China, WTO, & Environment

The State of the World is a grand title for an annual publication; a title that many authors or organizations would be incapable of writing about. The Worldwatch Institute is that rare organization with the ability to accurately assess the facts of so many complex issues. The 'State of the World 2006: China and India' is a wonderfully informative book. A GlobeScan survey of sustainability experts ranked these books as the "Top-rated annual publication on sustainable development." Here is an article from page 139 entitled 'China, the WTO, and the environment'

In 2004, a high-level group of Chinese and international scholars released a detailed assessment of the environmental impacts of China's 2001 accession to the WTO, covering a number of key sectors. The results, some of which are surveyed here, underline an important message: trade's impacts on the environment are not straightforward.

In agriculture, trade liberalization has meant a dramatic shift away from resource-intensive crops such as wheat and rice (since China's water and energy resources are scarce) and toward labor-intensive sectors such as vegetables and horticulture (since labor is plentiful). China is now for the first time a net importer of wheat. The result is predicted to be a lowered use of water, pesticides, and chemical fertilizers in China: a positive structural effect. Of course, the net global effect will depend on the production methods in the countries now exporting wheat and rice to China.

WTO accession has brought a dramatic expansion of aquaculture exports as investment barriers drop and domestic investment shifts from traditional agriculture to new areas. This has meant increased severity of a number of associated environmental problems: eutrophication in coastal waters, destruction of seagrass and mangroves (used as breeding grounds for marine fish stocks), and marine deposition of antibiotics and other chemicals used in aquacultural production. Aquaculture's growth is suspected of contributing to toxic red tides; while the "normal" incidence is around 10 per year, there were 10 times that many in 2003.

Trade liberalization has slashed automobile prices in China by dismantling trade and investment barriers and forcing domestic efficiencies. This, added to the increased income generated by growth from trade, has meant an explosion of automobile production, with almost 40 percent growth in 2002 and 35 percent in 2003. This threatened to greatly increase pollutants such as carbon monoxide, nitrous oxides, and particulates; in response, the government adopted stringent European Union standards for automobile emissions. The result has been a substantial drop in emissions per vehicle, but the overall drop has been undercut by the sheer numbers of increased vehicles on the road: the scale effect.

Trade liberalization has meant a vastly increased Chinese energy demand, in part the result of increased manufacturing and growing affluence. Projections see that demand more than tripling by 2030. Coal--among the most polluting fuels--will decrease in prominence but will still dominate the energy mix. The result will be a steady and significant increase in pollutants such as sulfur dioxides, nitrous oxides, particulates, and carbon dioxide: again, the scale effect at work.

WTO accession has meant a significant increase in textile production in China, as quotas in export markets were lifted. It was predicted that in the four years following WTO accession (to 2005), the production of sewage discharged from textile production would increase by 960 million tons, or 90 percent, compared with 36 percent without WTO accession. The most serious problems with this effluent are polluting dyes and increased chemical oxygen demand. Water and power use are also predicted to expand dramatically. These scale impacts will be somewhat offset by improvements in technology brought by foreign investment; pre-WTO technology in this sector was extremely wasteful and polluting by international standards.