01.01.11

Can China Save the World, Twice?

With the world economy stalled, all eyes are on Chinese consumers, who professor Karl Gerth says are needed to jump-start growth worldwide—and maybe also solve the environmental crisis, too.

With the global economy stalled, all eyes are on Chinese consumers, who professor Karl Gerth says are needed to jump-start growth worldwide—and maybe also solve the environmental crisis, too.

World business and political leaders are making major efforts to get China to save the global economy. From international trade organizations such as the World Bank to politicians including President Obama as well as China’s own rulers—all are pushing China to succeed the U.S. and Western Europe as the next nation of consumers who will drive world economic growth.

Since the 2008 financial crisis, the international pressure for China to rescue the global economy has only intensified and is certain to continue this year. There has been serious pressure for another round of efforts to persuade China to re-evaluate its currency, the renminbi, which Washington hopes will effectively give Chinese consumers more money to buy imports.

But as the spending power of Chinese consumers grows, so do China’s environmental problems. China has 16 of the world’s most polluted cities, its lakes and rivers are disappearing, and although it is the world’s largest energy user and carbon-emitter, but it’s still only the 18th per capita emitter.

In other words, as Chinese consumers save the world’s economy, China’s environmental problems may get worse, much worse.

Take water, the ultimate consumer product. In addition to consuming potable water by cup or bottle, the Chinese, like their counterparts worldwide, consume water indirectly as a critical ingredient in their new and more water-intensive diets based on meat. It takes approximately 1,000 tons of water to produce a single ton of grain and 7 tons of grain to produce a ton of beef. An upshot, then, of China’s switching from their pre-1978 bean-protein-based diets to Kung Pao chicken or McDonald’s hamburgers is that it uses much more water. Many Chinese industries also use massive amounts of water. It takes, for instance, 400,000 liters (or 105,000 gallons) of water to manufacture a single car. And last year, for the first time, Chinese consumers surpassed their American counterparts by buying the most cars.

Any hope for environmental progress will depend on the Chinese managing, against the odds, to excel as stewards of the environment with as much enthusiasm as they have learned to become first-rate consumers.

The market responses to China’s water crisis have created additional environmental problems. Gone are the days when visitors to China struggled to find a store that could sell them something to drink. Now water vendors are everywhere, and the waste bins alongside roads are brimming over with discarded plastic bottles. Even more than in Western countries, fewer and fewer consumers appear to trust tap water, or “Tap-ian,” to coin a pun on Evian, the French water brand that has became a fashion statement for the brand-conscious wealthy in China.

The habit of buying bottled water is spreading worldwide, with Americans still leading the way, consuming 8.7 billion gallons of bottled water in 2008, almost double what they drank at the start of the decade. But while the U.S. market for bottled water began to actually decline in 2008, China consumed over 5.2 billion gallons that year and is now by far the fastest growing market. This is only likely to grow, as China drinks only about half the global average of 7.9 gallons of bottled water per person, significantly behind the U.S. (28.5) and the world leader, Mexico (59.1).

But as always with China, per-capita matters: If Chinese consumers begin to drink even one-fourth the per capita rate of bottled water as the average American, China will become the world’s largest consumer.

But might we also look to China to save the world environmentally?

An environmental protection movement there shows signs of life. The national government has begun to ban certain types of disposable items, and hundreds of small companies in China now manufacture more sustainable alternatives, including biodegradable disposable articles such as chopsticks made from yam starch and tableware made from rice husks, starch, and cardboard. Most importantly, China now has thousands of local and national environmental non-governmental organizations, most established in the last few years. Organizations like Friends of Nature work tirelessly to protect and restore China’s environment and raise public awareness.

But just as China is emulating Western consumer lifestyles, if the history of environmental NGOs in the West offers clues to China’s future, there is ample reason to worry that Chinese environmentalism is likely to be absorbed by consumer culture, creating new markets for ecotourism, sustainable housing, and consumer products sold as “green.”

And China is less likely to fundamentally challenge a way of life that remains deeply dependent on ecologically destructive and non-renewable resources.

It’s not hard to imagine a day in the near future when Chinese tourists heading for weekend vacations in Paris will have the option to buy carbon offsets. Like Western nations before them, the more likely expectation is that the Chinese will drag their feet, make token changes, and outsource their industrial pollution to the “next Chinas” in Vietnam, Zambia, Indonesia, and places with weaker labor laws and environmental protections. Or perhaps they’ll follow the European lead with a “cap and trade” market that mostly shuffles the problem around.

Yet although it’s easy to be pessimistic, the scale and relative suddenness of China’s environmental problems linked to that country’s changing consumer habits may also make it easy to imagine how the world’s consciousness—reflected in consumer behavior—needs to change.

book-cover---gerth-china-environment
As China Goes, So Goes the World: How Chinese Consumers Are Transforming Everything By Karl Gerth 272 pages. Hill and Wang. $26. ()

A large part of any hope for environmental progress will depend on the Chinese managing, against the odds, to excel as stewards of the environment with as much enthusiasm as they have learned to become first-rate consumers. Certainly, there is evidence that China understands the odds and the consequences. We read in the newspapers nearly daily how China is leading the world in renewable energy, as it must if it is to continue its economic growth. The latest: It’s building six gigantic wind farms that will generate the equivalent of 100 coal-fired power plants worth of electricity.

China is to be commended for its green efforts. But whether this commitment to renewable energy will be able to catch up with the speed and size of its emerging consumer demand is still an open question. No other nation in the developed world has yet found a way to reverse the ecologically destructive effects of its way of life faster than any off-setting commitment to correcting, let alone reversing them. So this is yet another way in which we can only hope that China will lead the way with consumers who save the world economically without destroying its environment.