When a Billion Chinese Jump (20 page)

In the center of a crowd of locals beside a wrecked bus, one middle-aged woman won a cheer of approval by calling for the government to make the first move toward reconciliation. “It’s up to them to start talking,” she said. “I don’t know what we would do if the police came back again,
but our demand is to make the factory move out of the village. We will not compromise on that.” The bravado was to be short-lived. After the authorities regained control, nine alleged ringleaders were given prison sentences of between one and five years, according to their lawyer Li Heping. Few details of the incident and the arrests were ever published in the Chinese media.

The industrial expansion went on. But the pollution, inefficiency, and instability indicated that something had to change or China would accelerate into an ecological wall. At a state level, the response was Hu Jintao’s “Scientific Outlook on Development,” which officials told me could be translated more simply as “sustainable development.” Among the regions, Zhejiang and Jiangsu went further than most to put this ideal into practice. Like Western nations before them, the provinces had become rich through dirty industries and now they wanted to clean up. Zhejiang’s capital, Hangzhou, reinvented itself as a service-industry, information technology, and tourist hub—a transformation that was symbolized by beautifying the lakeside scenery and improving water quality. Jiangsu became a leader in the field of solar energy, centered around Suntech, the world’s biggest manufacturer of photovoltaic panels.

Local TV stations, newspapers, and web portals increasingly turned their attention to environmental problems. Some offending companies were named and shamed. A few even apologized.
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Zhejiang announced tighter controls on pharmaceutical, chemical, cement, and other toxic industries. Jiangsu introduced China’s first emissions trading system and promised to close more than 2,000 small chemical plants that failed to meet environmental standards. What was most striking—though unremarked upon by the government or local media—was that the authorities had clearly known for years that these firms had been violating the rules and destroying the environment. There was also no mention of similar punishments for midsized and big polluters, which generated more income and exercised greater political clout.

Often, these “cleanup” measures turned out to be a different means of expansion. As with the recycling businesses of Guangdong, many dirty industries simply moved into the hinterlands. Others found new tricks to dump their waste through concealed pipes or by discharging at night. A year and a half after the supposed crackdown on polluters in Jiangsu, the city of Yancheng had to shut off water for a million people after carbolic
acid—including the carcinogens hydroxybenzene and phenol—was found in the city’s water supply.
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Even in Zhejiang, which has gone further than most to improve the situation, officials caution that there would be no qualitative change in the environment until 2020.
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The situation was similar at a national level. The government’s noble aspiration to move the economy onto a sustainable track was belied by industry’s ever-increasing consumption of land and resources. Beijing’s mandarins experimented with strategies to ease energy intensity and reduce pollution.
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They tweaked caps on power and water prices to more accurately reflect the costs of maintaining supplies and quality. They also attempted to make energy-intensive industries, such as steel and cement, pay extra for power, but these efforts were often compromised or ignored. Local authorities did not want to hurt the competitiveness of businesses paying taxes and, more often than not, bribes.

Efforts to make polluters pay or to account for environmental costs faltered because of weak governance. This was evident in the central government’s failed attempt to introduce a “green GDP.” As the name suggested, this policy aimed to factor long-term environmental costs into calculations of economic growth. It was a hugely ambitious plan that could have set a precedent worldwide. Trials were conducted in several provinces. But three years later, when local officials realized this would almost negate growth in their accounts, they torpedoed the scheme.
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The central government could have overruled them if it had been united on the policy. But it was complex to implement, and politburo members had their own reasons for wanting to scrap the plan. With no electoral mandate, the Communist Party depends on economic growth for legitimacy. If “green” accounting sliced several points off GDP growth, the party’s authority would suddenly look very shaky. Going green too rapidly was a political risk. Instead the leadership incorporated some of the “green GDP” goals into other areas, such as promotion assessment for cadres, but economic calculations were left untouched. China would remain addicted to growth. In the words of the environmentalist Ma Jun: “The plight of the ‘green GDP’ project reflects the current conflict between the environment and the economy.”
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To an extent, these were growing pains. Optimists argued that China was following a well-trodden path of development that would eventually take it out of the industrial mire. A former editor of
The Economist,
Bill
Emmott, predicted that China’s environmental problem would prove no more insurmountable than those overcome by Japan and South Korea. Like them, he wrote, China would be able to afford a cleanup once it grew richer.
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At that point, a time-proven market solution would kick in: first, a newly created middle class would refuse to tolerate the old dirty industries; second, newly generated wealth would fund a cleanup; third, companies would move up the manufacturing value chain by developing cleaner hightech and service-sector businesses; and finally, higher-polluting industries would be sent out of the cities, or—even better—out of the province.

