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Keeping up with China's Olympic shine - Part II

By Alexandra Harney - posted Monday, 6 October 2008

Beijing may have delivered its best air quality in a decade for the Olympic Games last month, but many Chinese in other parts of the country continued to live under a canopy of haze, breathing air that prompted American athletes to arrive wearing face masks.

Before critics in the West point fingers at China for soiling itself, they should consider their own role in contributing to the problem. Western consumers and companies enjoy the benefits of China’s polluting factories every day, and must bear more of the responsibility for helping these plants clean up.

The products the West buys from China are cheap in part because they do not include the full costs of environmentally-safe production. To keep costs down and enhance its competitive advantage, China has chosen to selectively enforce its environmental laws.


While Western companies generally follow the law at their wholly-owned facilities, many take advantage of China’s lax enforcement by pressing suppliers there to continually lower their prices. Companies provide few, if any, incentives to plant managers to behave responsibly. The West’s appetite for the $30 DVD player and the $3 T-shirt helps keep Chinese factories spewing toxic emissions into the air, pouring industrial waste into the waterways and damaging the health of employees.

China is paying a high price for its success as the world’s manufacturer. The costs of China’s outdoor air and water pollution now amount to $100 billion a year, according to the World Bank. Air pollution contributes to perhaps 750,000 deaths every year. Some 150 million Chinese farmers may eventually have to leave their land because of pollution and become “environmental refugees”, according to the country’s top environmental official. In 2005, there were almost 1,000 protests about environmental pollution every week in China.

Multinational companies play a direct role in exacerbating these problems, though the scale of their contribution is difficult to determine because most keep the identities of their thousands of suppliers a secret. The handful that do publicly disclose their suppliers, including Nike and Timberland, identify the factories by their English names, complicating the process of tracking them down in China.

But occasionally, this veil of secrecy is drawn back, and the connection between our shopping habits and China’s pollution becomes clear. In 2006, Chinese authorities fined a Hong Kong-owned textile manufacturer that counted Target, JC Penney and Land’s End among its customers, for dumping 22,000 tons of contaminated water into the Mao Zhou River.

Factory managers, who must work and live in a cloud of smog and next to black rivers, know that their neglect of environmental laws comes at a price. In the case of Fountain Set, the Hong Kong-owned textile maker, officials said the factory had created fake records to conceal its illicit effluent. But few managers think much beyond the next order. They ignore the larger, longer-term consequences of their behaviour.

That’s because most Chinese factories face little pressure from government officials to clean up their act. They answer to their customers, including multinationals, who expect low prices and high quality and rarely bother to check whether their suppliers are known polluters.


One sourcing executive at a large American computer brand complained to me that on her visits to factories in China, the air was almost unbearable. It never occurred to her that her suppliers might have something to do with the choking air. As a senior official at China’s health ministry told me, foreign companies “brought dangerous work and pollution and left with the profits”.

We are just starting to get a whiff of the deleterious effects of the West’s pursuit of ever-cheaper goods. Scientists at NASA and other organisations have tracked the movement of pollution from China to the West Coast of the United States. Both Japan and South Korea suffer from acid rain as a result of China’s coal-fired power plants.

Most of the time, though, shoppers in the West select their bargains in happy ignorance of the consequences. More than a decade after activists targeted Nike for buying from sweatshops, most companies tell us nothing about the environmental impact of their international sourcing. And why should they bother? None of us seem to care.

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Reprinted with permission from YaleGlobal Online - - (c) 2008 Yale Center for the Study of Globalization.

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About the Author

Alexandra Harney is the author of The China Price: The True Cost of Chinese Competitive Advantage (Penguin Press, 2008). Click here to read an excerpt.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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