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Vital Signs 2005: The Looming China Syndrome
Alex Steffen, 13 May 05

Joel Makower is a frequent contributor to WorldChanging:

China has emerged as a global force that is driving consumption and production of almost everything through the roof, according to Vital Signs 2005, the latest annual pulse-taking from the venerable Worldwatch Institute, published today.

This isn’t exactly news. For years, hand-wringing “what-if” scenarios have considered the environmental impacts of a billion-plus Chinese aspiring to Americans’ levels of consumption. But, as Vital Signs shows, those scenarios are no longer hypothetical. Exploding growth in China is helping to boost the global economy, but it also is driving up consumption of natural resources, increasing prices of essential raw materials, and pushing up pollution levels around the world.

Example: China’s building boom has helped push world steel production up by a third over the last five years. China now produces just over a fourth of the world’s steel -- an essential input for its mushrooming industrial and urban infrastructure, as well as for the production of cars and other goods, and is a voracious buyer of steel from other countries, leading to shortages and price spikes in some areas.

“In terms of scale, it is as if all of Europe, Russia, and North and South America were simultaneously to undertake a century’s worth of economic development in a few decades,” says Worldwatch.

Steel is just the beginning. China is using its massive foreign exchange earnings from being the world’s low-cost manufacturer of choice -- producing goods for the Gaps, Walmarts, and Reeboks of the world -- to buy up other resources from around the globe. The global grain harvest shot up by 8% to over 2 billion tons last year, driven in part by China’s rising consumption and changing diets. Production of meat and fish -- the latter increasingly derived from environmentally problematic fish farms -- also hit new highs. One result is that grain reserves are at historically low levels, leaving the world vulnerable to higher prices should this year’s harvest be hurt by adverse weather, says Worldwatch.

“From Africa to South America, Chinese and Indian companies are now competing with American and European firms for access to the few remaining frontiers of the world oil industry. This struggle for supplies is likely to intensify in the next few years. The biggest losers will be countries that have virtually no impact on the world oil market -- poor oil-importing nations in Africa, Asia, and Latin America.”

In 2003, China passed Japan to become the world's second largest petroleum consumer. The International Energy Agency predicts that by 2030 China will import 10 million barrels per day, equal to the current U.S. total and almost twice Japan's current level. Where all that oil will come from -- and how much it will cost -- is anybody’s guess.

It’s not simply a question of energy supply. It’s also a matter of global security. According to a recent report by the Houston Chronicle, China's willingness to cut oil deals with nasty regimes already has begun undermining American policy priorities:

”Beijing shuns the spot oil market in favor of long-term contracts and investments in producer countries. When it does so in pariah states that Washington is trying to isolate, China's actions contravene efforts to stop nuclear proliferation and promote human rights. And in oil-exporting capitals where Washington's policies are unpopular, Beijing may be supplanting the United States as customer-of-choice.”

The good news is that China’s surging demand for new, cleaner energy technologies -- wind, solar, and biofuels derived from crops and agricultural waste -- will help power the growth of renewable energy.

Indeed, China (as well as India) is well positioned to claim the leadership role in renewables now held by Europe and Japan (and, poignantly, not by the U.S.). China’s just-adopted energy law, which takes affect next January, will accelerate its already fast-growing renewables sector. China has huge potential for solar, wave, tidal, and biomass power and -- coupled with energy efficiency -- could meet all of its energy needs solely from renewables, say experts.

Even still, says Flavin, “recent developments suggest that the world economy will be coping with the downsides of its voracious material appetite for decades to come.” And even if predictions about China’s clean-energy revolution come to pass, it could be decades before it puts a dent in the currently rising levels of greenhouse gas emissions that are altering the world’s ecological systems.

It’s not just China, of course, or even developing countries. Although rapidly developing nations with growing populations will increasingly leave their mark, “industrialized countries with relatively small populations but sky-high consumption patterns remain a major threat to the global environment,” says Worldwatch. For example, although the U.S. population is only about one-fourth the size of India’s, Americans have a much larger ecological footprint, with 15.7 million tons of U.S. carbon outputs released into the atmosphere, more than three times India’s 4.9 million tons.

The vital signs aren’t all bad. One positive indicator, says Worldwatch, is that the world’s tourists increasingly are supporting travel companies that are accountable to local communities and the environment. For example, travelers can also now choose an airline that will offset the carbon emissions produced by their flights: A person flying round-trip between London and Rome can pay $17.23 to account for her share of carbon -- about a half a ton’s worth -- released during the flight from the burning of jet fuel. And a growing number of tourists are seeking alternatives to conventional “mass tourism,” with eco-friendly destinations garnering increasing interest among the 760 million international tourism arrivals last year.

Presumably, several million of them will be going to China each year. And looking to live the good life in a country increasingly able to provide it.

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Comments

Check out Elizateth C. Economy's book "The River Runs Black" for a really interesting slant on what's happening in China as it gains power and influence in the world. The news here isn't all bad and a lot of credit must go to the Chineese people themselves who are emerging as responsible stewards of the earth dispite a sometimes inflexable, despotic government.


Posted by: Carl Schellenberg on 13 May 05

Hmm. China isn't the only one to trade with dubious "pariah" states. Have you seen Saudi Arabia's human rights record recently? Or the USA's? (eight times the prison population of Europe). Or Azerbaijan? Dick Cheney has visited there 4 times in the last 12 months. And his mission has not included better treatment for political prisoners. Securing oil supplies is a sad business.

John


Posted by: John Norris on 14 May 05

The GULF of guinea is almost as established as the Arabian gulf in terms of its oil reserves. The regimes, from Equitorial Guinea, to Gabon, Cameroon and Sao Tome & Principe cannot boast a single democrat or benevolent dictator amonsgt them. Yet, there are direct flights between houston and malabo and no direct flights between the US and Nigeria, the most populous country in Africa. The oil economy lives on..


Posted by: Fidelis Ndeh-Che on 14 May 05

Fidelis,

Since Nigeria is one of the largest non-North American suppliers of oil to the USA, I think you're going to have to find a different explanation for why there are no direct flights.

China's growth is of course very important, perhaps THE most imortant new variable in this era. That being said, don't be midled by their import numbers alone. Many of the things China imports (including oil) are turned into manufactured products and shipped right out again. A good example if cotton. China probably saw a 8 bajillion percent increase in cotton imports this year, but that was just shifting of supply due to the quotas being lifted, rather than actual growth in the world economy.

What China absolutely has to do is become more energy efficient. They currently spend 7x as much energy producing a $1 of output than the USA. If they can become efficient fast enough, oil imports need not grow nearly as fast.


Posted by: Cardozo Bozo on 14 May 05

Would someone please explain to me what China and India are going to do when the glaciers in the Himalayas disappear. All this projected growth always seems to miss the point. These places are headed for severe water shortages and therefore food shortages.


Posted by: PeterW on 14 May 05

China rocks


Posted by: Ken on 15 May 05

Fidelis,

Its all in the packaging. South Africa emerged post-apartheid as a middle-income economy and the largest and most developed on the Afican continent. China has a gloomy history of human rights violations. But what these and other fast growing emerging countries have in common is that they market their potentials to the World and putt themselves on the world map of countries to be reckoned with. You better recognise that the underdogs are rising. The countries in the Gulf of Guinea need to rise and package their potentials to the world, otherwise they shall remain the underdog in the league of oil producing nations. A bien tot


Posted by: Amanda on 19 May 05



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