China’s Economic Growth Gets Hit As It Declares War Against Smog


Over the past four decades, China rose to its prominence as a major industrial power, consuming large amounts of raw materials and energy. This change had decreased the rate of unemployment in the country, however, it also brought a severe consequence — air pollution.

In recent years, China’s air pollution has shown its critical impact to the people. According to a study performed by the U.S. based Health Effects Institute, more than 1.1 million people were killed by it.

Now, China’s focus is shifted more towards the quality of life instead of economic growth. Wei Yao, an economist at Societe Generale, states that “Chinese people are very concerned about pollution…What’s most important to the party is social stability.” However, the problem is that as China is increasing its efforts in lessening pollution, its economy is being directly hit.

In recent years, China’s economic growth dropped from above 10% in 2010 to below 7%. The economist Julian Evans-Pritchard predicts that there will be a loss of about $56 billion (0.5% of their GDP), as the government intensifies its war on smog.

China has put inspection teams in its industrial cities such as Beijing, keeping strict regulations for companies with their machineries. Requirement in the change of machineries into ones that are much cleaner affects the input costs to increase, thus, decreasing the productivity. Due to this, about 180,000 companies are expected to be directly affected.

Analysts agree that China’s strong economy will be able to hold these declines for some time, however, they clearly state that it is questionable whether the authorities will be willing to continue these measures as China’s economy continues experiencing a dip in its growth.

Source: CNN Article

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