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Address external response of environment issue and market failure behind the growth of Chinese economy and the impacts on Chinese sustainable development
China is the one of the fastest developing nation in the world with the largest population of 1.3 billion. With the reform and opening-up since 1978 that significant economic and social changes transferring from central-planned economic system to market-oriented economy, Chinese economy has developed dramatically and remarkably. However, GDP per capita in China is still low and Chinese economy is lopsided distributed between richer coastal cities and less-developed western areas. High migration rate promote to fast urbanization which result in significant increase of income disparity between rural and urban areas and current poverty in Chinese rural areas is also a great problem. This is a significant market failure in China. The fast growth of Chinese economy, urbanization and industrialization has contributed high stresses on environment that greatly hurt to human survival and health and natural resource. Nowadays, the Chinese government and local government significantly pay attentions to problems of environmental pollution and environmental deterioration, and put forward to ideas of ‘scientific development’ and ‘harmonious society’ to balance economic development and environmental protection. However, China is facing serious challenges of environmental issues, involving shortage of water and farmland resource, fragile foundation of agriculture, and serious desertification phenomenon in drought areas, strong stresses on eco-systems and poverty problems in some Chinese areas, and severe water and air pollution.
In this paper, it mainly addresses external response of environment issue and market failure behind the growth of Chinese economy and the impacts on Chinese sustainable development, it find out there is negative relationship between rapid Chinese economic development and market failure & environmental pollution. In recent years, China has achieved sustainable development: stable growth of production of grain and other important agricultural products with increasing reformative framework; growing meliorate safety and quality of products in agricultural industry with sufficiently reinforced competitiveness; fast improvement of agricultural industrialization and increasing expanding agricultural special cooperative corporations and organizations, etc. In addition, there are approaches of Chinese sustainable development to respond to market failure and environment issues, which involves that: building a comprehensive systems and mechanisms of environmental regulations and laws; designing and identifying scientific development plans; enhancing policy systems to advantage and strengthen agricultural industry; enhancing budgetary funds; enhancing and reinforcing controls in desertification and drought; improving protection of rural ecologies and farming resource; strength encouragement from education, technology and science.
Chapter one: Introduction
Ecological environment protection and ecological balance is very essential and crucial for economic development and social progress in today’s world. In the toady’ world, with the development of industrialization and rapid economic development, current worldwide people face serious major problems, involving rapid growth of population, environmental pollution, food shortage, energy crisis and resource destruction, which are negatively inter-influenced and significant impacts on process of socio-economic development. It is widely that environment problems are the type of market failure. With social progress and industrial civilization and accompanying with global ecological and environment crisis, sustainable development plays an important role which can help to promote to harmoniously ecological development between human-being and nature. Therefore, in this century, environment issues, market failure and sustainable development have been significantly concerned by many countries and various organizations.
China is the largest developing nation in the world with more than 1.3 billion populations. With the reform and opening-up since 1978 that significant economic and social changes transferring from central-planned economic system to market-oriented economy, Chinese economy has developed dramatically and remarkably. According to Chinese Statistic Bureau (2009), GDP increased from 364.52 billion Yuan to 25148.32 billion Yuan and per capita GDP increased from 381 Yuan to 18,934 Yuan between 1978 and 2007. The real GDP growth rate in average has increased 10.2% in the last 15 years. World Bank (2009) points out that Chinese GDP ranked the third of 386 billion US dollars followed by the United State and Japan. In addition, increasing roles of market forces and high foreign direct investments have significantly promoted Chinese economy to integrate to global economy. However, with more than 1.3 billion populations which occupies approximately 20% worldwide populations, GDP per capita in China is still low of about 2912 US dollar which ranked the 98th (The world bank, 2009), and Chinese economy is lopsided distributed between richer coastal cities and less-developed western areas. High migration rate promote to fast urbanization involving more than 43% of population, which can result in significant increase of income disparity between rural and urban areas and current poverty in Chinese rural areas is also a great problem. This is a significant market failure in China.
The fast growth of Chinese economy, urbanization and industrialization has contributed high stresses on environment that greatly hurt to human survival and health and natural resource. Nowadays, the Chinese government and local government significantly pay attentions to problems of environmental pollution and environmental deterioration, and put forward to ideas of ‘scientific development’ and ‘harmonious society’ to balance economic development and environmental protection. However, China is facing serious challenges of environmental issues, involving shortage of water and farmland resource, fragile foundation of agriculture, and serious desertification phenomenon in drought areas, strong stresses on eco-systems and poverty problems in some Chinese areas, and severe water and air pollution. For example, air pollution is very serious in some Chinese cities that air quality is considered as the worst in the world; energy intensity is approximately one fifth higher than that of OECD countries in average; more than 35% water resources such as rivers and lakes are polluted (Ministry of environmental protection of the people’s republic of China, 2009). Owing to rapid Chinese economic development but serious environmental pollution and deterioration, there are many criticisms for China. Mass media and Western countries comment on market failure of China such as serious environment pollution, huge population and increased growth rate of population and uneven economic development between coastal provinces and western areas.
Therefore, the research objective is “addressing external response of environment issue and market failure behind the growth of Chinese economy and the impacts on Chinese sustainable development”. Specifically, research objectives include in these following aspects:
(1) it studies external criticize Chinese environment issues and market issues;
(2) it studies the relationships between rapid growth of Chinese economy and two aspects with environment issues and market failure;
(3) it discusses the achievement of sustainable development to response to external criticism;
(4) discuss influences of sustainable development in China;
(5) it discusses challenges of sustainable development in environment issues.
In this paper, it divides into five chapters. The first chapter is Introduction. The second chapter is Literature Review which involves Chinese economy, environment issues with environment pollution and environmental sustainability index, relationship between the development of economy and environment and sustainable development. The third chapter is Methodology Research. The fourth chapter is Finding and Analysis. The fifth is Discussion and Conclusion.
Chapter two: literature review
2.1 Chinese economy
In the last 3 decades, the fast growth of Chinese economy as a major economic power is considered as one of greatest successful economic country. With experiencing huge changes of society and economy, Chinese economy has successfully transferred from a central-planned economy in 1978 to a current market-oriented economy. Chinese economic is dramatically rapid with GDP increasing from 364.52 billion Yuan to 25148.32 billion Yuan between 1978 and 2007 which GDP of 2007 was nearly 69 times, real per capita GDP was nearly 10 times, and annual rate of GDP was 14 times than that of 1978 (Chinese statistic Bureau, 2009). The International Monetary Fund (2009) points out that Chinese economy develops dramatically since the economy reforms in 1978, and is the second largest in the world followed by the USA which GDP reached a 7.8 trillion US dollar in 2008 based on purchasing power parity; is the third largest worldwide economy followed by the USA and Japan with nominal GDP of 4.4 trillion US dollar in 2008 based on exchange rate (the World Bank, 2009). According to Chinese Statistic Bureau (2009), Chinese economy has been the fastest-increasing for the past 30 years with annual growth rate of GDP in average are more than 10.2%. The Bank of China (2009) points out that Chinese per capita income has increased over 8% of annual growth rate in average in the last 30 years which can greatly decrease poverty and unemployment but the fast economic growth to some extent result in income and economic inequalities. With the rapid economic growth and economic development, Chinese economy is unevenly distributed between richer coastal cities and less-developed western areas，and between urban and rural areas. According to Chinese statistic Bureau (2009), annual per capital net income of urban households and rural households were 13,786 and 4,140 Yuan respectively, and annual per capita consumption expenditure of urban and rural household were 9,997 and 3,224 Yuan respectively.
2.2 Environment issues
2.2.1 Environmental pollution
Environmental pollution regards to various contaminants into an environment that lead to disorder, discomfort and/or damage to environmental ecosystem which can negatively influence human-being survival and health, and other life-form survival. According to the WTO (2009), these ten top countries are considered the worst polluted nations in the world involving Azerbaijan, India, Russia, China and Peru. There are major environmental forms including air pollution, water pollution, soil contamination, piles of rubbish and noise. According to Wilson et al (2009), air pollution means release of particulates and chemical into the air and mainly air pollutants are chlorofluorocarbons, carbon dioxide, sulfur dioxide and nitrogen dioxide which mainly result from motor vehicles and industrial companies. Water pollution means release of water products, wastewater and contaminants polluted to river, lake and sea. Noise pollution refers to aircraft noise, roadway noise, industrial noise and high-intensity sonar.
According to United Nations Environment Programme (UNEP, 2009), “global environment outlook: environment for development” (simply called GEO-4) issued by UNEP points out that these problems of climate change, species extinction, increasing population and environmental pollution seriously threat to human-being survival and health. GEO-4 is one of the most important and newest reports by UENP that significantly measures environmental issues such as climate change, water pollution, biological diversity, air pollution, and desertification and so on.
