Ministry uses TV-show to save energy

vice-premier Zeng Peiyan

The failure of China to reduce energy usage and reduce polutions was illustrated this weekend again when hapless authorities turned to a TV-show to urge the masses to reduce their energy consumption. The China Daily:

Chinese vice premier Zeng Peiyan on Saturday called on ordinary people to help save energy and reduce pollution.
"Energy conservation and pollution reduction are related to the sustainable development of the whole society and economy, as well as the interests of the broad masses," Zeng told the opening ceremony of a nationwide campaign in Beijing.

While the campaign involves at least 17 government departments, it looks mainly like a display of dispair and hollow propaganda, as real measures like the increase of energy prices is politically not achievable.

Green knights, on your horses

Earlier this year I listed the long row of urgent priorities by the central government. I found the list impressive and actually none of the subjects could be missed there. Without addressing each of them, China would develop a massive problem. Since then, with the product quality scandals and a few more, the list has only grown. At that time, I was also wondering which of those priorities would survive the year-end. Some things move faster than expected.
Politics in China is governed by negotiations between the central and many, many other governments. Much of the real power is in the hands of local power brokers and state-owned companies and only by getting their consent, the central government can realize some of its priorities. The question is therefore: what urgent priorities will drop off the list?
I have been discussing the subject with a range of fellow China-watchers and there is a consensus that the environment has dropped out. Some actually say, it has never been on it, but for a while at least investments in environmental projects went up. Local authorities do not mind those, since they benefit from every investment.
A few times over the past months, the government departments in charge of the environment had to take severe political hits. One report by the World Health Organization on the number of environmental reports in China and one developed with the World Bank on the Green GDP, a pet-project of Hu Jintao, where killed. They still had some effect because they of course leaked out, but it gave a clear signal that the environment as an issue should back-off.
Some of my friends dismissed those reports anyway as meaningless propaganda tools. That might be true, but when even meaningless propaganda kits gets killed, there is something rotten.
What those reports could and should have done is creating a climate for real measures, like a stiff increase of energy prices, so the usage of energy could slow down and that could force even the economy at large to cool down, something the central government has not yet been able to do. But when anything goes against the interest of the local power brokers, it is a slowdown of the economy. Those in charge are making money on the booming economy now and do not want to share that with a next generation of leaders.
Of course, China is never going to remove the environment as an issue from its political agenda. And of course, next year Beijing needs to have some breathable air for at least a few weeks in August as the Olympics take place. In the official propaganda, the environment will remain an issue, but not one with a high priority.
Knowing this, what can be done?

First, the environmental struggle has seen severe setbacks and the prospects do not look good. But not all is lost yet and the green knights should get on their horses and get their act together.
Second, companies involved in environmental projects should get their things implemented as soon as possible. Funding that is available should be used as much as possible, because a drop on the political agenda will be followed by a drop in funding
For the record, of course I hope this gloomy analysis is wrong.

The value of a trade union in a coal mine

Historian Wu Si

Historian Wu Si looks at the backgrounds of the Shanxi brick kiln scandal in Southern Weekend (here in a translation of Danwei). At the tail of the story he illustrates how the arrival of a trade union in the Zaozhuang coal mines made a difference:

Wu: Last year I wrote an article that calculated the wage difference between Zaozhuang coal mines with and without a labor union. Before the labor union came, the workers were exploited terribly. Five years after the union arrived, workers' wages had risen 32%. Labor unions are one form of political power, and political power is worth money. It can be eaten - it was worth 32% of their former wages. The second question is whether the boss suffered after the wages were raised. Did profits drop? In those Zaozhuang mines, profits did not drop.
I've asked two bosses what would happen to their companies if, in the next five years, their employees' wages were to rise 30%. Would they forfeit market competitiveness? They said that the competitive edge that China has in the world market, particularly its cost advantage, is not just a point or two.
Today, Chinese products can be dumped on the world because of that labor cost advantage. This upsets workers in other countries, and has even caused problems to international order.
I've calculated that if China were to increase the salary of its 100 million migrant workers by 32%, this would bring to their families benefits worth 5 times what canceling the agriculture tax brought. This money would be transformed into spending power. One problem China has today is overproduction. Even if its competitiveness on the world market is weakened, the benefits of spurring domestic consumption are enough to make up for it.

