Economy

Changed environment

Why graftbusters have joined China’s war on fighting pollution

Tetra-Pak-w

Twenty-six years ago when Swedish packaging giant Tetra Pak wanted to set up shop in southern China, the government of Foshan offered a plot on a new industrial park a few miles out of town.

Tetra Pak accepted and its factory thrived. It became the dominant local packaging firm, with a 90% share in China’s beverage paperpacking market at one point. And for many years it was Foshan’s largest taxpayer.

But Foshan today is not what it was 30 years ago. The population has doubled and the city has spread.

Tetra Pak’s once out-of-town factory is now surrounded by residential communities worried about air pollution.  This summer, after years of lobbying by angry locals (and a $100 million antitrust fine by the Chinese authorities last year), Tetra Pak shut the plant. Production, it announced, would be transferred to its three other factories in Hohhot, Kunshan and Beijing.

Tetra Pak is not alone in moving. All across China, plants that pollute air, water and soil are being shuttered by the thousands. Many plan to upgrade to better manage the disposal of their waste, others will move to places of lower population density. Some will stay shut.

If anti-corruption was the hallmark of Chinese leader Xi Jinping’s first term in office, anti-pollution could emerge as the key battle of his second five-year term.

Indeed his battle against pollution is following much the same model as his crackdown on graft.

Since July last year high-profile teams have been empowered to carry out unannounced checks around the country. Dubbed the “imperial envoys” – because they are tasked with enforcing the “emperor’s” will – they are drawn not only from the environment ministry but also the Party’s Central Commission for Discipline Inspection and the Central Organisation Department.

The addition of these two powerful Party organs is to show local officials that their futures depend on tackling this issue. In the past when inspection teams were drawn from the ministry of the environment they were deemed toothless. Indeed, they were often refused access to factories, illegally detained by local authorities and in some cases set upon by paid thugs. Another tactic was simply to shut the factories and reopen them after inspectors left.

Under the new system, the teams visit four times a year. So far 18,000 companies have been punished and this week the China Daily announced the incredibly precise figure of 5,763 public officials that had also been found “accountable” for the country’s pollution (the story was on the front page).

In October last year the city of Xi’an was discovered to be manipulating its official air quality readings by stuffing cotton gauze into its monitors; in July, Tianjin was also called out for tampering with water pollution data by blocking sewers and fabricating notes from environmental meetings to fiddle the inspection.

Xinjiang too was upbraided. Air quality in the western region has deteriorated in recent years as eastern factories relocate there. The local government was reprimanded for allowing precious water resources to become polluted. “In the past, local government’s priority was GDP growth, which is why they looked away from great levels of pollution,” Ma Jun, director of the Institute of Public and Environmental Affairs told the Global Times.

Now in smog-plagued cities such as Beijing as much as 30% of officials’ performance review is based on environmental management, the South China Morning Post comments.

This year is particularly important as it marks the end of the government’s first five-year action plan on air pollution. Targets include a 10% reduction of the most hazardous PM2.5 particle in smaller cities and a 25% reduction in Beijing.

While shuttering factories is good for the environment it’s not great for the economy – at least not in the short term. This is a price Xi seems ready to pay. In his speech to the G20 in Hangzhou last year he told the audience that “clear water and green mountains are better than mountains of gold and silver”.


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