When Chinese Premier Zhu Rongji meets President Bill Clinton and Vice President Al Gore in Washington in April, the political climate is unlikely to be auspicious. The United States and China have reached a virtual stalemate on each of their traditional agenda items. Negotiations over China's entry into the World Trade Organization have stalled; China's continued drive for reunification with Taiwan offers little potential for fruitful dialogue; and human rights remains an elusive area for compromise. Yet the Sino-American relationship may well define global prosperity and military security in the 21st century. Allowing it to deteriorate risks a future punctuated by frequent military and economic conflicts and global instability. Both sides are eager to sustain the illusion of progress produced by the recent presidential summits. Hence, a centerpiece of the talks will likely be a subject viewed by both as uncontroversial-environmental cooperation.

Chinese and American leaders believe that the environment is a low priority issue with plenty of common ground. This is a big mistake. The environment is as complex as other key diplomatic issues, featuring differing interests and priorities, weak Chinese institutions, Chinese defiance of international agreements, and conflict between Congress and the White House over how to achieve U.S. aims.

Moreover, environmental issues have direct and serious implications for other U.S. foreign policy objectives. A warmer Sino-American relationship is stymied by China's reluctance to seek any middle ground with the United States until it is in firm control domestically. But the environmental problems created by China's recent economic boom now threaten the country's fragile social, political, and economic infrastructure. This is a momentous issue, and the question is: Is China's economic growth sustainable? Progress in bilateral discussions rests on China's resolution of it. Fleeing to the environment as a short-term foreign policy sanctuary will be treacherous if these complications are ignored. If fully understood and thoughtfully addressed, however, China's environmental problems offer a unique opportunity for the United States to cooperate with China on a vital issue.


At first glance, the connection between China's environment and U.S. interests may appear tenuous. China is halfway around the world and unlikely to affect American air and water quality. But China's impact on the global environment should not be underestimated. China is one of the world's largest contributors to both global climate change (albeit a distant second to the United States) and ozone depletion. Its environmental practices affect Americans, from the rate of skin cancer to agricultural productivity to the frequency and scale of natural disasters. Moreover, China's need for grain has a direct and growing impact on U.S. farmers' interests. Beyond these direct effects, however, China's environmental policy influences the full range of U.S. interests in China: stability and security, human rights, democracy, and trade.

The environment is beginning to shape China's economic and political choices in important ways. The government reports large internal migrations due to scarcities, particularly of water. These migrants will complicate Beijing's efforts to manage the overpopulated coastal cities, with their millions of unemployed workers. Moreover, political conflict over land and water resources has become endemic, occasionally erupting into wide-scale violence. Over the past few years, for example, farmers from the Ningxia Autonomous Region have raided the more fertile land in Inner Mongolia for a favored plant. Thousands of police and local officials have been injured by the incursions. China's environmental practices alone may not challenge economic growth, but when combined with other trends, their consequences for social stability are magnified. A China in political and economic disarray cannot be a stabilizing force in the region or the world.

Regarding human rights, China's environment causes both concern and hope. China's environmental problems encroach on the most basic necessities of life: clean air and safe drinking water. Every year, 300,000 Chinese citizens die prematurely from air pollution-related diseases. In 1996, 50,000 people were affected by water pollution-related diseases. Sixty million people cannot get enough clean water for their daily needs. But U.S. politicians should also recognize environmental action's potential to propel political change. In the environment, perhaps more than in any other area, the Chinese government has opened the political space for dissent. Rather than devote significant financial resources to environmental protection (it spends slightly under one percent of GDP), the government has permitted the emergence of genuine nongovernmental organizations (NGOs) devoted to the environment. Helped by the media and the general public, which also discuss environmental policy with unusual openness, these NGOs criticize and expose the weaknesses of local environmental protection efforts. Grassroots environmental organizations have blossomed, many of them dominated by politically reform-minded Chinese intellectuals.

Finally, as the United States attempts to reduce its growing trade imbalance with China, it should not overlook the sale of technologies and products protecting the environment. The World Bank estimates that between 1995 and 2004, China will require about $100 billion of infrastructural investment in water conservation, treatment, and sanitation. The market for environmental goods and services, already estimated at around $4 billion, is growing rapidly. American companies, however, still lag far behind their Japanese competitors in market share.


Chinese leaders know they have a problem. They also realize that it is not just an environmental issue but an economic and political one. They have gambled that the rate of economic growth will outpace the rate of environmental degradation and resource scarcity. But their development practices have produced a costly environmental disaster; it is clear to anyone living in China that economic growth has come at the expense of the environment. The country's overwhelming reliance on coal has resulted in some of the world's worst air quality and acid rain that is damaging one-third of Chinese agricultural land. Eighty percent of wastewater and sewage is dumped untreated into rivers and lakes; in 1997, China's Environmental Protection Agency announced that water quality had deteriorated in every single major river system during the previous year. Fully 86 percent of the water in rivers flowing through China's cities is considered unsuitable for drinking or fishing.

This damage is haunting China's economic growth. Economists estimate the cost of environmental degradation and resource scarcity to be 8 to 12 percent of China's GDP. According to the World Bank, water scarcity and pollution alone annually cost China about $14 billion in lost industrial output and about $24 billion in crop loss. The health costs of air pollution will skyrocket -- reaching $98 billion by 2020.