It was a comforting prospect, but this model relied on those at the cleanup stage being able to sweep the accumulated dirt of development under a new and bigger rug. When this process reached China, it had already been expanding for two centuries. By the time places like Zhejiang and Jiangsu were trying to clean up, the waste was getting too big and the rug too small.

Like Europe and the U.S. before them, Japan and South Korea improved air and water quality by investing heavily in clean and efficient technologies, by moving their dirtiest industries overseas (mostly to China), and by expanding their markets to provide alternative jobs. China cannot easily do the same. It is less wealthy relative to its size and less efficient in generating wealth. Attempts to expand its domestic market are limited by the increasing scarcity of raw materials, which has raised both commodity prices and trade tension. And, as a latecomer to industrialization, it cannot easily dump its waste elsewhere, because the planet’s dumps are already full to overflowing.

Reckless GDP expansion has made the economy bulkier but less healthy. In 2007 the World Bank estimated the annual cost of pollution in China at 5.8 percent of its GDP.
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Take that away from the official figures and the “miracle” of Chinese growth shrinks to a level similar to that of Europe or the United States.

The 2007 estimate was conservative, taking into account only health costs, lost man-hours, 700,000 premature deaths a year, and damage to infrastructure and crops. Adding the costs of erosion, desertification, soil decline, and environmental degradation raises the figure to 8–12 percent of GDP, which would push China’s economy into reverse gear.
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Factor in
climate change and the country’s expanding consumption of nonrenewable resources around the planet and it becomes conceivable that China’s environmental crunch contributed to the global financial crash of 2008.

It appears obvious that growth cannot continue endlessly on a planet with finite resources, but back in Huaxi, the Number One Village in China, there was little prospect of any relaxation of the pace. Indeed, a new generation had new ideas about expansion. On my final day I met Wu Xie’en, unanimously “elected” village chief, local Communist Party general secretary and, of course, the son of Wu Renbao, the founding father.

Adopting the official language of “Scientific Development,” he told me that a clean environment was a form of wealth and spoke of his determination to shift the village’s economy onto a more sustainable path. But his priority remained social stability and fast growth. Even the national economy was laggardly in comparison with Huaxi’s. In the two years before my visit the turnover of the village’s companies jumped from 10 billion yuan (about $1.4 billion) to 26 billion. Wu predicted it would double again within three years.

“Anything that creates wealth is OK,” he told me. “The most important thing is to be open to new ideas, to do what works. It doesn’t matter if it is socialism or capitalism, both have advantages. China is changing. The countryside is changing. So is our way of thinking. Everything is improving.”

To celebrate the village’s sixtieth anniversary in 2021, he was planning to build a 118-floor skyscraper that would be taller than the Empire State Building. The cost, at 250 million yuan, was, he said, “no big deal for us.”

Huaxi represented more of a trajectory than a model. More than any single strategy or ideology, it was underpinned by a belief that living standards would keep jumping forward. Nobody minded mixing communism, capitalism, Maoism, or even Wuism so long as the end result maintained that most essential of modern Chinese “isms”: optimism. Confidence in change, in the belief that anything is possible underpinned the country’s growth and ensured a degree of public tolerance for pollution and other negative side effects. To maintain belief in this materialist dream, Wu Renbao and his family—like the politburo in Beijing—had to guarantee constant expansion. This could not go on forever.

