Since the Kyoto Protocol comes into force today, it seems like a good moment to say: Cool, and what next? Kyoto and other international agreements need to reckon with the reality that, developing or no, China is the new economic powerhouse.
The new economic powerhouse 3
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Posted 5:08 AM on 16 Feb 2005
by Shalini Ramanathan -
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This book review of China, Inc. scares me. While green design and social responsibility have taken firm root in Europe and are penetrating the American consciousness, China, as this book review makes clear, is a ruthless economic machine devoted to one thing only: undercutting everybody else's prices. (I wouldn't want to be the one introducing CSR in sweatshops staffed by desperate ex-peasants churning out plastic bunnies, way cheaper than anyone else can make plastic bunnies.)While a lot of thought has been devoted to dealing with the environmental problems within China, and of course China's considerable contributions to global warming, I haven't seen as much written on the impact that the country's coming economic ascendancy will have on environmental laws and regulations. What is the plan for greening commerce and supply chains in China? How do you regulate industries when hundreds of small businesses sprout up overnight? Who's going to be brave enough to introduce energy efficiency products in a land where copyrights are not protected?
Shalini Ramanathan is a project developer with Africa Clean Energy and is based in Nairobi, Kenya.
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neptune17 Posted 6:33 pm
19 Feb 2005
force that will need to be reckoned with, but people
had similar thoughts about Argentina, and look
at them now.
China is not Argentina, but no one can predict
long-term economic outlooks with any certainty.
I don't mean this to be a cop-out or a catch-all
statement. What I mean is that accurately
predicting economic futures depends on getting
honest data, being honest with oneself and being
open to contrarian conclusions.
Good economic growth can mask horrific loan practices.
Contrarians who warn against economic bubbles are
derided as sandbagging prosperity. And everyone can
cook books.
Finding an economic authority with good data,
honesty to himself and honesty to his audience
is rare, to say the least.
No one saw Japan's liquidity problems of the 90's
coming. No one knew the USSR was on the brink of
economic collapse. Who would have thought that the
US would make the turnaround from being the world's
largest creditor to becoming it's largest debtor in
such a short period?
China's biggest export market (the US) is facing a
declining currency, while it's biggest source of
imports (Japan) is trying it's darndest to keep it's
currency from shooting up (as is China). That
situation puts a BIG question mark on everything,
and something eventually has to give.
I'm not saying China will not be a force to be reckoned
with. It's size and economic advantages point to that
eventuality. All I'm saying is that how this plays out
is anyone's guess.
As for China's economic clout, as long as it needs to
import raw material and export goods, it will have to
act within certain boundaries that do not distress
it's trading partners too much.
Just as the EU can put economic pressure on the US
through tarrifs, citing economic advantages of
clandestine subsidies, Kyoto-following economies
could put tarrifs on China, citing economic advantage.
If the US followed suit (or ran out of currency),
China would almost have to comply.
In other words, China cannot lead any downward spiral
in labor practices or environmental policy without
cooperation from other economies. It really depends
on different countries' prioritizing of social and
environmental policies versus cynical economics.
With the right leadership, anything can happen.
At least, that's how I see it....
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neptune17 Posted 7:26 pm
19 Feb 2005
of China. He sees that China's economic infrastructure
can be built on the best technologies in the world,
which can mean high energy efficiency, among other things.
Remember that given China's size and capacity, any
inefficiencies it ignores only puts upward inflationary
pressure on the things it imports. Unless it follows
a model like the US' dependance on oil, China has
every reason to be efficient.
Efficiency can also mean cutting corners on labor
and environmental policies, but China has to keep Kyoto
in mind, if it turns out to take root. The more China
"emerges" economically, the less consideration Kyoto-
following countries will give it.
Besides, there is only so much economic growth a
country can squeeze out of its people through raw
labor and exploitation. In order to sustain growth
and avoid diminishing returns, a country has to
eventually give it's people upward mobility so that
they can go to school and live a life that allows
productive creativity to blossom. The only way to
avoid labor-intensive diminishing returns is to
figure out a way to work smarter, not harder.
It's 4am, so I don't think I am describing this
the way I want to, but read Paul Krugman's
The Return of Depression Economics. The section
on Thailand's economic "growth" says what I want to.
Obviously, I can't say what will happen in the future,
but just take a look at how progressive and environmentally
conscious the world's largest economies are and compare it
to the economies that exploit its people and scar its land.
China does hold the key to adoption of green policies,
though. I mean, countries only forego green policies
if someone is undercutting them. (I'm generalizing.)
If China goes green, who would undercut them?
OK, maybe South America, but after them, you'd have
to start worrying about penguin labor.
(It really is 4am...)
* - Jim Rogers is a billionaire who built up his
fortune along side George Soros. His new book
is titled Hot Commodities, and it talks extensively
about China.
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Shalini Ramanathan Posted 3:32 pm
20 Feb 2005
i will look up Hot Commodities, thanks for the suggestion.
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