According to United Nations Environment programme (2009), more than 100 countries around the world face different degree of water shortage and more than 17 billion populations can not access to enough drinking water, and more than 75% rural population and more than 20% urban population in many developing countries can not access to safe drinking water and water sanitation system. Many experts predict that shortages of freshwater resource in the Earth will be more serious in the further 20-30 years; and more than 50 countries and regions will experience severe water shortages; approximately 28-32 billion population will not obtain enough drinking water and per capita volume of water will be less than 1000 cubic meters in the next 2-3 decades (WTO, 2009). For example, China is the 13th water-shortage country in the world and per capita water resources is 2,300 tons which is just 25% of worldwide per capita amount (WTO, 2009; Ministry of Water resources P.R. China, 2009). According to Ministry of Water resources P.R. China (2009), about 380 Chinese cities lack freshwater and 128 cities seriously lack drinking water among Chinese 668 cities, annual water shortage in Chinese cities reach more than 5.8 billion tons, which will lead to economic loss of industrial output of more than 230 billion Yuan.
According to United Nations Environment programme (2009), worldwide desertification areas increased from 3.475 billion hectares to 3.592 billion hectares between 1984 and 1991 which occupied about 25% of worldwide land area. It influences one sixth worldwide populations of about 900 million people and more than 100 countries and regions. It is estimated that 3.5 billion hectares around the world were negatively influenced by land desertification, involving 27 million hectares irrigated lands, 173 million hectares dry land and 3.071 billion hectares pastures (WTO, 2009). In the expansion rate of desertification, more than 600 million hectares of worldwide lands annually become dessert, of which 3.2 million hectares of pasture, 250 million hectares of dry-land and 12.5 million hectares irrigated lands. In addition, more than 21 million hectares lands can not grow grains and crops every year.
According to FAO (2009), it has issued the “global forest resource assessment 2005”. It reported that existing forest area in the world was nearly 4 billion hectares and occupied about 30% of the land areas in the Earth; and of which two thirds mainly concentrated on 10 countries involving Australia, Brazil, Canada, China, Democratic Republic of Congo, India, Indonesia, Peru, Russia and the United States. This report in 2005 also state that there are about 13 million hectares of forest in the world being destroyed every year since 1990, and the South America has been seriously destroyed in the worldwide forest damage followed by the Africa and the Oceania.
Resource and energy shortage
According to United Nations Environment programme (2009), the global total energy consumption of oil resource will increased 10.24 billion to 16.2 billion tons between 2001 and 2025, and worldwide energy consumption will increase by 54% in the period of 2001 and 2025. Japanese and the European Union Energy Agency also estimate that global energy consumption will reach the peak in the period of 2020 and 2030 (BP World Energy Statistics, 2009). The depletion of global energy resource is inevitable which will be depleted at the end of this century. According to the BP World Energy Statistics (2006), it estimates that global oil production can only supply for 40 years, natural gas can only supply for 65 years and coal only supply for 155 years.
Disaster of garbage and hazardous waste
With the development of production and improvement of people’s living standards, emissions from garbage and hazardous waste is growing rapidly while stacking and disposal sites of garbage are increasingly decreasing. According to WTO (2009), it is estimated that global annual garbage generated is nearly 10 billion tons, which developed countries make up large proportion. Currently, the speed of waste disposal capacity innovated is far slower than the speed of rubbish generated. A lot of rubbish is un-biodegradable or break down very slowly so that there is rapid increase of ‘junk mountains’. Water and garbage seriously harm to human survival and health because some waster is toxic and flammable, and has corrosive and radioactive species. Hazardous waste can be defined as waster has radioactive, chemical activity, toxic, explosive or other hazardous characteristics to harm to human, animals, plants and environment.
With the rapid development of economy, science and technology, hazardous waste is growing increased. According to United Nations Environment Programme (2009), it is estimated that worldwide hazardous waste occupies about 10%-20% of industrial waste, and chemical waste is the most important components of industrial hazardous waste. For example, in the USA, 60% of hazardous waste is from chemical industry, 10% is metallurgical industry, 5% from petroleum processing and 6% from coal processing (Wastes, 2009). Furthermore, in recent years, hazardous waster generated in developed countries make up large proportion, therefore, the trans-boundary movements of hazardous waste events often happen. For example, the United States can produce 8-9 billion tons of hazardous waste every year, and more than 10 million tons are disposed through cross-border transferring waste to other countries and regions, such as more than 1.5 million tons of industrial burning ash in Philadelphia are directly dumped in the Gaze Guinea Island (Wastes, 2009). From development trend of waste in recent years, it is more prominent that developed countries dump hazardous waste and garbage to developing countries and un-developed countries, which will lead to huge threats and losses for developing companies and un-developed countries.
Pollution from toxic chemicals
Toxic chemicals are mainly from factory waste, emissions of industrial waste gas and wastewater, chemical waster, fertilizer and pesticides. According to United Nations Environment Programme (2009), there are 7-8 million kinds of chemical, and there are more than 35,000 kinds hazarding to human health and ecological environment, and more than 500 toxic chemical types are carcinogenic, teratogenic and mutagenic.
Chemical pollution can spread to large areas, countries and even global through water and air, which becomes a global environmental problem. For example, on the December 2, 1984, a U.S. Union Carbide subsidiary company in Bhopal of India leaked 40 tons of toxic gas which total death reached 8,000 people and more than 50 million injured people, and death amount currently reach more than 20,000 people.
2.12 Environment sustainability index (ESI)
The environment sustainability index benchmarks capability of countries to protect environment in following several decades, which combines 76 data-set to track natural resource endowments, pollution levels in the past and current, effect of environment management’s influences and efforts and social ability to enhance environmental performances and promote environment protection and environment sustainability. There are 23 indicators to measure ESI as shown in Table 1, which can be divided into following five wide aspects: environment systems, decrease environmental pressure, decrease human vulnerability to environment pressures, global stewardship and global consciousness of environment protection and environment sustainable, institutional and social capacity to responds of environment pollution and challenges.
There are many suggestions of ESI. Firstly, the ESI has proven to be an efficient standard of national environmental stewardship, which can offer valuable measurement of environmental protection and environmental performance with integration of economic development and social development. Secondly, ESI also indicates important differences of present environmental performances and possible long-term trends, as well as offers powerful and efficiently approach to track current environmental outcome, environmental issues and designs and implement corresponding environmental policies. In addition, ESI suggests environmental sustainability should be implemented at local-level, national-level and global level; and offer a grater data-driven environmental decision-making and environmental analysis. Thirdly, ESI suggests some important determinant factors of environment protection and sustainable development involving vitality in economy, low density in population, governance’ quality. Furthermore, ESI also suggests strengthening environmental policies and environmental laws and regulations particular in developing countries to achieve large-scale environmental protection and environmental development for current generations and further generations. In addition, ESI also suggests to harmonious focuses on between social-economic development and environmental pollutions and development.
According to 2005 Environmental Sustainability Index (2005), the higher a national ESI score, the greater maintenance of environmental conditions and environment protection into the future. There are five highest-score nations involving Iceland, Finland, Uruguay, Norway and Sweden, based on low density of populations and substantial natural resource endowments. These five countries have a relatively sustainable development and environment protection compared to other companies. In addition, there are lowest-score countries involving Uzbekistan, Iraq, Turkmenistan, Taiwan and North Korea which ranked the last five of ESI rank in 146 countries; and these countries confront to numerous challenges in both human and natural and have not greatly managed their environmental policies in their countries.
2.3 Relationship between the development of economy and environment
2.31 The destructive and negative impacts of traditional economic development on environment
Since Europe break out the industrial revolutions in 1960s, agriculture-ground natural economy has been gradually substituted by enginery-and machinery-ground economy. Owing to industrial revolutions and huge productivity, current society can be rapidly developed and progressed, as well as human-being life can be positively changed and greatly improved. However, owing to industrial revolutions and huge productivity such as establishing thousands of machines and factories, it can cause seriously negative influences on natural ecological environment. For example, environment pollution in agriculture and emissions of industrial contaminations have seriously destroyed ecological environment, including pesticides, chemical fertilizers, pollutions result from industrial revolutions and other characteristics. Liu (2009) points out that agricultural pollution greatly and negatively influences quality of farms and cultivated lands; and leads to lands desertification and salinization, and decrease of soil fertility. It also can directly influence on cities’ populations, climate, environment and development of economy.
Industrial pollution is an important characteristic of environment pollution in recent 2 centuries. Zhou (2005) proposes that ‘three wastes’ (waste gas, waste water and solid industrial residue) have not only severely polluted natural ecological environment, but also can hurt human’s survival. For example, smog incident happened in Donora town in the USA in 1948, which 44% of over 10,000 populations suffered from serious vomiting and headaches and difficulty in breathing, even caused death of 17 people. The main reasons are that Donora town is located in valley with many industrial factories in both sides, emissions from great transport vehicles result in serious air pollution and then result in severe negatively results. In addition, many people are worrying about pollution of Volga River Basin as the largest river in Europe and worrying about greatly decrease of safe drinking water recently, because there are more than 50% of industrial waste and sewage in this Volga River (Liu, 2009). This industrial waste and sewage not only includes waste water and compounds, but also involves oil and radioactive substances, heavy metal and various toxic substances. Furthermore, solid waste and garbage pollution is also serious. Thousands of garbage and rubbish have occupied much space, polluted ecological environment and caused many potential hazards. These garbage in a long time can spread diseases and cause water and air pollution which is not only endangering survival of animals and plants, but also is endangering human-being’ health.
