In my last blog I touched on the impact of China’s environmental problems on its economy and infrastructure. A recent (as yet unofficial) report to published by the Chinese government suggests that air pollution caused by, amongst other things, industrial production and vehicle exhaust fumes is seriously curtailing the sustainability and durability of China’s buildings, especially in the major cities. One of the worst affected areas is the northern province of Shanxi which includes the city of Datong, known colloquially as “Coal City”. I went to Datong as a student back in 1991. I recall coal dust coming up to my ankles as I walked along the main high street and buildings blackened by coal dust! According to the report, the “lifespan” (i.e. period of time before renovation is required) of buildings constructed in the last 5 years in Shanxi Province is now 5 years shorter than originally anticipated. This will have a seriously detrimental impact on economic development in one of China’s key industrial hubs. 

A few years ago Shanxi Province was also the subject of an experiment pioneered by the Chinese government to measure its economy with reference to “Green GDP”. This is the size of the economy after it has been “deflated”, taking into account the amount of economic activity that had been achieved by degrading the environment. So “deflated” constitutes: (i) what is extracted from the environment in terms of natural resources used in economic development (e.g. water, minerals) and (ii) what is “put in” to the economy in terms of pollutants. Not surprisingly, Shanxi’s “Green GDP” was much lower than its “non-Green GDP” – less than 1% as opposed to 11.7%. Also, not surprisingly the Chinese government quickly abandoned this experiment following resistance from local government.