In the previous thirty years, the original village of 1,500 households had swallowed twenty-six surrounding villages to secure more land for development. Including migrants, the population had swollen to more than
60,000. Residents were financially locked in to growth. Every year the villagers received a bonus, and every year 80 percent of it had to be reinvested in the commune.
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On paper, they were all rich, but their wealth took the form of shareholdings that they could never cash in. Anyone who left was forced to forfeit 90 percent of their paper assets.

But why would anyone want to leave a community that aimed to create a Utopia within its ever-widening borders? On my last day I was given a final tour of the village. At the center were the nine giant pagodas. Around them were rows and rows of houses, lined up in blocks like battalions of troops on a parade ground. Each block represented a different phase of development, a different level of affluence. The oldest homes were white villas, built in 1989. They were small but still significantly larger than most Jiangsu farmhouses. Next to them were streets and streets of uniform pale-blue two-story homes, which were considered the height of luxury when they went up in 2000. In the latest development, however, the wealthiest residents were moving into three-story European-style mansions with manicured lawns by the edge of an artificial lake. It was as though a century of economic expansion, architectural progress, and rising consumption had been compressed into twenty years.

The world’s greatest monuments had been given similar treatment. Huaxi World Park, located on the highest hill in the area, was a tourist resort with no tourists. Everybody appeared to be too busy working to see its wonders, which included a 10-kilometer-long reproduction of the Great Wall that curled between the fir trees on the hillside. The placement of other monuments was suggestive of Huaxi values. At the top of the slope was a symbol of Chinese power and autocracy, a scale model of the Forbidden City in Beijing that covered an area the size of a tennis court. At the bottom were foreign symbols of freedom and democracy: replicas of the U.S. Capitol, the White House, and the Arc de Triomphe.

Less than ten years old, these wonders of the world were already showing signs of wear and tear. The paint was flaking. The concrete was stained. They reminded me of the tatty theme parks and tourist resorts that had been hastily thrown up in Japan during the peak of its economic bubble. For locals, though, Huaxi World Park was proof of the glory of the Number One Village in China. That empire continued to grow. At the top of the hill my guide, Deputy Secretary Sun, pointed to slopes owned by a neighboring village. “We will expand there next,” he said. “We plan to use
that land to cultivate flowers.” After pesticides, aluminum, and steel, the “farmers” of the Number One Village were finally reverting to horticulture.

Perhaps one day, I thought, Huaxi will be a blaze of color. But for now, the Number One Village was mostly a monochrome gray of concrete, steel, and haze. Industry had put money in pockets, food on tables, and Buicks in garages, but I was quite happy to leave the stretch limo and the presidential suite behind.

Before I left, there was one last site I had to visit. “Huaxi Road” was a red-carpeted arcade that celebrated the wealth of the village’s original residents. The paint was flaking and the carpet soiled, but the displays were impressive. Suspended from the ceiling every few yards along a concrete path was a large portrait of a smiling family next to a detailed list of their household assets: the value of their property, average level of education, number of members of the Communist Party, and how many TV sets, fridges, computers, cars, motorbikes, and mobile phones they owned. It was astonishingly detailed, a public boast of rising living standards, of new money. It was a monument to materialism.

I looked for the portrait of my guide, Deputy Secretary Sun. Before liberation, the poster said, he had lived in a house of 40 square meters. Now his home was more than ten times bigger and he owned shareholdings and bank deposits worth 710,000 yuan ($101,428). The poster also listed one car, one computer, two mobile phones, two air conditioners, a camera, two TV sets, a stereo, a fridge, two phones, two motorbikes, a washing machine, and a set of redwood furniture. Knowing that he had come from a poor background, I told him how impressed I was. He shrugged, and not just from modesty.