The cost of pollution in China
By: Sophia Yan
Wednesday, December 9, 2015
Beijing first declared a red alert smog, the highest level of air pollution; Severe pollution has caused the closure of activities again and has negative effects on businesses and the tourism sector. The World Bank estimates that the total cost of air pollution and water is equivalent to 6% of GDP in China each year. Chinese President Xi Jinping announced a five-year plan to address pollution, with the aim of reducing the country’s dependence of coal-fired power plants.
Severe pollution has caused the closure of activities in Beijing after city officials issued the most smog alert for the first time.
The red alert is scheduled to be in force on Thursday noon, For a long time, China has fought against the effects of pollution. The rapid growth helped propel the country to become the world’s second largest economy. But rapid urbanization and industrialization also meant creating many factories and polluting enterprises.
No doubt about it: the smog is charging a high cost on China and many local businesses are suffering the effects.
The World Bank estimates that the total cost of air pollution and water is equivalent to 6% of GDP in China each year. That includes the impact on health, and damage to natural resources such as crops ruined by acid rain.
Tourism is one of the first sectors to feel the affectation when Beijing and other Chinese cities will suffocate. Previous episodes of contamination have alienated people.
According to the China Tourism Academy, the number of foreign visitors to the country fell for the third consecutive year in 2014. The decline was attributed to the catastrophic air pollution.
“Amidst the stagnation of the world economy, the incoming Chinese market witnessed a poor performance (last year), and severe air pollution in Beijing and other major cities was a major threat,” said Fangting Sun Euromonitor.
President Xi Jinping announced a five-year plan to tackle pollution in September 2013, with the aim of reducing the country’s dependence towards coal-fired power plants. But progress has been slow, and pollution continues to harm the tourism industry, said Sun.
And it’s not just tourists who remain outside. Foreign companies seeking to build their businesses in China face problems in recruiting older people from abroad due to contamination problems.
Fifty-three percent of companies have difficulty filling executive positions, according to a survey published earlier this year by Bain & Company and the American Chamber of Commerce in China.
For small businesses, the strong smog can be devastating. Jia Xiaojiang, 30 years old, a food vendor on the street, said Tuesday it lost about 20% of its customers in contaminated days.
For the richest Chinese, there is often an escape route. Half of those surveyed last year by Barclays said they planned to move abroad, citing dirty air as one of the main reasons for wanting to emigrate.
Shen Lu and Hu Guanhong CNN contributed to this report.