China responds to explosive growth, pollution and water scarcity in latest five year plan

In an era of economic turmoil that has produced massive unemployment, accelerated industrial decline, and sowed fear and doubt across much of North America and Europe, China last week offered a much different lesson on growth and development.

The 12th Five-Year Plan comes in the midst of a massive and politically popular economic transition that is rapidly converting China’s economy from its previous focus on export-related revenue to one devoted to building domestic markets. In the latest draft of its new 12th Five-Year Plan to manage the world’s fastest growing industrial economy, China’s leadership called for restraining the runaway growth that is raising the incomes of more than 400 million people, but is also drawing China ever closer to a potentially calamitous confrontation over energy, water, and the quality of the nation’s environment.

The 12th Five-Year Plan, submitted for review on March 5 at the start of China’s annual plenary session in Beijing and adopted on March 14, sets a new limit on energy consumption in order to spur efficiency and conservation measures. But it also envisions record high levels of water use, which is expected to rise to 620 billion cubic meters (163 trillion gallons) by 2015—up from 599 billion cubic meters (158 trillion gallons) in 2010—and as much as 670 billion cubic meters (177 trillion gallons) by the end of the decade. The restraints on coal production, which supplies 70 percent of the nation’s energy and is the largest industrial consumer of fresh water, will serve to keep water use from climbing even higher.

In public statements and in interviews with Chinese media, the nation’s top leaders said the central focus of the new Five-Year Plan is to curb inflation and provide investments and guidance that improves the quality of life by ensuring the continuing development of manufacturing, transportation infrastructure, domestic production, the energy sector, research, science, health care, and education. But the leaders asserted that the 12th Five-Year Plan, the master economic blueprint that charts China’s development through 2015, also is meant to reckon with the damage that the nation’s modernization is causing to air, land, and water, a steadily diminishing resource.

From 2000 to 2009, total water reserves in China dropped 13 percent, and water scarcity is especially evident in the northern and western provinces, where China’s major coal reserves lie. By calling for limits on energy production, China’s leaders are apparently mindful of the dangerous choke point developing between the nation’s surging economy and its demand for opening new coal reserves in the dry provinces that cannot currently be tapped because of water shortages.

“The 12th Five-Year Plan period is crucial for building a moderately prosperous society in all respects and for deepening reform and opening up and speeding up the transformation of the pattern of economic development,” said Premier Wen Jiabao in a statement.

Largest and Fastest—Is Restraint Possible?
But it is not at all clear that China’s provincial and industrial leaders—never mind the hundreds of millions of workers benefiting from modernization—will be eager to comply with the goals of the new development strategy.

China now has either the fastest growing or largest markets in the world for coal, cars, steel, cement, glass, residential housing, rail construction, clean energy equipment, highway development, power plant construction, and grain production, just to name a few.During extensive reporting in December for the Choke Point: China series, Circle of Blue found a nation that grumbles about pollution, inflation, and corruption, but also is tremendously enthusiastic about modernization and the economic opportunities it has provided.

The restraints on economic growth described in the 12th Five-Year Plan come in the midst of a massive and politically popular economic transition that is rapidly converting China’s economy from its previous focus on export-related revenue to one devoted to building domestic markets.

Just to name a few, China now has either the fastest-growing or the largest-markets in the world for:
•Cars
•Steel
•Cement
•Glass
•Residential housing
•Rail construction
•Fossil fuel energy
•Highway development
•Power plant construction
•Grain production
Over the next five years, China will continue to build one of the world’s largest water transport projects, the world’s largest highway and high-speed rail networks, and the world’s largest network of hydropower dams. China also will continue to construct the world’s largest industrial manufacturing installations, or “bases,” to produce the components and plants that generate energy from coal, wind, solar, and nuclear power.

Conservation and Efficiency Stressed
The 12th Five-Year Plan calls for reducing annual economic growth to seven percent a year (down from about 10 percent in each of the last four years), restraining the growth in coal production to three percent a year (down from more than 15 percent annually since 2000), and limiting water consumption.

cont.