China’s ‘iron hand’ loosing grip over pollution

Bloomberg

Embracing a groundswell of public outrage about toxic air ahead of annual legislative meetings last year in Beijing, China’s President Xi Jinping threatened to punish polluters with an “iron hand.”
Fast forward a year, as delegates with China’s legislature meet again in the capital, and evidence suggests the iron hand may be loosening its grip, highlighting tension between the goals of environmental protection and economic growth, which hit the slowest pace in a quarter century last year.
While air pollution in the nation’s capital has improved slightly, residents still frequently don face masks to filter the smog, including during a string of days recently air quality was listed as hazardous. About 80 percent of 338 monitored Chinese cities, including Beijing, failed to meet official standards last year, according to the environment ministry.
In a pivot, the government informed local officials in 2013 they’d be evaluated not just for meeting economic growth targets, but also for how well they protected the environment. The commitments by the massive state bureaucracy resonated with a citizenry emboldened in part by an alarming documentary, “Under the Dome,” that was viewed by more than 100 million people in a matter of days last year and rallied many to demand action.
Despite tough rhetoric, though, the government has sometimes sent conflicting messages. The documentary was first lauded by some government officials and then abruptly censored as legislative delegates gathered in Beijing in 2015. At a briefing Monday, Vice Environmental Protection Minister Wu Xiaoqing warned against letting pollution control slip as the government focuses on maintaining economic growth.
“It’s incorrect to put the relationship of environmental protection in opposition to the economy,” he said, adding that China “must not sacrifice the environment for the growth of GDP.” As part of enforcement efforts last year, the government imposed 569 million yuan ($86.9 million) in daily fines and 4.3 billion yuan in punitive fees, up 34 percent from 2014.
Wang Guoqing, the spokesman for the Chinese People’s Political Consultative Conference, carried on the verbal offensive at a briefing. “Curbing smog is a war of the people — even a protracted war,” he said. To reduce pollution, China should change its development path away from energy-intensive production, he said.

’ZERO TOLERANCE’
Some local officials enthusiastically embraced the directive from the top to change paths. The city of Linyi in China’s eastern province of Shandong closed at least 1,586 small businesses after a visit from China’s environmental inspector, according to the municipal environmental protection bureau.
Linyi Mayor Zhang Shuping made the fight against pollution the city’s No. 1 priority, urging departments to show “zero tolerance” for environmental violations. The city’s economic growth rate subsequently slowed to 7.1 percent in 2015 from 10.1 percent a year earlier, and Shandong’s provincial growth also slipped. It’s not yet clear whether mayor Zhang will win praise for cracking down on polluters or be chastised for letting growth decline.

EMBOLDENED MINISTRY
In the hierarchy of China’s bureaucracy, the environment ministry has been secondary to industry and financial departments that have guided China’s rapid economic rise in recent decades. With the mandate from Xi last year, however, the emboldened environment ministry summoned heads of 15 cities with severe pollution and launched a campaign to fix the problem.
“The action has made a clear impact on some governments including Hebei and Shandong, where pollution problems are prominent,” said Ma Jun, the founder and director of the Beijing-based Institute of Public & Environmental Affairs. Not all the governments fell in line.
Closing plants to curb pollution could hurt the economy in the short term, said Zhao Yang, Hong Kong-based chief China economist at Nomura Holdings Inc. As the nation raises environmental standards, companies have to buy more equipment to help reduce pollution and this will help spur growth later on.
Parliamentary delegates will discuss environmental policies — including factory closings and support for alternative energy — at NPC meetings, but Premier Li Keqiang’s work report contained mostly general goals of further reducing major pollutants. Much more attention was given to reviving the world’s second-largest economy targeted to grow by 6.5 percent to 7 percent, down from last year’s goal of about 7 percent.
“Local governments are facing a dilemma — keeping economic development and local employment while meeting environmental protection requirements — at the same time economic downward pressure and overcapacity are bringing challenges,” said Wang Tao, assistant dean of CBN Research Institute, a Chinese think tank.