The price of growth in China

by Chris Bertram on September 12, 2004

The New York TImes has a “horrific report on the extent of pollution in China”: and on the people who are bearing the costs of growth:

bq. Less than a mile downstream from the waste outlet, Wang Haiqing watched his seven goats chew on weeds. Mr. Wang lived on the other side of the stream, in Wangguo, and said several neighbors had contracted cancer or other intestinal ailments. He said his goats vomited if they drank from the blackened water.

bq. To reach clean drinking water, he said villagers must dig wells 130 feet deep. Most cannot afford to do so.

bq. “It’s been so polluted by the MSG factory,” said Mr. Wang, 60. “It tastes metallic even after you boil it and skim the stuff off it. But it’s the only water we have to drink and to use for cooking.”



Zizka 09.12.04 at 4:04 pm

During discussions of trade agreements, it was predicted that free trade would allow polluters to move away from environmental protection laws. That possibility is now being used as a threat by industry when talking to state legislatures. There are also provisions in free trade agreements penalizing state and local attempts to exclude profucts produced by environmentally-destructive methods.

The right-wing free-trader argument is that pollution is a a tradeoff which the third world should be free to accept. And that “the third world t=cannot afford the luxury of environmentalism”, as if environmentalism was all about pretty photographs and such.

The right-wing free-traders also normally are hard-line on government “takings”, but here the government decision involved the “taking” of a villages’ health and part of its livelihood. The Chinese profitting here are different individuals than the ones suffering from the pollution. We’re not dealing with the unanimous collective solidarity of the People of the Third World or People of China.

It’s the liberal free-traders who have the hardest questions to answer. During the freetrade debate questions of this kind were simply brushed aside and ignored (well, some laughable nugatory provisions were written into the law).

In short, knowing what we know about the government of China and the workings of free trade, we should not be surprised by this and should not object either if we’re free traders. After all, the goat-herders chose to live downstream from the factory; to them it was a good choice, and the reason it seems that way to them is that they are not competitive on the market. They need to improve their skills and invest in some other enterprise.


Lynne 09.12.04 at 5:14 pm

The blowback to the USA of the partnership between corporate and government aristocrats and Chinese communist aristocrats is going to be VERY BAD.


cure 09.12.04 at 5:30 pm

Zizka, another argument made by us free-traders is that the most polluting companies in a third world nation tend to be local companies, not MNCs. You’ll note the factory in question was making MSG, not Doritos. While MNCs tend to pay less money in the third world than they do in the first world, their wages and working conditions tend to be better than native third world countries; PR in their home nation, and a better k-l ratio than most third-world domestics explains this.

(As an aside, I had “home grown” (one word) instead of “native” in my original post, and the board wouldn’t let me post because of questionable content – odd, huh?)


Rick Broadside 09.12.04 at 6:46 pm

The problem with being a manufacturer in the US is that short term survival requires playing the China card (getting at least some things made there etc.)The only way to end this race to the bottom is internationally agreed upon government policies. Something we are not about to do with the current administration.


abb1 09.12.04 at 7:49 pm

Not necessarily government policies. International environmental and labor standards (including minimum wage and the right to form a union) is, obviously a necessity. But there is no need for direct government involvement, some external organization (like WTO) should be able to monitor (by inspecting the factories) and enforce (by penalizing the offenders).


Zizka 09.12.04 at 8:13 pm

I think it’s pretty irrelevant what the company produced or who owned it. We have a pretty good indication of Chinese environmental conditions and environmental law there in the story. The story isn’t really about the MSG company per se.


bza 09.12.04 at 11:11 pm

cure: “I had “home grown” (one word) instead of “native” in my original post, and the board wouldn’t let me post because of questionable content – odd, huh?”

It was probably tagged as “drug-related” content.


Dr_Funk 09.13.04 at 1:58 am

Man, it would be so easy to throw off a joke about MSG poisoning Chinese people for a change. But I will resist the urge.
This kind of thing was part and parcel of what happened in the West during our rather painful transition to an industrialized society (our meaning westerners, not meaning me personally being there during the Industrial revolution). But it would be rather cheap of us to condemn the Chinese…they merely want the kind of life that most people in the West can have without much effort. The problem is to find ways to do where the Chinese can have the cake (industrial development) and eat it too (without having this kind of environmental devastation).


self 09.13.04 at 4:09 am

Andy Xie of Morgan Stanley offered some insights on this issue recently.

His take is that while energy demand accompanied by high coal and steel prices are bringing wealth to Northern China, the labor surplus is keeping wages down and encouraging substitution of labor for capital. This results in lack of scale economies and thus heavy pollution coking factories. Modernization would cause unemployment pressure so local governments and their citizens are willing to tolerate the environmental costs. Xie opines that with all costs included (congestion, pollution, highway damage, etc.) there is probably negative value added.

He also notes that the export sector may be too capital intensive, reducing gains to labor. Additionally, the service linkage to Beijing is a drain from other surrounding areas, discouraging infrastructure investment.

It looks as though it will only get worse in the near future.


maureen 09.13.04 at 10:32 am

Abb1: we already have international labour standards – have had for decades. And guess which two sets of people both studiously ignore their existence and argue vehemently against them? That’s right – major economic players and politicians!

On its record, the WTO seems an unlikely enforcer. How about a bit more support, a bigger budget for the International Labour Organisation?

How about voters – in countries which have an element of democracy – questioning their potential leaders on this apect of their responsibility?


abb1 09.13.04 at 3:08 pm

Well, the ILO, of course, has no power. And their standards are only recommendations.

What the ILO can do is to provide assistance to someone who does have real power, like WTO.

I agree that it’s not likely to happen without a major politician making a crusade out of it. I thought Howard Dean came kinda close to making it one of his rallying points last year when he was flying high in the polls.


Richard Bellamy 09.13.04 at 4:35 pm

“I had “home grown” (one word) instead of “native” in my original post, and the board wouldn’t let me post because of questionable content – odd, huh?”

Many filters filter out the word “socialist” because it contains the name of pharma-spammer “cialis” in it.

It took me a while to figure out why my political arguments were being filtered out for questionable content.


james 09.13.04 at 5:23 pm

If this is such an issue, why did the Kyoto treaty exclude China from the restrictions faced by European countries?

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