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China: The Dark Side of Growth

In just three decades, China has been transformed from one of the world’s poorest nations to the world’s second largest economy. But rapid growth imposes long-term environmental, health and social costs, and other nations should be wary of emulating China’s model, cautions Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations. Smog choking Beijing and other cities hampers additional industrial development and imposes long-term health consequences. Rapid industrialization combined with inadequate regulations have seriously polluted 40 percent of China’s lakes and rivers, and one out of four people in the world’s most populous country lack access to safe drinking water. Entrenched corruption and widening inequality add to the many challenges and diminish the political will for sacrifice and solutions. The wealthy relocating money and families away from China signals little confidence in the country’s future or its governance. Huang urges that the many domestic challenges should be top priority for the country’s leaders. – YaleGlobal

China: The Dark Side of Growth

China’s intense focus on rapid growth carries health, environmental and social costs
Yanzhong Huang
YaleGlobal, 6 June 2013
The dark side of growth: Forty percent of China’s rivers are polluted (top); China, dubbed the world’s factory is badly regulated

NEW YORK: Emerging from the ranks of one of the world’s poorest nations to second only to the United States, China is destined for a place in the history books. But history may also record the heavy price paid by the Chinese people and will continue to pay for years to come.

China’s steady rise against the backdrop of a sluggish global economy has emboldened Chinese leaders to claim “firm confidence” in their development model. Meanwhile, seemingly robust authoritarian capitalism in China has convinced some American scholars that the model offers a viable alternative to Western-style democracies. According to Asian expert Joshua Kurlantzik, China’s system in many ways poses “the most serious challenge to democratic capitalism since the rise of communism and fascism in the 1920s and early 1930s.” 

Contrary to the image of the China juggernaut, though, multiple crises have struck  over the past decade. The sheer size of China’s economy and population only highlights the magnitude of health, environment and social challenges.   

Take air pollution. In northern China, readings of particulate matter no more 2.5 microns in size – or PM2.5, the most harmful types of toxic smog – have reached 40 times the maximum level allowed by the World Health Organization. The health consequences of such air pollution are enormous: A 2010 study conducted by the WHO and a group of universities found outdoor air pollution contributed to 1.2 million premature deaths in China, accounting for almost 40 percent of the global total. And according to a recent Deutsche Bank report, China’s air quality will become 70 percent worse by 2025, due to the increases in coal burning and vehicle and industrial emissions, which combined, already contribute to 85 percent of PM2.5 air pollution in China in 2013.

The sheer size of China’s economy highlights the magnitude of health, environment and social challenges.

Water pollution is another price paid for China’s meteoric economic rise. As a result of the rapid industrialization and poor regulation of the disposal of chemical products, over 70 percent of lakes and rivers in China are polluted, and nearly 40 percent of those rivers are deemed “seriously polluted.” Nearly one-quarter of Chinese lack access to safe drinking water. WHO recently estimated that nearly 100,000 people die annually from water pollution-related illnesses in China.

Some 20,000 dead pigs found in the Huangpu River in March added to concerns about food-safety regulations. A 2011 study published by Chinese researchers estimated that more than 94 million people in China become ill annually because of bacterial foodborne diseases, of which, about 8,500 people die. These numbers likely underestimate China’s food safety crisis, because statistics on health conditions caused by tainted food are often excluded. According to a 2011 research conducted by Nanjing Agricultural University, 10 percent of rice sold in China contained excessive amounts of cadmium, and some researchers estimate that as much as 70 percent of China’s farmland is contaminated with toxic chemicals. The widespread production and consumption of toxic chemicals in industrialization and agricultural production have polluted water and air and contaminated farmland, contributing to the emergence of as many as 400 so-called “cancer villages,” areas where rates of cancer are unusually high.  Overall, China has had an 80 percent increase in cancer rates compared with 30 years ago.     

Rapid growth has a price.

Rapid growth has a price. Accompanying a recent economic boom is a widening wealth gap.