Furthermore, industrial production and R&D (research and development) particular in heavy industries can result to invisible and intangible pollutions to human survival and health, such as electromagnetic pollution, noise pollution and nuclear radiation pollution. Human is gradually aware of environment deterioration and pollution, and they realize both importance of economic development and great environment. To some extent, it is abnormality to environment pollution and deterioration in exchange prosperity and benefits in social and economic development, as well as destructive and negative impacts of traditional economic development on environment. Therefore, the right path to development and growth of economy has to achieve unification and consistency of economic and social benefit and ecological environmental benefits.
2.32 Coinstantaneous pay attention to two new global economic development and environment protection
After development of industrial and agricultural economy, there are two important emerging economic situations in the world which are circular and knowledge economies as crucial role to social and economic sustainable development. According to Wang (2007), knowledge economy means that knowledge, modern technology and/or modern science play an important role in the process of social progress and reproduction, and can promote to gradually combine knowledge and modern technology with economic integration. It involves various high-tech industries with using knowledge and modern technology & science to transform agricultural industry, industry and the tertiary industries with environment. In the knowledge environment, it is greatly promising to develop biotechnology, environmental technology, and communication technology. Environment technology as a new economic category is becoming a newly important role to economic development. For example, problem of acid rain in European countries has received significant attention in the early 1980s. Germany has implemented serious laws and regulations of environment issues to hasten to developing and utilizing desulfurization technologies. In order to hasten to development of flue gas desulfurization technologies, Germany invested total 14.3 billion Marks on desulfurization equipments between 1983 and 1988 (Mao, 1995). Desulfurization technology to some extent not only greatly recline environment pollution such as acid rain, but also benefit to the development of environmental industry and promote development of whole Germany economy to a new and greater level. Therefore, environmental industry doesn’t just provide great environmental services and equipments to decrease losses resulted from environmental deterioration and pollution, but also promote current economic systems to upgraded technologies. According to Ministry of the Environment of Government of Japan (2009), it is widely recognized that environment pollution as the ‘springboard’ of upgrading technologies, and Japan greatly emphasis on environmental industry and environmental protection in 21st century.
China as a developing country have not completed the process of industrialization, and to some extent has not great quality and ability for the Chinese sustainable development which problems and disadvantages result to environment deterioration and environment pollution. Therefore, it is very important to decrease distances between developed nations and China, obtain industrial development transferring from extensive to intensive form, enhance utilization in energy and resource, promote to consciousness of environment protections, implement serious environmental regulations and laws, and improve quality of Chinese economic development and social progress. The development of environmental industry has factor of knowledge-intensive and high-technology in the knowledge economic society. Technological and scientific exploration, creation, development and application of environmental protection can directly and indirectly promote to the development of environmental industry. Environmental industry can promote to establish a great social environment for knowledge economic development. Therefore, it should synchronize to develop the environmental industry and knowledge economy which are harmonious and close.
Recycling economy which can be called as circular economy is a new concept that cannot disjoin with environmental industry. Circular economy means that transferring from material single-way of traditional economy to material flow of new economic cycles, and transfer from types of resource-products-pollution discharges to types of renewable resources. It is advanced in 16th of Chinese National Congress, which “the development of Chinese circular economy is an effective ways to resolves conflicts between economic development and environment development & protection, benefit to implement sustainable development strategy, and achieve a crucial approach for a new type of industrialization”. Liu (2009) and Zhang (2003) point out that a crucial principle of circular economy is that decrease, recycling and innocuity of wastes; and resource and waste recycled is the core of circular economy. Waste recycling industry in circular and recycling economy is an effective means to solve piles of garbage and urban sewage. Therefore, the development of circular economy essentially reduces and solves conflicts between development of economy and development & protection of environment in a long time. According to the World Health Organization (2009), circular and recycling economy can help developed nations to save total value of 25 billion US dollars in 2008 and annual growth rate of 15%-20%.
Circular and recycling economy plays an important role in sustainable development. For instance, in order to paper recycled, one tons of waste paper can produce 0.85 ton of great recycled paper, save more than 100 tons of water, 1.3 tons of coals, 3.1 cubic meters of woods, more than 600 degree of electricity, and to some extent great reduce water pollution. Therefore, environment industry and circular economy can simultaneously develop. In addition, the consciousness of environmental protection can cultivate a great atmosphere for scientific R&D and development of circular economy; and circular economy makes a great contribution to environmental industry. Therefore, harmonious syncretizing both social-economic development and environmental development can promote economic development, social progress and environment protection; as well as greatly promote to sustainable development.
2.6 Market failure
The concept of market failure can be considered as a case which a market fails to meet preferences or desirable standards. Bator (1958) first studies market failure in the article of Anatomy of Market Failure. He (1958) proposed that typically, market failure refers to failing in less or more idealized systems of price-market organizations and institutions to support and maintain ‘desirable’ activities or to cover ‘undesirable’ activities in the allocation theory. He also points out that “the desirability of activities in turn is assessed related to solution values of some implied and explicit maximum-welfare problems.” Therefore, market failure can be considered as a market fail to maximize satisfaction of preferences. According to Hausman (2008), there is a most common definition of market failure and market failure can be considered as “a market allocates services and products which are not efficient”. Therefore, market efficiency can be considered as optimality and preference satisfaction of Pareto. On the other hand, inefficiency can be considered as a factor of market failure. According to Hausman (2008), market failure can be considered as a scenario and situation that individual pursuit to self-interest which results in bad outcomes for society as a whole.
The concept of market failure was initially appeared in economic field to research reasons that government expenditures should be increased. Dahlman (1979 cited in McCurdy and Zerbe in 2005) state that ‘a normative judgment regarding government role and market’ capability to build mutually beneficial exchanges’. McCurdy and Zerbe (2005) point out that market failure can be considered to happen when a market fails to manufacture public products, produce imbalanced income distributions, produce natural monopolies, inadvertently or insufficiently produces externalities, increase of poverty, environment problems. In addition, market failure may result from restrict to competition like oligopoly and monopoly, restriction of information and asymmetrical information, transaction cost, fraud and force, ambiguous or undefined property rights, interdependencies of preferences, and faulty contracts (Hausman, 2008).
Market failure is a significant reason that not obtains sustainable development. Problem are increasing arose with degradation of social and natural capitals, and environment pollutions and deterioration. Winn and Cohen (2007) propose three ways of market failure. Firstly, resource and natural capitals are usually undervalued by society which not fully aware of rest resources and energy, continuously environmental deterioration and greatly energy consumption. Secondly, with the deterioration of social and/or natural capitals’ advantages and merits, their benefit can often be privatized with cost are usually externalized. Thirdly, there is information asymmetry.
2.7 Sustainable development
The concept of sustainable development was initially provided to the report of World Commission on Environment and Development in 1987 and was popular in the report of Brustland Commission ‘our common future: from one Earth to one World. According to Smith et al. (1998), it is widely recognized this definition of sustainable development by Brustland Commission, which is defined as ‘meet the needs of the present without compromising the ability and resources of further generations to satisfy current needs.’ This Brustland Commission pays significant attention to requirements of newly concept of global development: recognize the fact about interconnected between environmental and social problems, understand environment pressures are not limited to particular geographic boundaries, recognize environment disaster happen in one regions which will finally negatively human well-being in the worldwide; recognize that sustainable development can help to protect our planet and benefit to further human development.
Therefore, it can be considered that sustainable development to some extent is a way of using resources that purposes to satisfy human needs while protecting environment so that these human needs can be satisfied not only in today’s generations but also for further generations. It can divide sustainable development into three aspects which are
(1) economic sustainability,
(2) environmental sustainability and
(3) sociopolitical sustainability.
The United Nation 2005 World regards to “mutually and inter-dependent reinforcing pillars of sustainable development” as development of economy, environment protection and ecologic balance, and development of society. Brown (1991) proposed that sustainable development have four dimensions, involving
(1) ecological sustainability indicates it can not exhaust non-renewable and other natural resource in short term,
(2) economic sustainability indicates that amelioration do not rely on continuous resource infusion which can not be remained;
(3) cultural sustainability indicates changes have to be consistent with expectation, core value and custom of society;
(4) political sustainability indicate that changes have to be consistent with current or emerging power distribution in society (Brown, 1991).
According to Brown (1991), effective way to support sustainable development which has to optimize resource’s use which is locally available, minimize relying on resource which have to be brought in from outside; protect resource which are demanded for amelioration over the long term; and not find amelioration for which continuing infusions of current resource or new resource are required. Many researches propose it should take policy and cultural into sustainable development (ESCAP, 1992b, Cernea 1987, Korten, 1990, Brown, 1991; and Estes, 1993). Based on four dimensions of sustainable development, the Table1 presents instances of sustainable or non-sustainable development.
Environmental 3 Protecting and developing bio-diversity.
4 Relying on energies from renewable ecological-resource.
5 Sharing and developing suitable information and technology which can reflect local demands, ecological demands and natural resource.
