Today's good, not so bad, and ugly on China
Barnett
¦"Soy Underwear? China Targets Eco-Friendly Clothes Market," by Mei Fong, Wall Street Journal, 17 December 2004, p. B1.
¦"Yuan-derful: Fixed or floating, up or down, the Chinese currency isn't a threat to anyone," op-ed by Jonathan Anderson, Wall Street Journal, 17 December 2004, p. A14.
¦"A Hidden Cost Of China's Growth: Mercury Migration; Turning to Coal, Nation Sends Toxic Metal Around Globe," by Matt Pottinger, Steve Stecklow, and John J. Fialka, Wall Street Journal, 17 December 2004, p. A1.
The good is oh so good. China is moving into environmentally friendly fabrics, like those made of soybean fiber, and this products are infiltrating markets in Europe and the U.S., where people actually care about stuff like that.
Here's the fascinating impact of that move:
China's involvement in the organic textile trade is likely to push down prices for these premium-priced products globally and help take them mainstream, textile producers say. Price differentials could narrow to the point where it becomes less of a niche product, says Dodie Hung, spokesman for Chinese apparel company Esquel Group. Esquel's cost for organic cotton, which must be handpicked, is about half of what it costs to grow organic cotton in the U.S., currently one of the top exporters of the material in the world.
See, not all the environmental news out of China is bad. In certain instances, the "China price" will actually push the Core toward environmentalism where it would otherwise not move to the same degree.
In the second piece, Mis-ter An-der-son (I've always wanted to say that in a sort of drawn-out Agent Smith sort of way) makes a neat case that the pegged yuan ain't the bogey man we're making it out to be. His most salient point?
Chinese exports have been penetrating European, Japanese and U.S. markets at a headline growth rate of 35% per year—but total Asian exports have not. Overall Asian market share has in fact grown very slowly, which means that for each additional dollar industrialized consumers spend on Chinese imports, imports from the rest of Asia actually fall. This is not because China is "outcompeting" its Asian neighbors; rather, Asian countries have simply moved low-end processing and assembly functions to China, as a final stop on the production chain before shipping off to Wal-Mart or Tesco.
Anderson's follow-on point is then that any correction of the yuan vis-à-vis the dollar wouldn't be the great fix everyone assumes it will be, especially since China basically pumps most of those bucks right back into U.S. Treasurys and secondary mortgage markets here in America.
As for the ugly, that's easy. China's skyrocketing energy requirements means its burning everything it can get its hands on, and what it holds most abundantly is loads of the dirtiest coal known to man. So all that increased energy means more coal burned means not only plenty of CO2 (though China is taking great efforts to reduce that particular impact overall) but also a crucial amount of mercury is being tossed into the air and sent over to North America thanks to the conveyer belt of high-altitude winds.
Why doesn't China stop this bad stuff from blowing over to our neck of the woods. It lacks a strong enough rule set on that particular pollutant. In the U.S., companies are required to slap on very sophisticated and costly smokestack scrubbing equipment, but in China you can just pay the fine and avoid the whole damn mess—or more accurately put, just shove to the next country over.
This is the rub of development: when you move from poor to rich, you do tend to decrease local pollution eventually, but you likewise tend to increase your contribution to global pollution. China's close to the tipping point on many forms of local pollution, because—frankly—it can only get so much worse before people rebel. But when it comes to global pollutants, the world needs to enmesh China in the same entangling global environmental deals that the U.S. signs up to.
What about Kyoto? Our main complaint on that global warming pact was that it excluded rising New Core powers like China and India.
And know you know why that's a big missing ingredient. |