The economic boom in the past decades has also been associated with a widening wealth gap. According to a report from China’s Southwestern University of Finance and Economics, the Gini coefficient – measured on a scale of 0 to 1 with higher figures associated with greater inequality – was 0.61 in 2010. While it’s not atypical for a fast developing economy to experience increasing inequality, China’s level of inequality is comparable to that of the Philippines and Russia and much worse than that of Japan, the United States and many countries in newly liberalized Eastern Europe.  Based on the study of Wang Xiaolu, an economist at the independent National Economic Research Institute in Beijing, analysts have estimated that the wealthiest 10 percent of Chinese earned 65 times that of poorest 10 percent. High inequality has increased the danger for China to tumble into the “middle-income trap” – getting stuck at a level of development that falls short of that of more advanced economies. Worse, the government’s failure to address this social crisis may pit the underprivileged against an entitled minority.

The existing sociopolitical crises in China are exacerbated by entrenched corruption. The market-oriented economic transition has created new opportunities and made corruption more pervasive than in previous decades. More than 10 years ago, two eminent Chinese scholars suggested that some 80 percent of the Chinese government officials were corrupt, and the situation has not improved. A conservative estimate by the Carnegie Endowment for International Peace put the cost of corruption in China at about 3 percent of GDP annually, or about $200 billion. Similar to a Greshamite system, which rewards bad behavior, making it rampant and driving out good behavior, China’s corruption has reached a level that touches almost every sector and every member of the society. According to a nationwide survey conducted in October 2011, about 82 percent of responders agreed that China has experienced a significant moral decline over the past decade, and more than half of respondents did not think that complying with ethical standards was a necessary condition for success. 

Sociopolitical problems threaten China’s achievements and its global leadership role.

In discussing the development paths taken by nations in a March speech delivered in Moscow, President Xi Jinping remarked, “Only the wearer knows if the shoe fits his foot.” As the social cost of development becomes increasingly unbearable, even those who benefited from the rapid economic growth do not think the existing model fits China anymore. When Beijing was engulfed by thick toxic smog in January, an actress born and raised in Beijing wrote: “The flood of emigration and every other type of temptation were not enough to get me to leave this lovable city. Today, this thought keeps circling in my mind: ‘Where will I go to spend my later years?’”

The regime’s call for more confidence in the system is also not echoed by China’s new rich, who vote with their feet by choosing to emigrate. According to a report issued by the Bank of China, 14 percent of those with a net worth of 60 million yuan, or $10 million, have already emigrated, and an additional 46 percent favorably regard relocation. Lack of confidence in the system is also suggested by money leaking out of China. Despite China’s restrictions on capital movement, as much as $3.72 trillion left the country over the past decade. 

Clearly, the profound sociopolitical problems are threatening China’s great achievements. Until China can address the immeasurable, if not irreversible social costs of development, it would be next to impossible for the nation to take a leadership role in the international system, what it sees as its rightful position. It’s hard to imagine, for example, that the country can regain its greatness if the Chinese people do not have clean air to breathe, safe water to drink, or uncontaminated soil on which to live and farm. Thus, it’s imperative to reexamine the China development model and make addressing domestic social-political problems a priority. Unfortunately, the alluring story of China’s rise can blind one to its dark side.


Yanzhong Huang is a senior fellow for Global Health at the Council on Foreign Relations and an associate professor at the John C. Whitehead School of Diplomacy and International Relations. He is the editor of Global Health Governance and author of Governing Health in Contemporary China.