6 Steady worldwide population 7 Agriculture relying on resource and technologies. which are not local available
8 Technology that use more resource and energy than they produce.
9 Emphasis on short-term economic development which will exhaust non-renewable natural resource and cause serious environment pollution.
Economic 10. Establishing a global banking system that produce a common currency, remain steady of exchange rate and price, remain and equalize worldwide deficits and surpluses (UNDP, 1992).
11. Improve worldwide tax grounded on consumption and wealth pattern.
12. Fix prices of products and service regarding to environmental and human investment in process of production. 13. The current accumulation of 80% of total worldwide incomes in the 20% of richest population.
14. Existence of wide-spread poverty, particular in less-developed and developing nations.
15. Current international systems which more benefit to rich nations but disadvantage to poor nations.
Political 16. Crucially strengthen non-government department, particular in any level of grass-root organization and collectivity of persons at any local level of political organizations.
17. Terrorism, wars, repression of historically poor countries and poor people.
18. Centralization of rights and powers governed by part elites
19. The existence of corruption in governments.
Cultural 20. The emergence of expectation, core value and social customs that cultivate moderation and tolerances in accepting and respecting differences of culture.
21. Eliminating and minimizing gender role that allow males and females to share equally in decisions-making.
22. Persistent existence of historically repression of disadvantaged people such as females, minorities of culture, and religious people.
23. Want to create ‘homogenize’ culture to minimize and eliminate difference of culture.
CES (2009) states that environment sustainability is the capability to remain qualities, and sustain human lives; the abilities which natural environment has to keep and develop living conditions for human-being and other species in the Earth like fresh air, clear water and comfortable climate; produce renewable resource like timber, tree, fish, water and solar energy; sustain social functions even if depletion of non-renewable resource such as crude oil; sustain quality of life for all people with environment of comfort, livability and beauty. Sociopolitical sustainability refers to find ways to durable social development and enrichment through healthy and vibrant socio-political environment.
Sustainable development can be also defined in following three aspects. In terms of technical aspect, it can define as a development path along that try to achieve the maximization of human well-being for today’s generations but it at the same time should not reduce future generations’ human well-being. In order to achieve these development paths, it requests to eliminate negative externalities which are responsibility to environment pollution and degradation and depletion of natural resource; it also requests to protect public products which are crucial and essential for development of economy involving great-functional ecosystems, a health environment and a cohesive and integrated society (OECD, 2001). In terms of political aspect, it also should concern sustainable development regarding to what human well-being suffer from and entail and how to balance the goals of social development, economic efficiency and environmental protection and environment ecosystem. Sustainable development also pays attentions to the consequences and influence of today’s human activities for the future generations, as well as the worldwide cooperation among nations to implement feasible and efficient solutions. These factors can help nations to make important goals for sustainable development regarding to regional and domestic policies, and international relationships among nations in the twenty-first century (OECD, 2001). In terms of business, sustainable development can be defined that using business strategies and business activities which satisfy the demands of corporation and corporate stakeholders today, and enterprises should also pay attention to sustain, protect and improve natural and human resource which is required in the future. This sustainable development in business aspect is defined by the World Commission on Environment and Development. It requires that enterprises and companies should not only satisfy companies’ demands and its stakeholders, but also should pay significant attention to natural and human resource which economic activities have not to destroy these human and natural resource (Deloitt &Touche, 1992).
Rostow (1998) propose new policies and goals for the 21st century and state that: it probably be a period that maximizing pressure on environment and resource, as well as interval of maximizing readjustment in the potential of economy, political and population impacts on international community between nowadays and mid-21st century. If the Earth can carry a doubling population in the next 50 years without a disaster, it will has two nations with approximately 1.5 billion population of each, which will be essential industrialized nations of China and India. Each nation will be estimated to reach peak population with five-time, which will aggravate agricultural and industrial burden. It also probably happens in other major Asian countries and Latin American. Therefore, the period from present to mid-21st century will not only maximize pressures on resource but also there will be new industrial powers in the world.
Chapter three: research methodology
3.1 Research objective
In this century, environment issues, market failure and sustainable development have been significantly concerned by many countries and various organizations. Chinese as one of the largest developing nations in the world with more than 1.3 billion populations confronts too many difficulties and problems involving shortage of water and farmland resource, fragile foundation of agriculture, and serious desertification phenomenon in drought areas, strong stresses on eco-systems and poverty problems in some Chinese areas. These problems with growth of Chinese economy to some extent causes some criticism both in positive and negative. Therefore, the research objective is “addressing external response of environment issue and market failure behind the growth of Chinese economy and the impacts on Chinese sustainable development”. Specifically, research objectives are following these aspects: (1) it studies external criticize Chinese environment issues and market issues; (2) it studies the relationships between rapid growth of Chinese economy and two aspects with environment issues and market failure;(3) it discusses the achievement of sustainable development to response to external criticism; (4) discuss influences of sustainable development in China; (5) it discusses challenges of sustainable development in environment issues.
3.2 Research method
Saunders et al (2003) propose that research methods can be divided into inductive and deductive research methods. Inductive research approach generally transfers from a particular real-life situations and phenomenon to deduce general theories and phenomenon, but deductive research method generally transfers from general theories and phenomenon to a specific situations. Neuman (1997) points out that this research can be recognized as a deductive that scholars firstly have vague concepts and ideas, and then refine these concepts and ideas, and develop empirical literature and research, and study preliminary relationships based on existing literature and theories.
In this study, it uses a deductive research method with logically connecting ideas and concepts from theories to specific phenomenon and situations. This research firstly studies theories about environment issues, market failure and sustainable development and then connects these theories to a specific case of China. Saunders et al (2003) also state that deductive research permits to collect much data in a great-economic research method, and obtain useful data from various data collection such as interviews, survey and questionnaires.
3.3 Research strategy: qualitative and quantitative research method
Yin (2003) and Saunders et al (2003) also point out that research strategies can be divided into quantitative and quantitative research method. Saunder et al (2003) points out qualitative research approach more focuses on ‘word’ than quantitative research approach in collecting and obtaining data and information; while quantitative research method usually more focuses on ‘statistical analysis’ to data collection and data analysis. Boris et al (2005) also point out that qualitative research strategy is prone to think that fact/reality is holistic and needs to whole analysis; while quantitative research strategy can be break down facts and realities which can be analyzed part by part. In addition, Yanchar (2006) also point out that qualitative research strategy “must be match with research objectives at hands and these matches of research objectives and methods have to accompany by sound rational and critical reflection”.
Furthermore, Saunders et al (2003) proposed that ‘if your concern with researching and exploring life histories and/or behaviors of human-being, then qualitative research methods may be favored”. Therefore, qualitative research strategy is more useful and suitable in studying human-being psychologies and behaviors; and quantitative research strategy is more suitable to make numerical analysis. In this study, it adopts both qualitative and quantitative research strategies. Firstly, this research studies Chinese population’ behaviors on environment issues and efforts and influences of Chinese sustainable development. Secondly, this research also adopts quantitative research strategies to make a numerical analysis through questionnaire data collection and make statistical analysis, for instance, what kind of environment is most serious in China and do your think Chinese environment protection is efficient.
3.4 Primary data collection
In this research, it also adopts primary data collection. According to Saunders et al, primary data collection has advantages of more focused, closely relevant, reliable, accurate and mainly target on external responses of environment issue and market failure with rapid Chinese economic development on sustainable development. It mainly uses two types of primary data collection which are interviews and questionnaire.
Semi-structured interview can be considered as important form of qualitative research analysis and is more flexible (Saunders et al, 2003). Semi-structured interview can not only adopt in qualitative research analysis to analyze and study ‘why’, ‘what’ and ‘how’ questions, but also can obtain in-depth data and information. Which can provide researcher chances to require interviewees’ explaining. In addition, Interview question can be firstly prepared and designed, and then make some changes based on specific situations and different type of respondents.
In this research, it adopts face-to-face and telephone interview. Hawkins and Tull (1994) point out that face-to-face interview can help to establish great relationships between researchers and respondents, and can investigate some sensitive issues from interviewee, but it has limitation of geographic, costly and need to take much time. In addition, telephone interview can eliminate geographic distance, save time and funds. Therefore, it chooses face-to-face and telephone interview.
In this research, it mainly interviews 4 people who are students Jolin and liz (study in School of Earth and Environment in University of Leeds), Ellis (work in School of Earth and Environment in University of Leeds, and the programme manager of MSc in sustainability of environmental consultancy and project management), and Xin Zhang and Bo Chen (work in Shanghai Environment Protection Bureau). In this interview, it mainly asks environment issues and market failure with Chinese rapid economic development and sustainable development. Interviewing questions is attached in Appendix A.
Yin (2003) states that questionnaire can be considered as “a form that respondents fill out used to get demographic information and data that relevant to research questions and research objective”. In this dissertation, it mainly adopts Email questionnaire which has advantages of convenient and fast to collect data, save time and resource, relative cheap and can get a large amount data to make statistical analysis.
