China Investment Research: Pollution Weighing Down China’s Future
In an article recently penned by The Guardian, “China’s burgeoning middle class has lodged its first mass challenge against the government by staging a large environmental protest in southern China.” In China, environmental issues are typically neglected as the country concentrates on its rise as an economic power. Even with increasing interest in environmental reform around the world, cancer caused by pollution, is the leading cause of death in 30 Chinese cities and 78 counties, the Ministry of Health says. How does this affect China’s economic future? This is no longer a topic for environmentalists. More than ever, pollution should be taken into consideration when conducting China investment research or China company research.
Only 1 percent of China’s inhabitants are said to breathe air deemed safe by the European Union (EU). Much of China’s pollution is generated from producing cheap products for the US and Europe. Western countries are not completely without blame. China subsidizes the price of goods for products like electronics using practices such as allowing electronic waste to be recycled and dumped in the country. The “savings are exported to the US and Europe but the destruction of the environment stays in China.” These indiscretions have huge implications according to China economic news and other leading China investment research firms.
As developing countries seek to eliminate their usage of coal in power plants due to dangerous emissions, China has rapidly expanded their coal market. At multiple ports, internationally, ships are lining up to load coal for furnaces in China, “which has evolved virtually overnight from a coal exporter to one of the world’s leading purchasers,” according to the blog China Environmental News. China accounts for half of the six billion tons of coal burned globally each year, leading pollutants to leak into the atmosphere anyway, despite attempts by developed countries to stop them. The rush to the Chinese market has aided in doubling the price of coal over five years – a figure not lost on China investment research firms.
David Graham-Caso, spokesman for the Sierra Club, says, “This is a worst-case scenario.” Its “Beyond Coal” campaign has helped to block 139 proposed coal plants in the United States over the last few years. “We don’t want this coal burned here, but we don’t want it burned at all. This is undermining everything we’ve accomplished.”
China Environmental News points out the ongoing “love-hate relationship many wealthier countries have with coal.” “Environmental laws have made it progressively harder to build new coal-fired power plants but they do not restrict coal mining to the same extent…because the coal trade is a lucrative business and because the labor-intensive mining industry creates jobs.” China is expected to import up to 150 million tons this year continuing the lucrative export trade industry and needs to because much of its own coal is low grade. Still, China is perceived as the largest polluter, which could have an effect on imports to countries looking to enforce regulations on worker safety and emissions standards, due to concern for global implications of China’s environmental practices. Additionally, some domestic financial loss could occur because of citizens’ response to China’s environmental practices.