The China Opportunity - the WTO-column

Shanghai - "Are you positive or negative about the effects of China on the world?" I tried to look no too cynical when the leader of a European delegation formulated last week the questions he wanted me to answer. Shanghai and China are flooded by delegations full of curious business people, government officials, NGO's, eager to find out how China is going to change the world. Most of them seem genuinly lost when it comes to the more fundamental questions.

All to often those relative newcomers try to fit China's development in some easy to catch cliches, since making a real assessment of what is going on is darned difficult. I try not to let them get away with all too easy ways of framing the China story. My task is to confuse you, I tell them, rattle their all to simple assumptions about the dangers and opportunities in China, try to liberate them from the all to simple ideas they might have had about China.

By the time I meet them, most visiting delegates have already made one simple but rather essential observation. "This is a huge country." While everybody might know the figures, only when you are traveling here, face the huge distances, the internal differences, people start to realize that even Shanghai - with mostly a bigger population than the region they come from - cannot be described in cliches only.

It is a delicate balance: trying not to deny the huge problems China is facing, while at the same time also avoiding all too easy doomsday scenario's that sell very well in the media. China's voracious hunger for energy and raw materials. The water crisis in Wuxi, the dead fish in China's lakes, the growing number of stories about social unrest: it's sizzling economic growth does seem to come at a price that might be too high.

China as a country has been used to an almost permanent state of crisis management and has become pretty good in managing crises of all kinds of nature. That is not meant as a compliment, but might help to understand why despite an endless row of serious incidents, there might be a way to continue economic progress without turning the environment or global economic relations into a real disaster mode.

What strikes me in China is the high level of inefficiency in using energy, labor, raw materials, almost anything that is needed for fuel its economic growth. Getting more coal and oil in has been the most important strategy to deal with the growing need for energy. But there could be another way. The level of inefficiency is so high that even a marginally successful program to save energy could make a huge difference and allow years of economic growth without the need for more coal or oil.

I'm not familiar with the current figures, but a few years ago China needed eight times as much energy to generate one US dollar worth of products compared to the United States, for sure also not a country that has a clean record when it comes to energy saving.

Efficiency is going to be a key word in the years to come. That might go against the slight anarchistic nature of China and its citizens, but when there is no other way out, China's crisis manager will find that way.

Fons Tuinstra

What is China's largest company?

I just got an invitation from Ogilvy to join a speech of the president of Azerbaijan later this month in Istanbul during a high-end meeting on energy. Hehe, I think I will not make it. The world is flat, but I would not even have a peek at it when they would offer access over the internet.
What struck me was this in the list of other speakers:

Liu Zhenya, President of State Grid Corporation of China (largest company in China).

The State Grid is a relatively new company was previously known as the (in more than one sense) powerful "State Power Corporation". Former prime minister Li Peng belonged to this conglomerate. The idea was to split off power production and distribution. But I'm not sure whether that really has worked out.
Not sure what kind of measurement is being used to call it the "largest company in China". Anybody can help me out?

A battle won for the environment in Yunnan

the three parallel rivers

Josie Liu points at a pledge the Yunnan provincial government has made to protect the environment. There will be no dams and no mines in the region of the three parallal rivers, one of the World Natural Heritages sites, listed by UNESCO.

Taiyuan refuses to compensate illegal miners

The decision by the municipal government of Taiyuan to no longer compensate miners of their families if they are involved in accidents in illegal mines has sparked off a fierce debate, also in the official media. The People's Daily summerizes (in a translation by CDT)

Should the government “pay the check” for workers who die at illegal mines? The admonition from Taiyuan Bureau of Land Resources brought on disputes from many quarters. Advocates said that to fight illegal mines the government should adopt multiple resolutions. It should not only heavily punish illegal mine owners, but should also punish peasant workers who participate in illegal mining. Opponents said that aside from the enticement of rich returns from illegal mines, the government’s misconduct should also be blamed for the existence of illegal mines, thus the government should take a certain responsibility for peasant workers whose interests are damaged while working at illegal mines.