In this dissertation, it first prepares and designs questionnaire question regarding to Chinese environment problems and market failure with rapid economic development on sustainable development. Owing to help of author friends, it handed out 45 copies but finally receive 32 valid copies. The questions is attached in Appendix B. Questionnaire questions designed single-choice and multiple-choice, and include five points of Likert Scales from 1 to 5, that ‘1’ means strongly agree, ‘2’ means agree, ‘3’ means neutral, ‘4’ means disagree and ‘5’ means strongly disagree.
3.5 Secondary data collection
Secondary data collection is also adopted in this research. Many scholars tend to like secondary data collection because these data have been collected and analyzed by others. Saunders et al (2003) point out that secondary data collection can be defined as data have been collected and analyzed for other research objectives and questions by other researchers and scholars. According to Birks and Malhotra (2006), secondary data collection can ‘be defined for some other research proposes other than problems at hand’. Secondary data collection has many merits, involving quick and easier collecting data, save time and money which can convenient collect data from academic books and journals, the Internet, published data from governments and corporations, obtain authentic, reliable, high-quality data from governments and corporations, multi-purpose foundations to scholars, and can obtain unforeseen discoveries. Therefore, researchers and scholars can reutilize and reanalyze existing data for their research questions and reutilize these data to address their research objectives.
In this paper, there are several sources to collect secondary data through academic books and journals, the Internet, public data and documents by governments, organizations and corporations. Firstly, it gathers data from academic books and journals in database of our universities, which data to some extent is authentic and reliable. These collected data is mainly adopted and analyzed in literature review that comprises theoretical foundation in this research. Literature in this research involves these aspects which are environment issues and environment protection management, market failure and sustainable development. Secondly, it collects data from published data by governments, corporations and organizations. These published data to some extent can be considered as more authentic and authoritative. It is mainly collected from WTO, Chinese Statistic Bureau, Chinese Agricultural Bureau, Chinese Electrical Bureau and Ministry of Water resources P.R. China. Thirdly, it collects data from the Internet and electrical database. For instance, Blackwell website, Sciencedirect and Jstor website are be considered as more efficient and more available websites for scholars to collect data related to their research objectives. Many articles and data in these websites are collected from famous and reliable journals like Strategic Journal, Harvard Business Review, which can offer valid and authentic data.
3.6 Data analysis
Data analysis is very important in the process of collecting data. Though this research mainly collect data from academic books, academic journals, public documents and other official data, it can not indicate all data collected in this research are accurate and reliable. Saunders et al (2003) define data analysis as “a research instrument adopted to decide the presence of certain concepts and/or words within texts. It can analyze author, meanings and relationships between words and texts; and then find useful information from these data. According to Saunders et al (2003), data analysis involves following steps such as experiment, data reduction, data display, and conclusion drawing/verification. Experiment mainly produces raw data and information which can make quick data analysis and data reduction during the step of experiment. Data reduction indicates process of selecting, emphasizing, simplifying, abstracting and transforming data, in order to organize data so that it can draw and verify final conclusion. It also converts raw data to error analysis and statistical analysis to ensure collected data is valid. Data display means that take reduced data and display in a compressed and organized way so that it can be easier to draw and verify conclusion. Finally, it draws and verifies conclusion.
In this research, it analyzes collected data in line with data analysis, which data is mainly colleted in the following ways. Firstly, it obtains from official websites and public data such as Chinese Statistic Bureau, WTO and Chinese Environment Protection which are more reliable and accurate. Secondly, I try to find data from library and database of my university or other universities, and try to find academic data which has author, year, page, journal name, publication, volumes and issues.
There are many limitations in this research. Firstly, majority collected data is high-quality and valid, but it may exist some low-quality and unreliable. Secondly, some collected data is usefulness which may not be suitable in these researches. Thirdly, owing to time limitation, research may not comprehensive. Fourthly, collected data of primary data such interview exists some prejudice and subjective. In addition, this study pays significant attention to translation trouble and language barriers in international research. Some interviews need to conduct in China; so that it can not avoid language barriers. Fifthly, collected data from interviews and questionnaire just responsive part of people, and these interviewees may have prejudice for China.
This chapter introduces research method and research strategies which were adopted to gather data. This research mainly adopts primary and secondary data collection. Moreover, this chapter also introduced data analysis, and restriction of this research. These collected data will be utilized and analyzed in following chapters.
Chapter four: finding and analysis
4.1 data from primary data collection
In recent years, with rapid Chinese economic development and social program, China has attracted increasingly significant attentions in the world. With rapid growth rate of economy, environmental issue and market failure is increasing obvious which negative influences Chinese sustainable development. According to Wang et al (2009), Chinese economic development is all along accompanied with the extensive growth trend of traditional industrialization which can be featured by ‘high consumption, high pollutants discharge, and serious environment pollution, great market failure and low efficiency’. Currently, although Chinese economy develops dramatically with great social progress, a significant percent of people express their negative criticisms on current environment pollution and market failure of China.
As shown in figure 1, 25 respondents (78.13%) believe China has serous environment pollution and market failure. 72% of respondents believe that increasing serious environmental pollution and market failure are greatly associated with industrialization and continuously economic development as shown in figure 2. As analyzing the Figure 1 and Figure 2, China has traditional relationship between economic development and environment pollution and market failure that with the fast economic development and industrialization, it makes a negative influence on environment which causes serious environment pollution and degradation, and market failure. It is not beneficial to Chinese sustainable development. Jolin (2009, interview) said that ‘In recent year, I paid attentions on Chinese economic issues, because my major is the environmental sustainable development. China is a great case to study. I think Chinese environment pollution is very serious and obvious, which is closely associated with industrialization process. To some extent, it is similar trend to industrial revolution in Europe since 1960. These environmental pollutions involve water and air pollution, pollution of toxic chemical, damage of garbage and hazardous waste, desertification, and shortage of energy and resource. In addition, China has huge population that occupied about one sixth worldwide populations, which can result to shortage of rice and resources, and easily to increase pressure on environment…It not benefit to Chinese sustainable development.’ In addition, Ellis (2009, interview) pointed out that ‘China can be considered as worst in environment pollution, which mainly represent in air pollution, water pollution, desertification, industrial waste and so on. It is associated with development of Chinese economy and industrialization. In China, private companies and SMEs (small-sized and middle-sized enterprises) make huge contribution to Chinese economy. However, these private companies and SMEs to some extent pursue to corporate benefits and interest but neglecting social interests. For example, many companies directly excrete industrial waste water and waste gas to rivers and lakes which seriously hurt to the public health and development.’ ChenBo (2009, interview) said that “although China has serious environment pollution, the Chinese government significantly and amain reinforce environment managerial power and environmental monitoring & supervision mechanism in recent 2 decades. In order to sustainable development and environmental protection accompanied with rapid Chinese economy, the Chinese government put forward to ‘establishing a harmonious society’ and ‘scientific concept of development’”.
4.2 Outlook of harmonization between economic development and environmental development & protection in China
In order to fully implement the spirit of ‘Three represents and concept of scientific development’ by Communist Party of China, State Council of China passed a resolution and overture of ‘the national economic and social development with 11-year plan outline’, which emphasized on importance of circular resource and environmental protection in Chinese economic development and social progress (Reference); and hope to achieve ‘adhere to take economic development and construction as the core, as well as achieve double-win both in economic development and environmental development & protection. Xia (2006) and Zhu (1995) propose that with fast development of economic globalization, Chinese governments is essential to set up and implement principles to promote to harmonized and simultaneous economic development and environment protection.
Since the accession of WTO in 2001, non-tariff trade barriers promote more Chinese companies to enter to international markets, but simultaneously green trade barrier constraint some Chinese products to enter into international market. Liu (2009) states structural problem is an obvious contradiction in the development of economy so that China eases stress on environment and resources through adjustment of industrial structure. Therefore, the Chinese government pursuits to ‘one-control and double-standards’ which means that control environment pollution and contamination emission, and achieve emission standards of urban environmental pollution and industrial pollution. Currently, some Chinese enterprises believe that control pollution and costs of environmental protection will decrease their economic benefits and efficiency. This opinion is fallacies which lacks sustainable development viewpoint by analyzing relationships between economic and environmental development. Many intelligent entrepreneurs believe that great environment is also great productivity; and think that controls of environmental and industrial pollution can not only ease stress on China, but also can create a great corporate image and create continuously economic efficiency and benefits to companies (Liu, 2009). Therefore, decrease industrial and environmental pollution can promote to rapid social-economic development, and also offer an effective and harmonious environment for developing high-quality, high-technology and large-scale industries.
After accession of WTO in 2001, Chinese governments should provide priorities to environmental protection, and prevent to environmental pollution and degradation, which not only essentially promote development in economy and trades, but also should safeguard national environmental and natural benefits. With accessing into WTO, the Chinese government, corporations and organizations should understand constraints between economy and environment. According to Ministry of Environment protection of the People’ republic of China (2009), if China wants to catch up the paces of economic globalization, it has to ensure harmonization between economic development and environment development & protection.
