China’s Environment: Collapse or Catalyst?

Last week, I had the privilege teaching on IESE’s Global Executive MBA Program in Shanghai and on this trip the country’s environmental challenges struck me first hand.

The Food, Air & Water Quality

Our students had visited a number of Chinese families under the supervision of my colleague, Yih Teen Lee, an expert on cross cultural understanding, and these people spoke about their concerns about the safety of food they eat. Friends who have recently moved to China and long term expatriates confessed to me their concern about the water they were drinking and even potential contamination of the soil in which crops were raised. What brought the point home was the way people talk about polution. “How is the air today?” is as common as asking if its going to rain in Barcelona. There is even an app for it!

Last Friday, the PMI index, a commonly used air pollution indicator, reached 260 in Shanghai, which is considered “Very Unhealthy”, we were told to take a taxi to CEIBS and not walk the half a mile as it would be hazardous to our health!

A friend who lives in Beijing told me that his children’s international school is putting up a dome over the sports field in order to keep up with another private school in the city which already has two. At issue is the ability of kids to go outside and play and most expats appear to have filtered air their schools, homes, cars, and offices.

 

China appears to be at the start of an unprecedented environmental crisis!

 

Electric Dreams and Opportunity

Last week, the Chinese Central Committee met for its third plenary session, a major policy review and publicly pledged to draw a red line on environmental protection. As part of its policy, China is encouraging foreign clean tech companies to come to China  and be part of the solution.

Meanwhile , on the streets of Shanghai, the ubiquitous motor scooters are increasingly electric, with low slung batteries chained to the bottom of the scooter. On the sidewalk, you must take care not to trip over the extension cords which run out the front doors of shops to plug in the bikes.

In an article for Yale’s Environmental report, Edward Grumbine, an American author and environmental researcher living in China, sees the country at a crossroads where China may have to choose between economic growth and the environment . While clearly the Chinese people are increasingly demanding environmental action, I’m not sure they will be willing to trade it for prosperity. Will China accept slowing its economy down by a couple of percentage points to become cleaner? Will that be enough?

Walking back from class despite the smog (the PMI had dropped to 160), one of my students expressed his view that China will jump into the forefront of environmental friendly technologies, clean up its cities, and show and demonstrate a new model for clean, sustainable prosperity. New technologies and business models will, in his view, fix the problem.

My question is that as other regions of the world follow China’s path to relative prosperity, will we see a new sustainable future or will many of the world’s people have to check the air quality to see if they can go outside?