Rights:Copyright © 2013 Yale Center for the Study of Globalization

Comments on this Article

10 June 2013
Are you from China?
-Guangxiao Yao , CHINA HUBEI
10 June 2013
China has a wise, ancient culture which from the holism of its medicine to that of its game of Go, comprehend the true principles of what healthy, natural growth -- and its limits -- entails. And what it entails is components working into one system that fits its nitch environment like a hand into a glove. If you think about, this is precisely Yin-Yang.
From the Western perspective of reductionist analysis as well, here too the seemingly thoughtless actions of Chinese development vis-a-vis complete departmental development (including what do you do with waste), fundamental to whole-life systems engineering, was ignored.
In general in nature, successful living things aren't components that sustain linear or exponential growth like cancers, but rather systems formed by components at a certain stage of development where they gather altruistically to organize for the whole. This is the key to surviving the limitations of surface to volume ratio. That is, once you are too big in the homogeneous sense, the perimeter times transport rate, is not sufficient to provide supply input and waste output, to support further growth. At this point, evolution into a higher system must take place. Thus cells become colonies, colonies become tissues of larger living systems. And these become organs/organ-systems of still larger ones, and so forth.
The problem with Communist China, Inc., is that being internally communist, and externally capitalist, it has suffered from the corruptions of both systems -- on one hand the artificial attempt to produce altruism by terrorizing the ego, and on the other hand, giving it free reign. Is it any wonder that a "short life but a merry one!" attitude of capitalism, married to not even getting it "merry one" thanks to communism, has resulted in just a suddenly flare of Chinese well-being almost immediately collapsing under the weight of its own waste products?
There can be no smugness here on the Western World's part, has we are on the same globalized planet and it is also our boat in which the Chinese have been drilling a hole under their seat. Further, though a variation on the cultural, socio-economic scene, we in the homeland of Hollywood and Madison Avenue are hardly lily white in the world's present corruption.
But if we are all going to finally take the bull by the horns and steer it to evolve naturally into a healthy globalization -- an evolution into a new planetary Humanity -- we will have to get serious about creating a supportive environment. We must sculpt the hand that will fit the glove we are given, not only by such indirect means, but directly through integral education itself. Change human relations themselves through a behavioral economics theory -- not by top-down communist, who-guards-the-red-guards force, and not by "benign" capitalist neglect, but rather by working bottom-up through self-helping our way to the secure global cement of mutual responsibility. This, not by the fools-game of endless revolutions bringing newer, bloodier egoistic 1%-ers to power -- but rather peacefully, in full cooperation with awakening democratic governments and round tables of equals.
-engineer_sci , Los Angeles
9 June 2013
What we see in China, due to the sheer size of the nation and the intensive speed they grew simply highlights the problems with the constant quantitative growth system.
Even if the changes are more gradual and less obvious at other parts of the planet, even in countries where growth has been accumulating for decades, the signs are getting more and more clear independent of countries, cultures or governing systems.
The constant quantitative growth economic system has no natural foundations, it is artificial, it is based on exploitation and ruthless competition and by this it goes against the fundamental laws of natural, integral systems where the laws of general balance and homeostasis dominate in order to sustain life.
And since humanity is not outside or above the natural system but we are integral parts of it as any other living organism, those laws are binding for us too.
Today humanity has reached the stage where with our present system we are in total opposition with the natural system and its laws, thus our development has become self-destructive.
We have all the necessary scientific data, and the "field-data" from the daily events of the ongoing crisis to be able to critically analyze our situation and change direction in order to return to the framework our present global, integral, natural system requires.
Until we realize and accept the "mistake" we made with our present socio-economic system we have no chance of working out a solution.
Every cure starts with establishing the proper, full depth diagnosis.
-Zsolt , Wanganui, New Zealand
9 June 2013
great article and helps me more about to complete my assignment regarding pollution in china
-hira , pakistan
8 June 2013
Great article by Mr. Huang. China has many looming problems, and perhaps the most difficult is the demographic problem. China is getting older, and getting older fast. That's the result of the one-child policy, of course, and the aging of the Mao baby boomers, but it's also the result of the type of work the Chinese do. They are simply unable to do hard manual labor past their 40s. Another problem is expectations. Expectations solve many political problems when they are rising, and exacerbate them when they are falling. The volatile mix of migrant workers and fresh college graduates must be kept happy.
China's political history is stormy and doesn't provide much of a basis of trust of the government. Although Adam Smith posited that each man operates in his own economic interest, Mr. Huang correctly points out that this is out of control in China, where even baby formula can be tainted for profit.
It's a fascinating country to watch.
-Steve , Thailand
8 June 2013
This is a very good article that should inspire and guide African leaders in their rush towards Chinese investment on African continent.
Without strong regulations and standards, Africa will pay a heavy price for Chinese investments, as well as other easy money spenders.
We agree that China should increase investments in Africa and compete against traditional masters. But both should be subjected to strong regulations and standards. Otherwise, Africa will never see better days.
-Daniel Mamba , New york