It is a national celebration of 2008 Beijing Olympic Games and International the Paralympics Games, which have brought great economic benefits and efficiency particular in tourism industry and tertiary industry. China can acquire great social and economic benefits if China can take full advantages of this great opportunity to efficiently utilize and develop resource; but it can negative impacts on economic development and environmental protection if China is not efficiently and reasonable to utilize and develop resource. A county’ environment both in human and natural environment can reflect national civilization and quality of people; and a great social environment can attract more investments, funds, high-technology, talents and equipments which can promote to economic development. Hence, China should not just pursuit to short-term economic efficiency and benefits at the cost of environment, but should effectively protect the natural environment and history culture in accordance with scientific systems and principles of significant construction and reform in the long-term, and should build harmonious unification and relationship between economic prosperity and environment protection.
4.3 Chinese current environmental situation and environmental pollutions
China as a developing socialist is in the process of modernization construction which faces more severe problems than other countries in population, resource and environmental situation. These problems of heavy population pressure, insufficient per capital resource and severe environmental pollution and deterioration seriously influences on macro decision-marking of economic development, affect people’s living standards. Therefore, these problems become a primary problem of Chinese socialist construction. On the March 5, 2002, Chinese Prime Minister Zhu Rongji in the government working report said with a heavy tone that intensity of Chinese ecological environment situation is quite serious. With the rapid growth of population and fast socio-economic development, environment issues are influencing on Chinese socialist modernization construction and people’s living life.
According to Ministry of Environmental Protection of the Peoples’ Republic of China (2009), Chinese economic losses in environmental pollution reached 5.8% GDP in 2007 and annual losses caused by environmental pollutions is up to more than 283 billion Yuan; of which more than 50 billion Yuan annual economic losses caused by water pollution, and more than 20 billion Yuan annual economic losses caused by air pollution. Owing to urban coal-burning, exhaust gas from factories and various vehicles, and waster deposition in landfills, diffuse toxic particles such as sulfur dioxide and carbon monoxide are suspended in city and result in serous air pollution. Air pollution led to 0.02% of lung cancer mortality in China and more than 30% of the acid rain coverage in 2007 (Ministry of Environmental Protection of the Peoples’ Republic of China, 2009). In addition, economic losses in eco-environmental damage and natural disasters reached more than 200 billion Yuan in 2007, and forest coverage rate decreased from 30% to 14% between 1949 and 2007, and soil erosion area reached more than 1.55 million square kilometers with accounting for 16% Chinese land area, as well as grass degradation is also serious. In addition, urban construction with annual occupying more than1.5 million hectares of lands and natural disasters destroy natural ecological balance and cause economic losses with more than 20 billion Yuan in 2007. Furthermore, solid waste emission and noise pollution also caused more than 13 billion Yuan economic loss.
In China, ambient air quality has improved such as decreasing concentration of sulfur dioxide in urban areas and other particular control areas (with covering more than 38% population), and reducing emission of sulfur dioxide, carbon dioxide and nitrogen dioxide with the rapid of Chinese economic development. According to Ministry of Environmental Protection of the People’s Republic of China (2009), Chinese have greatly achieved their overall goals of emission decrease of sulfur dioxide, dust and soot in the 9th five-year-plan between 1996 and 2000, and emissions of stationary sources significantly reduced and have achieved great outcomes in the 10th five-year-plan between 2001 and 2005 that emission of soot and industrial dust respectively reduced 11% and 21%. In addition, Chinese regulatory and legislative laws and regulations were updated with tightening the emission limitation, particular control areas’ designation and policies of total emission controls, and treble the rate of emission charges. With establishing networks of air quality monitoring in national and provincial levels, and reinforcing energy institutions and policies and updated energy laws, energy sources have significantly changed with decreasing emissions from energy sources. For example, the use of coal in China was decreased by nearly 40% from 70% to 31% between 1990 and 2004. In addition, in order to reduce emission from motor vehicles and diversified energy sources, the Chinese government decided to adopt fuel-efficiency standards in 2004 for light-responsible passenger vehicles, adopt European standards for emissions from vehicles, and also positively reform the development of bus mechanisms in many developed Chinese cities.
Although China makes some positive efforts in air pollution, some cities are also serious in air quality and air pollution compared to other countries. According to Chinese Statistic Bureau (2009), more than 60% of cities have satisfied the second grade of standards in ambient air quality in 2005 but concentration of sulfur dioxide started to increase again in 2002 after stably reducing in the periods of early 1990s. Sulfur dioxide emissions from stationary sources in national level were enhanced by 12% between 2000 and 2004 which has not reached five-year-plans of a decline goal of 10%. In the particular control areas of air pollution, sulfur dioxide emission decreased only 2% which has not achieved a decrease of 20% goal between 2000 and 2004. In addition, urban proportion with suffering from high acid rain of below 4.5 PH increased 10% since 2004 although there was a decrease of 2% in 2000. To some extent, the goal of present emission decrease is not achieved to satisfy standards of ambient air quality, involving toxic air pollution and VOCs. According to Ministry of Environmental Protection of the Peoples’ Republic of China (2009), it has not great implemented air pollution regulations and standards and Chinese energy intensity per unit of GDP was higher approximately 21% than in average of OECD in 2001 although there was a decrease in the period of 1996-2000. Therefore, it is a great challenge of decreasing energy intensity by one fifth between 2006 and 2010 even if it has obtained potential multiple advantages such as decrease pollutions of traditional air, decrease emission of green house gas, rise energy safety, and enhance economic efficiency. In addition, vehicle transport has become the largest source of air pollution in urban areas, with increasing using motor vehicle and insufficient emission management from these motor vehicles.
Nowadays, there are comprehensive legal systems in water pollution and water source management in China with clearly systems for controlling abstraction and establishing water quality goals. According to Ministry of Water resources P.R. China (2009), the Chinese Water Law was established in 2002 regarding to integration of river basin management, adoption of market systems in water management, participation of Chinese populations, in order to make effective and significant reforms of water industry. Currently, there are significant water reforms in water supply and treatment of waste water such as firms has established specific waster water treatment in many areas, and basic institutions and some organizations have established river basic management. In addition, the Chinese government has implemented a series of economic instruments such as charge for water service, charge for industrial water pollution and charge for waste water. In the period of 9th and 10th five-year-plan between 1996 and 2005, it has decreased total pressures discharges to rivers and lakes which indicated the reduction of water pollution discharge with Chinese economic development.
How, it should also pay significant attention to water pollution and other water problems. Firstly, there are serious pollution such as lakes, rivers and coastal water which mainly result from discharge of agriculture, industry and domestic households. Water pollution and aquatic ecosystem degradation make serious threats to public health and human survival. Secondly, there is low water resource per capita in China which is just 25% compared to worldwide average; and there are unevenly distribution between Chinese western areas and northern areas. Chinese Statistic Bureau (2009) points out that more than 400 cities experience water shortages among more than 600 large Chinese cities. In addition, with water pollutions and water shortage, demands of groundwater greatly exceed water replenishment rate in many Chinese urban and rural areas which is difficult to keep a high level of water consumption in agriculture and urban areas.
China greatly decreased municipal generations and to some extent reduced industrial wasters from economic development. Regarding to industrial solid waste, many Chinese countries have achieve and surpassed goals in the 9th and 10th five-year-plan. These goals regard to recycling, recovery, waste disposal and reuse of waste material. Currently, China take significant action to set up and implement legal mechanisms of modern waste management with updating Chinese waste law of 1995 in 2004 and implementing a Chinese cleaner production law in 2003. In addition, China also adopts various waste standards and regulations such as industrial waste, medical waste and plastic waste. In 2003, China also issued a national project of Construction Programme of Hazardous Waste and Medical Waste Disposal Facility which can help to enhance abilities to treat medical, industrial and hazardous waste. Under this national project, it obtains a great effort from medical, industrial and hazardous waste. In the 11th five-year-plan, there are concepts of 3Rs of ‘reuse, reduce and recycle’.
However, the amounts of industrial, municipal and hazardous waster are far more than greatly and safely dispose and treatment. The speed of waster disposed and treatment is slower than the speed of generating waste; and these dumped waste which more than 50% is municipal waste significantly negative influence human health and environment. According to Ministry of Environmental Protection of the People’s Republic of China (2009), it has not achieved the 10th five-year-plan of rising abilities of municipal landfills to 150kt/ day. It also points out that it has increased more than 80% of total waste. To some extent, waste management is still poor compare to Chinese water and air pollutions and Chinese government invests on waste disposal less than management of water and air pollution.
Chapter five: discussion and conclusion
5.1 Achievement of sustainability development in China in recent year
1. Stability growth of production of grain and other important agricultural products with increasing reformative framework
According to Chinese statistic Bureau (2008), total grain yield increased from 431 million tons to 502 million tons between 2003 and 2007, which largely meet domestic grain demands and consumption. In 2006, acreage of significant agricultural products such as wheat, corns, rice and soya respectively made up 88%, 63%, 98% and 53% in national amount. In 2007, the total important agriculture and fishery have a stabile production with 68 million tons of meat yield, 25 million tons of eggs, 47million tons of seafood and 35 million of daily products. In addition, there is a continuous increasing trend of overall agricultural products’ yields. Although percentage of crop farming reclined to 50.1 % in 2006 compared with 52.4% of 2002, proportion of animal farming and forestry respectively increased to 4% and 33% compare to 3.8% and 30.9% in 2002. These efforts can help to strengthen regional and national distribution of crop and agricultural production and help to obtain and position in competitive advantages. These figures can greatly indicate stable growth of grain yield and other significant products in agriculture and fishery with increasing meliorate framework.
