China Investment Research: Pollution weighs down China’s future

In a recent Guardian article, “China’s burgeoning middle class has mounted its first massive challenge to the government by staging a major environmental protest in southern China.” In China, environmental issues are generally neglected as the country focuses on its rise as an economic powerhouse. Even with growing interest in environmental reform around the world, cancer caused by pollution is the leading cause of death in 30 Chinese cities and 78 counties, says the Ministry of Health. How does this affect China’s economic future? This is no longer an issue for environmentalists. More than ever, contamination must be taken into account when conducting an investment investigation in China or an investigation of companies in China.

It is said that only 1 percent of China’s inhabitants breathe the air that the European Union (EU) considers safe. Much of China’s pollution is generated from the production of cheap products for the United States and Europe. Western countries are not entirely blameless. China subsidizes the price of goods for products like electronics using practices like allowing e-waste to be recycled and disposed of in the country. The “savings are exported to the United States and Europe, but the destruction of the environment stays in China.” These indiscretions have huge implications according to China Economic News and other leading Chinese investment research firms.

As developing countries seek to phase out the use of coal in power plants due to dangerous emissions, China has rapidly expanded its market for coal. At multiple ports, internationally, ships queue to load coal for furnaces in China, “which has evolved virtually overnight from a coal exporter to one of the world’s leading buyers,” according to the China blog. EnvironmentalNews. China accounts for half of the six billion tons of coal burned around the world each year, causing pollutants to leak into the atmosphere anyway, despite attempts by developed countries to stop them. The rush to the Chinese market has helped double the price of coal in five years, a figure not lost on China’s investment research firms.

David Graham-Caso, a spokesman for the Sierra Club, says: “This is the worst case scenario.” His “Beyond Coal” campaign has helped block 139 proposed coal plants in the United States in recent years. “We don’t want this coal burned here, but we don’t want it burned at all. This is undermining everything we’ve achieved.”

China Environmental News highlights the current “love-hate relationship that many rich countries have with coal.” “Environmental laws have made it increasingly difficult to build new coal-fired power plants, but they don’t restrict coal extraction to the same extent…because the coal trade is a lucrative business and because the labor-intensive mining industry work creates jobs. China is expected to import up to 150 million tonnes this year to continue the lucrative export trade industry and needs to do so because much of its own coal is low-grade. Still, China is perceived as the biggest polluter, which could have an effect on imports to countries seeking to enforce regulations on worker safety and emissions standards, due to concerns about the global implications of China’s environmental practices. In addition, some internal financial losses could occur due to the response of citizens to China’s environmental practices.