group "Promise to the Mountain" [Shannuo Hui] went to the station in Kekexili to help in its wildlife protection work. [p. 314]
During the 1990s several citizen environmental protection groups formed. Some groups go out to plant trees. The Friends of Nature has over 400 members who participate in tree planting campaigns as far away as Inner Mongolia and Shanxi Province. Beijing Global Village produces environmental education programs for Beijing Television and Chinese Central Television. China's Agenda Twenty One as well as the Rio Declaration stress the importance of popular participation in sustainable development efforts. Some people say that these environmental groups are a luxury of the rich. Yet the individual members pay for their own expenses. Some criticize them saying "they are just copying the western environmental organizations". That is not true. Chinese environmental NGOs are focus on severe environmental problems facing China today. Some NGO campaigns, such as the "Friends of Nature" campaigns to protect China's virgin forests brought the situation in Yunnan and Sichuan to the attention of the central government. Environmental NGOs have great potential. They deserve more respect and support. [pp. 316 - 322]