2. Growing meliorate safety and quality of products in agricultural industry with sufficiently reinforced competitiveness
There are more than 92% of compliance rate about residue of pesticides in fruit, vegetables and other agricultural products, and more than 97% of present compliance rate about major inspection and supervision indicators about animals and seafood in over four successive years. The Chinese government has increasingly enhanced and meliorated the quality of inspection and supervision systems for agricultural goods and has built standard mechanisms for agricultural industry which are governed by national and local standards, and encouraged by corporate standards. Since now, there are over 800 national standards, over 8000 local standards and over 2200 sectoral standards for agricultural industry. Chinese agricultural goods and farming goods has enhanced quality and international competitiveness because of building of quality inspection and supervision mechanism, as well as standardized production. According to Chinese Agricultural Bureau (2009), the total value of exporting agricultural goods in China increased to more than 31 billion US dollars in 2006.
3. Fast improvement of agricultural industrialization and increasing expanding agricultural special cooperative corporations and organization
It has initially established legal mechanism for building and developing agricultural specialized cooperative organizations, and increasing enhanced the benefit-sharing systems for agriculture’s industrialization. Cross-regional industrialization’ operation plays a growing crucial role in the modern agricultural development. According to Chinese Agricultural Bureau (2009), more than 154,810 Chinese corporations and organizations participated in agriculture’s industrialization with increased by 14.2%; and approximately 91 million farming households engaged with increased by 4.2% in 2006, compared to data of 2005. Chinese Agricultural Bureau (2009) also point out that each participated farming family enhances their incomes by 1500 in average with annual growth rate of 11%. Currently, over 150 thousand farmers participate in agricultural specialized cooperatives in China which includes 38.87 million members and among which are 35.76 million farmers.
4. Fast development of non-farming industries in rural areas with steady improvement of urbanization and industrialization
Compared with data in 2002, in terms of adding value of rural areas, primary industries’ percentage decreased to 29.5% which were decreased by 1%, while secondary industry increased 55% which were increased by 2% in 2006. According to Chinese Statistic Bureau (2009), total incomes from village and township companies were 24.683 trillion Yuan and total profits reached 1.48 trillion Yuan which was respectively higher than 91% and 95% compared with 2002. It is widely recognized that agricultural processing industry can became a larruping and crucial industry for village and township companies, that large-scale village and township created total added value of 957 billion Yuan with an annual increase of 16.8%. In addition, the development of non-farming industries particularly in village and township companies can help to promote the process of urbanization and industrialization. According to Chinese Statistic Bureau (2009), village and township companies in 2006 made great contribution of 147 million employment opportunities which made up 31% of total rural employment in China. The industrialization can help to promote to process of urbanization in rural areas which has gone up from 39% to 44% between 2002 and 2006.
5. Fast increasing incomes of farmers and greatly ameliorated quality of farmers’ life
Per capita net incomes of Farmers increased from 3,591 Yuan to 4143 Yuan after allowing for price characteristic in 2006, as well as growth rate of farmers’ incomes have reached more than 6.3% in continuous four years (2003, 2004, 2005 and 2006). Per capita living expenses of rural residents were up from 1845 Yuan to 2912 Yuan between 2002 and 2006, and their consumption trend remain ascending. These figures reflect that: rural residents’ consumption is growing; developing-oriented consumptions of rural residents have greatly ameliorated with culture, education and entertainment increased to 306 Yuan and increased by 45%, medical care increased to 193 Yuan and increased by 85%, communication and transport increased to 290 Yuan and increased by 125%; rural families has greatly speeded-up to be closed to communicated equipments. Currently, a great majority of Chinese rural families are greatly closed to Televisions and radios, and there is upgrade trend of popularization rate in mobile phone, Internet and computer and telephones.
6. Continuous strengthening infrastructure of rural areas and sufficiently ameliorating rural living quality and productions
In 2006, total highways of rural areas reached to 3.04 million kilometers in 2006, which 61% of Chinese villages and 98% of towns have highways with making by cement or tarmac. According to Chinese Transportation Bureau (2009), more than 400 thousand kilometers highways were newly established and/or repaired in 2007. According to Chinese Electrical Bureau (2009), cities, towns and villages accessing to electricity made up 100%, 99.8% and 99.5% in 2007. In addition, levels of planting, mechanized tillage with technologies, harvesting were increased to 42%. Owing to integration of development program of agricultural industry, 497 million mileage of low-production lands had been changed to high-level farmlands with highly and steadily efficient productions even if influences of serious weather such as excessive rain and/or drought. Bio-gas digesters amount in rural families reached 22 million with including more than 5,000 medium-sized or large-sized engineering programs in commercial poultry and animal farm. These efforts can help to drinking water much safer. Ministry of Water resources P.R. China (2009) points out that rural residents suffering from unsafe and/or unsuitable drinking water reclined from 380 million to 251 million between 2000 and 2007.
7. Continuous decreasing poverty degrees of rural residents with speeding up social development
In China, rural residents greatly increased their life quality and reclined their poverty degrees, which poverty of population reduced from 32.1 million to 14.8 million with reducing by about 55% and low-income rural residents reduced from 62.2 million to 28.5 million with reducing by 54.2%; net income per capita of rural residents were up from 1280 Yuan to 2210 Yuan between 2000 and 2007 (Chinese Statistic Bureau, 2008). In 2007, all rural children and students participated in compulsory education; 35 million population in rural areas participated in basic expenditure of living allowances. In addition, Chinese heath care mechanisms for rural residents were distinctively meliorated; infant and maternal death rate was dramatically decreased; new cooperative medical and health care mechanisms were expanded to more than 85% in all Chinese counties and were covered to more than 730 million farmers.
8. Emphasizing on environmental protection in rural areas and greatly promoting environmental protection
Recently, Chinese national laws and regulations about environmental protection have been increasing meliorated. Many companies in villages and rural have been strict punished or been closed which have caused severe environment pollution and not observed industrial laws and regulation of environment pollution. With great environment protection and eco-friendly production practice, it can benefit to increased incomes of farmers and their life quality and condition. Environment protection management in agricultural industry and rural area has been built in the levels of nation, province, city and town through a national level of an agricultural environment inspection and supervision station with 34 in provincial level stations and over 810 civic level stations. According to CCTV (China Central Television), more than 325 counties were awarded the title of ‘National-level eco-system demonstration areas’ and more than 400 towns were awarded the title of ‘National-level of greatest environment’.
9. Improving abilities for drought-prevention and preparedness and obtaining distinctive achievements in controls of desertification
There are more than 27 million irrigation acre against drought with loss of grain yield decreasing more than 45 billion kilograms and easing temporal hardness in supply of drinking water for more than 30 million populations in rural and urban areas in 2007. It has further greater improvement in drought monitoring, early warning, professional and expert measurement and evaluation, and release of information. These measures of drought monitoring and early warning can positively benefit to great agricultural productions. In addition, national-level and provincial-level pilot areas with establishing a great water-efficiency society were respectively up to 43 and more than 100 at the end of 2007. With efforts of the Chinese government and Chinese people, controls of soil erosion and desertification have obtained great outcomes and trend about expansion of desertification has been preliminarily controlled. According to Ministry of Environment Protection of the People’s Republic of China (2009), it has decreased of total land areas under desertification, with expanding of desertification annually reduced by from more than 10,000 kilo square meters to 7,500 kilo square meters between 20 century and at present.
5.2 Approaches of Chinese sustainable development to respond to market failure and environment issues
1. Building comprehensive systems and mechanisms of environmental regulations and laws
According to Ministry of Environmental Protection of the Peoples’ Republic of China (2009), the Chinese government have successively issued and implemented a series of environmental laws, such as law on safety and quality of agricultural goods, law on animal husbandry, law on rural land’s contract, law on promoting to agricultural mechanization, laws of control and prevention of desertification and law on specialized farmer cooperatives. In addition, in order to perfect and implement environmental laws and adjust to real practices, many laws have been revised and amended and these laws are mainly on water, forest, seed, agriculture, control and prevention of water pollution, soil and water conservation, fisheries, land management and grassland management. Furthermore, a series of environmental regulations have been issued and implemented, such as regulations on the methods for land reserve management, water abstracting license, levy for water resource charges, the approaches about license management regarding to contract operating right of rural lands.
2. Designing and identifying scientific development plans
Feasible and effective medium-term and long-term development plans play a significant role in the development of agriculture and rural. Based on Chinese rural and agricultural economic development plans, the Chinese government has constituted grain yield plans and 5 years development plans which include animal production and health, feed, fishery, corns, rice and so on. With needs and requirement of Chinese development, the Chinese government has built various development plans for specialized and specific programs in the areas of enhancing varieties, involving control and prevention of animal diseases, crop productions and protection, rural and biogas ecosystem protection.
