Pollution - The Price of Economic Development

After having praised China's current economic development, I think the time has come to talk about negative aspects of the actual situation as well.

Beijing is China's largest car market and today the city is already crowded with over 2.4 million cars. Every day, about 1000 cars are licensed leading to even more crowded streets and of course even more emissions. Those numbers and the fact that most cars lack a catalytic converter have led to the city being now the most polluted in the whole world.

When measured by the Chinese "Air Pollution Index" published daily by the Chinese State Environmental Protection Administration, the value for Beijing constantly lies above 140. This is over two times as high as the normal value of 60 reached by Los Angeles, which is today the most polluted US city. A blogger regularly records those values and publishes them here.

Still much more frightening is the fact that Beijing's air pollution index on some days has already hit a value of 500, the actual maximum of the scale. A value as high as that is surely hazardous to human health - sometimes the local government advises people to stay at home and keep their windows shut.

My own experience tells me that nothing of this is exaggerated. When I first came here in August, I sometimes had difficulty breathing. Unfortunately, the human body seems to adapt to those conditions. Nevertheless, look at those pictures in order to grasp Beijng's pollution reality.

In this video you can see the view from my window on a polluted, but still quite regular day - I miss our fresh Austrian and Swiss air!




P.S.: Let me just add one little comment: When you have lived in Beijing for a while, you cannot take things like this seriously :-)

"Der China-Code" - One of the most Impressive Books I Have Read for a Long Time...

German journalist Frank Sieren has lived in China for over ten years and is today one of the most sought after German-speaking China experts. In his current book "Der China-Code" he thoroughly describes the historical pillars of China's economic development and surprises the reader with interesting facts. He particularly analyses the effect of China's recent economic rise on the German economy and investigates the business activity of German corporations in China.
In the automotive sector, Volkswagen was the first foreign carmaker to be allowed into China by the Chinese goverment in the late eighties, thus providing the company with a headstart over all other international competitors. Naturally, VW soon had a market share of over 80%, but until today it has completely lost its leading position and is now fighting to keep about 15% of the market. The other two prestigious German automotive companies, BMW and DaimlerChrysler, first downplayed the importance of the Chinese market and then realized that they were already too late to make a profitable market entry. Both companies are today struggling to sell only some hundred cars per year.

But - to me - the most surprising story is Sieren's analysis of the Chinese business activities of the German Transrapid consortium, which is led by steelmaker ThyssenKrupp and Siemens. This story differs substantially from what people in Europe are used to hear about the project:

After over 30 years of development, Siemens-CEO Heinrich von Pierer managed to sell the first Transrapid train in 2001 - it should be built as a test project between Shanghai and Shanghai International airport. Furthermore, the Chinese government was thinking publicly about building a 1300 km Transrapid train between Shanghai and Beijing.

While China was longing to get its magnetic train even at a high price (the country even offered to pay 50 m EUR more), the German consortium apparently committed a lot of serious mistakes:

First, ThyssenKrupp wanted to sell a large amount of faulty and overpriced steel to its Chinese customer, who complained about the Germans who were treating them like employees.
Second, Thyssen is also said to have delivered lots of defective rail elements, which led to a serious project delay. Only days before the first official test drive of the Chinese Prime Minister Zhou Rongji and the German chancellor Gerhard Schröder, the train kept suffering from immediate blackouts leading to sudden standstills in the middle of the track. Luckily, the test drive worked without any problems, but only two minutes after the political delegation left the observation room, the train again came to an unplanned halt.

In this project, Sieren concludes, the Transrapid project and the German economy as a whole, have lost a great portion of their credibility in China - leading to a decision by the Chinese government not to build the Beijing-Shanghai train. Iinstead, a contract with a consortium led by the Japanese Shinkansen train corporation was signed soon afterwards.

Apart from providing interesting historical and economic facts, this book tries to galvanize all those of us who still think of the European - and especially the German - economy as being superior to the Chinese. Even though this might still be true in most cases, both Europe and the US will have to be extremely innovative and hard-working in order not to be surpassed by China as the world's leading economic region.

"Der China-Code" is a must-read for everyone who cares about the future of the German and the European economy - STRONG BUY!