03 March 2008 00:00 [Source: ICB]
THE ANCIENT proverb, "the mountains are high and the emperor is far away," has often been used by Western commentators to describe the difficulty in enforcing central government legislation across such a vast country as China.
A quick search online reveals a plethora of recent news articles that quote the proverb. The belief seems to persist that the writ of Beijing remains weak in everything from trade liberalization to energy conservation and environmental protection.
However, there is a growing groundswell of opinion within the chemical industry that on one particular issue - the environment - the government is effectively enforcing a significant shift in priorities.
"Two years ago, it was all about economic growth at the expense of just about everything else," says one Beijing-based chemical consultant. "But what we are now seeing is a genuine and effective focus on sustainable development. Project approvals are taking longer, and in some cases are not being given at all. Older chemical plants that use outdated processes and with poor wastewater treatment and emissions standards are also being closed down."
The problem for anyone trying to win approval these days is that emissions standards are being set for cities, regions and provinces. A chemical project not only has to employ the latest technologies and best environmental standards, but also has to fit into the bigger picture. Approval for a state-of-the-art plant will still be rejected if it pushes a particular city, region or province over an emissions target.
Companies have to either scrap projects or shut down existing capacity in order to stick to pollution targets.
Coal-to-chemicals projects in some western provinces may also struggle to get approval because of high levels of pollution from existing coal consumption.
The muscle of the State Environmental Protection Administration (SEPA), the main environmental enforcement body, has been increased. China's highest executive organ, the State Council, is reportedly helping SEPA enforce legislation throughout the country.
Rumors are afoot, supported by senior China observers, that SEPA could be upgraded to full ministry status, giving it even more authority. This might occur as soon as March, during the annual meeting of the National People's Congress (NPC).
Legislation is becoming more stringent and is constantly evolving. For example, the consultant believes that guidelines for chlor-alkali and sulfuric acid producers could soon enter the statute book.
And crucially, local officials are being held accountable for emissions levels and overall environmental standards in their cities, regions and provinces.
"This is serious. If, for instance, there is an environmental incident involving a chemical plant, the local official can be in a great deal of trouble," the consultant adds.
Just how much trouble is unclear, but it's worth noting that local officials were executed in 1998 during the crackdown on smuggling, and more recently as part of efforts to reduce corruption.
In addition, the NPC meeting could see the creation of the long-awaited Energy Ministry, although recent press reports suggest that there could be a further delay.
The ministry would be able to devise a more coordinated and effective policy for efficient energy use, which is currently the responsibility of several different ministries.
But the skeptics point to the power of relationships as holding great potential to still override the authority of Beijing. A well-placed local official might continue to have more effective power than his central government superior.
However, Arthur Kroeber of Dragonomics, a Hong Kong-based research service that focuses on the Chinese economy, says: "The idea that central government has no control over local governments is one of the commonest and silliest one-liners about China."
His point is that while it might have never been practical to enforce all the "100 items on a local official's to-do list," the top priorities have always been implemented.
As China enters a new era to follow the period of economic development initiated by former premier Deng Xiaoping, top priorities include the environment and energy conservation, says Kroeber.
Often-used government catchphrases are "a harmonious society" (meaning less social unrest) and "the scientific concept of development" (sustainable development).
But the drive toward sustainable development does not mean multiparty elections and powerful nongovernmental organizations blowing the whistle on polluters.
The skeptics say China will find it impossible to rectify its environmental problems without Western-style openness.
"For as long I have been visiting China [23 years], people have been saying that further progress will only be possible if there are fundamental economic and political changes. And for the last 23 years, these people have been proved wrong," says Kroeber.
But he recognizes, as does anyone who knows anything about China, that its environmental problems are huge. The World Health Organization estimates that 750,000 people are dying every year in China from polluted air and water.
But to quote another Chinese proverb, "a journey of a thousand miles begins with a single step."
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