According to Chinese Statistic Bureau (2009), the Chinese government has constituted national-level plans in the period of 11th 5-year plan for establishing a water-efficiency society, rural safe drinking water programs and plans about controls and prevention of desertification. In addition, in order to more effectively protect the farmland resource, the Chinese government has revised the national-level programs about the overall land-use plans, which identify total areas of new-increase lands for non-agricultural aims, and limit farmland occupied areas for non-agricultural aims and implements reasonable and scientific lands-using arrangements for non-agricultural aims.
3. Enhancing policy systems to advantage and strengthen agricultural industry
In order to promote to effective agricultural development, Chinese government has abolished some agricultural policies which can directly advantage and strengthen agricultural industry, such as abolishing taxes on agriculture, special agricultural goods, and livestock; and direct subsidies on agricultural tools and machinery’ purchasing, grain and corn producers, variety of quality crops, suppliers and producers of agricultural production. According to Chinese Statistics Bureau (2009), farmers and agricultural producers’ decreased total financial burdens by more than 126 billion Yuan with decreased by approximately 142 Yuan per capita of farmers in 2007. In addition, there were more than total amount of 51.5 billion Yuan of above four subsidies, of which 27.61 billion Yuan used on suppliers and producers of agricultural production, 6.68 billion Yuan used on variety of quality crops, 15.2 billion Yuan used on agricultural suppliers and producers, and 2.01 billion Yuan used on purchasing agricultural tools and machinery (Chinese Statistics Bureau, 2009). In addition, a series of policies have been issued to regulate and adjust minimum purchasing price for important grains and crops; to support productions and yield on oil seeds, dairy and pig; strengthen to provide motivations to important grain-production towns and counties; and strengthen encouragement of subsidies to townships and counties with difficulties in finance. Moreover, the Chinese government and Chinese local governments set up policies to encourage the agricultural development and rural infrastructure’ development, and reinforce policies to benefit rural social-economic development.
4. Enhancing budgetary funds
According to Bank of China (2009), the Chinese central government distributed 298 billion Yuan on agricultural development, 432 billion Yuan on farmers and 340 billion Yuan on the development of rural areas, more than 11 billion Yuan on protection of biological systems between 2005 and 2007 with estimating an annual increase of more than 20% in the future. Purposing to guarantee safety and quality of agricultural goods, it has established more than 300 quality inspection centers at national and provincial-level, more than 1790 inspecting and testing institutions at provincial, civic and counties-level. In addition, According to Ministry of Water resources P.R. China (2009), the distribution of the Chinese central government increased from 6.1 billion Yuan to 6.41 billion Yuan, and the investment of local governments, rural residents and investors increased more than 5.5 billion Yuan to 6.65 billion Yuan to safe drinking water between 2006 and 2007, which can provide safe drinking water on 29 million rural residents of 2006 and 32 million rural residents of 2007.
5. Enhancing and reinforcing controls in desertification and drought
The Chinese government and local governments pay significant attentions to reinforce controls in droughts and desertification which identifies various and specific proposes and tasks, and map out specific steps to effective drought control and desertification control and prevention in following decades. According to Ministry of Environmental Protection of the Peoples’ Republic of China (2009), it has signed responsible documents about desertification between the Chinese central government and desertification-suffered provinces to guarantee goals to achieve desertification control and prevention in the period of 5-year plans. The investment mechanisms governed the Chinese central government were applied in the programs of desertification controls, involving implementing significant ecological programs like programs of sand source and Jing-Jin wind control, water and soil management and protection program in Loess Plateau, grass protection and recovering program. The Ministry of Environmental Protection of the Peoples’ Republic of China (2009) also point out that the Chinese plans of desertification control and prevention were grounded on the UN conventions of desertification controls and prevention. Currently, the Chinese network of drought surveillance and supervision was enhanced with more than 1000 moisture and soil monitoring stations; and Chinese national-level of meteorological drought types are issued grounded on surveillance and early warnings of probably drought with releasing information.
6. Improving protection of rural ecologies and farming resource
There are three significant aspects to improve protection of rural ecologies and farming resource. Firstly, it should strength a serious arable lands protection systems, and serious scrutiny of construction-using arable lands, require field reclamations and restorations and build targeted arable land responsible systems. Secondly, it should reinforce protection and management of public drinking water particularly in rural areas, controls of mining and industrial pollution, promote to integrations of using livestock waste, strength environmental protection in aquatic management, enhance eco-farming and organic-farming, positively investigate eco-payment systems.
7. Strength encouragement from education, technology and science
Firstly, it should reinforce the development of innovation mechanisms for agricultural technologies and science, and enhance agricultural research. Secondly, it should actively promote to agricultural technical skills and technologies to farming families, and establish networks for distributing technical skills and knowledge by technical advisers; and strength systems to guarantee expenditures for public well-being, and promote to agricultural education’ integration with research. Thirdly, the Chinese central government distributes more than 3.5 billion Yuan to establish more than 1480 demonstrating vocational collages and counties vocational stations to reinforce ability of vocational education in rural areas. In addition, it has identified comprehensive plans of national-level water resource, and enhanced ability of water resource management and protection, which has established about more than 30 experimental centers of water-saving farming in day lands and field observing centers, built many laboratories for tests of water, soil fertility and other soil factors, established over 600 centers for monitoring and observing droughts and soil moisture, and cultivated more than 40 comprehensive demonstration fields for desertification controls and preventions.
In conclusion, this dissertation mainly addresses external response of environment issue and market failure behind the growth of Chinese economy and the impacts on Chinese sustainable development. China is the largest developing nation in the world with more than 1.3 billion populations. With the reform and opening-up since 1978 that significant economic and social changes transferring from central-planned economic system to market-oriented economy, Chinese economy has developed dramatically and remarkably. The fast growth of Chinese economy, urbanization and industrialization has contributed high stresses on environment that greatly hurt to human survival and health and natural resource. China is facing serous challenges of environmental issues, involving shortage of water and farmland resource, fragile foundation of agriculture, and serious desertification phenomenon in drought areas, strong stresses on eco-systems and poverty problems in some Chinese areas, and severe water and air pollution. These problems of heavy population pressure, insufficient per capital resource and serious environmental pollution and deterioration seriously influences on macro decision-marking of economic development, affect people’s living standards. Therefore, these problems become a primary issue of Chinese socialist construction. With the rapid growth of population and fast socio-economic development, environment issues have influenced on Chinese socialist modernization construction and people’s living life.
Currently, there is negative relationship between rapid Chinese economic development and market failure & environmental pollution, which can be presented by following figures. As mentioned in 4.3, Ministry of Environmental Protection of the Peoples’ Republic of China (2009) points out that Chinese economic losses in environmental pollution reached 5.8% GDP in 2007 and annual losses caused by environmental pollutions were up to more than 283 billion Yuan; of which more than 50 billion Yuan annual economic losses caused by water pollution, and more than 20 billion Yuan annual economic losses caused by air pollution. Owing to urban coal-burning, exhaust gas from factories and various vehicles, and waste deposition in landfills, diffuse toxic particles such as sulfur dioxide and carbon monoxide are suspended in city and result in serous air pollution.
China has achieved sustainable development in China in recent year which is shown in following: (1) stable growth of production of grain and other important agricultural products with increasing reformative framework; (2) growing meliorate safety and quality of products in agricultural industry with sufficiently reinforced competitiveness; (3) fast improvement of agricultural industrialization and increasing expanding agricultural special cooperative corporations and organizations; (4) fast development of non-farming industries in rural areas with steady improvement of urbanization and industrialization; (5) rapid increasing incomes of farmers and greatly ameliorated quality of farmers’ life; (6) continuous strengthening infrastructure of rural areas and sufficiently ameliorating rural living quality and productions; (7) continuous decreasing poverty degrees of rural residents with speeding up social development; (8) emphasizing on environmental protection in rural areas and greatly promoting environmental protection; (9)improving abilities for drought-prevention and preparedness and obtaining distinctive achievements in controls of desertification.
In addition, there are approaches of Chinese sustainable development to respond to market failure and environment issues, which involves that (1) building a comprehensive systems and mechanisms of environmental regulations and laws; (2) designing and identifying scientific development plans; (3) enhancing policy systems to advantage and strengthen agricultural industry; (4) enhancing budgetary funds; (5) enhancing and reinforcing controls in desertification and drought; (6) improving protection of rural ecologies and farming resource; (7) strength encouragement from education, technology and science.
There are many limitations in this research. Firstly, majority collected data is high-quality and valid, but it may exist some low-quality and unreliable. Secondly, some collected data is usefulness which may not be suitable or relevant in these researches. Thirdly, owing to time limitation, research may not comprehensive. Fourthly, collected data of primary data such interview may exist some prejudice and subjective. In addition, this study paid attention to translation trouble and language barriers in international research. Some interviews need to conduct in China; so that it can not avoid language barriers. Fifthly, the entire population cannot be surveyed as it is too impractical, the sample chosen to make generalizations, which may not be representative to the whole population; collected data from interviews and questionnaire just response of a part of people and these interviewees may have prejudice for China.
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