China’s parliament: The smog of war; The prime minister opens parliament by declaring pollution the enemy

China’s parliament: The smog of war; The prime minister opens parliament by declaring pollution the enemy

Mar 8th 2014 | BEIJING | From the print edition

THE annual session of China’s rubber-stamp parliament, the National People’s Congress, is rarely remarkable for the rhetorical flourishes of the leaders who address it. But at the opening on March 5th of this year’s nine-day meeting the prime minister, Li Keqiang, in his maiden speech, deviated at least a little from the usual stodgy fare. China, he said, must “declare war” on pollution. The blanket of smog that often shrouds much of the country, he said, was nature’s “red light”, warning about the risks of “blind development”. Growing public furore about pollution has at last goaded China’s leaders into admitting the urgency of the problem.

On February 21st the capital issued its first “orange” smog alert since it introduced a new four-tier warning system last October, with orange as its second-highest level. The warning meant schools were supposed to suspend outdoor activities. As the noxious haze lingered, microbloggers expressed outrage that a top-level “red” alert was not issued. Many accused the government of failing to deal with the smog.

Such criticism has clearly stung. Mr Li’s state-of-the-nation speech dwelt on the problem of air pollution much more than those of his predecessors. He acknowledged that smog was affecting an increasingly wide area and said authorities would fight pollution “with the same determination with which we battled poverty”.

That may be an unfortunate comparison, much of China’s success in dealing with poverty having been a by-product of the same rapid growth that has wreaked environmental havoc. But Mr Li is not aiming for another boom. He said China’s GDP would grow this year by about 7.5%, slightly slower than last year’s rate of 7.7% and considerably below the double-digit rates of the first decade of the century. He said that plans to shut down “backward” production facilities in the steel, cement and glass-manufacturing industries would be completed a year earlier than forecast.

Mr Li also said the amount of energy consumed per unit of GDP growth would be cut this year by 3.9%, after a 3.7% drop last year. He omitted to mention that coal consumption, China’s biggest source of energy and a major cause of smog, is expected to continue rising. But he did say that emissions of sulphur dioxide (which result from burning coal and contribute to smog) fell by 3.5% last year and would drop another 2% this year. Smog notwithstanding, researchers at Harvard University last year said China’s cuts in sulphur-dioxide emissions in recent years may have been “one of the most swiftly effective air-pollution policies ever implemented anywhere”.

In recent days internet users have heaped scorn on a Chinese general who said on state television that smog might protect China from attack by American laser weapons. Mr Li wisely avoided repeating the claim. But his government is not scrimping on defence. A draft budget submitted to the legislature calls for a 12.2% increase in military spending this year (up from 10.7% last year); overall government spending will rise by 9.5%. In a pointed jab at Japan, he said that China “would not allow anyone to reverse the course of history”. The war on pollution was, however, the only one he declared.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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