Perhaps the most dramatic example of the costs of China's decision to trade the environment for economic growth was 1998's flooding of the Yangtze River. Official indifference and decades of poor environmental choices -- failing to protect wetlands and clear-cutting forests for timber, farmland, and industrial development -- contributed to the unrelenting floods, which killed more than 3,000 people, destroyed 5 million homes, and inundated 52 million acres of land. The economic losses are estimated at more than $20 billion.

In the race between development and the environment, Chinese leaders have bet on development. Either because it had no choice -- since the regime's legitimacy is predicated on continued rapid economic growth -- or because it has decided to see who will blink first, China has placed the burden of global environmental problems on the rest of the world. Issues such as global climate change and ozone depletion are more diffuse and long-term than China's current woes. Chinese officials have resisted devoting financial resources to problems that they could blame on industrialized countries, a philosophy best summed up as "For China to play, the world must pay."


Despite these obstacles, the silver lining of the April summit is that the environment may finally receive the attention it deserves. The danger lies in assuming that environmental discussions should provide no more than an easy photo opportunity for Gore and Zhu. The Clinton administration tends to settle for nonsubstantive policy "wins" -- in the words of one official, "find[ing] the low hanging fruit" -- rather than fighting for difficult new programs. Congress, in turn, blocks substantive initiatives by withholding funding without offering constructive alternatives. The United States cannot afford this repeat performance. China now stands on a precipice of change as steep as that in 1979, when the leadership launched its economic reform program. Since then, China has embarked on wholesale economic restructuring, including a national infrastructure program, that will not only determine its own economic and environmental future but will also affect the world's. Washington must acknowledge that changing Beijing's environmental performance will take several decades. As with other contentious issues in the Sino-American relationship, from intellectual property rights to control over weapons technology transfers, China's capacity to enforce its environmental agreements is constrained by bureaucratic and regional conflicts. The United States must act quickly if it is to influence China's choices.

First, Gore needs to incorporate businesses, foundations, and NGOs from both countries into the U.S.-China Forum on Environment and Development. The forum, which Gore inaugurated in April 1996, serves as the umbrella for cooperation between both countries' bureaucracies. The low level of funding to date -- less than $10 million in 1997 -- has limited joint ventures to small-scale workshops on topics such as natural disaster relief, water usage, and energy efficiency. Introducing new actors into the forum will provide fresh sources of funding and expertise, organize the disparate efforts of environmental organizations in China, advance U.S. trade interests, and nonthreateningly support Chinese NGOs. Forum-sponsored projects should address both U.S. priorities like global climate change and Chinese domestic needs. Ventures could involve reforestation, energy efficiency, and renewable energy.

Second, the United States urgently needs to soften China's recalcitrance on global climate change. Chinese leaders resist even minimal voluntary limits on greenhouse gas emissions for fear that more significant future commitments will slow China's economic development. Since Congress is withholding funding for domestic global warming initiatives until it sees China and other developing countries move on this issue, the White House is desperate for progress. Yet it should resist the temptation to oversell any summit agreement. China's compliance will be weak because it lacks the will and capacity to address climate change, and the United States is bound to be disappointed. Instead, Washington should proceed along the two tracks that offer the best hopes for improving Beijing's performance. The bill proposed by Senators John Chafee (R-R.I.), Joseph Lieberman (D-Conn.), and Connie Mack (R-Fla.), which grants early action credit to companies that reduce greenhouse gas emissions, should be expanded to include actions undertaken in other countries. The administration should also refrain from high-profile demonstration projects unless they are funded by those whose business interests will profit. U.S. efforts should focus on activities with a long-term payoff, such as training Chinese officials and researchers in environmental planning and enforcement, rather than on projects with limited application elsewhere in China.

Third, it is time for Congress to clear the way for lifting sanctions on U.S. assistance programs to China imposed after Tiananmen Square. The U.S.-Asia Environmental Partnership, the Trade and Development Agency, and the Overseas Private Investment Corporation could all facilitate exports of environmental goods and services to China. For U.S. firms to compete, they need financial and organizational assistance. There is no rationale for maintaining sanctions that hurt only U.S. companies and limit American advancement of its own environmental interests.


Discord and distrust are hallmarks of the Sino-American relationship. Despite recent efforts by both U.S. and Chinese leaders to move beyond the current stalemate, little has been achieved. Domestic politics on both sides and weak institutions in China confound efforts to achieve compromise. Although both sides want China's emergence as a global power to proceed smoothly, neither is willing to forgo short-term interests for long-term gain.

In this rather bleak political climate, the environment offers a fresh start. Gore and Zhu have the opportunity to accomplish something significant. By addressing environmental protection Gore will also serve broader U.S. interests of human rights and democracy, U.S. business development, and international security. By influencing China's economic and environmental choices, the United States will fundamentally shape the China that will emerge in the 21st century. Ensuring that China becomes a constructive participant in the international system will take time. Progress on the environment, as on other issues, requires both sides to commit themselves to a long-term strategy of institution-building to enable China to meet its domestic challenges as well as its international obligations. This does not mean that the United States should allow China to ignore its commitments in the interim. But the United States is best served by engaging China and helping it develop the capacity to be a respected and effective international actor. America's interests in China are significant and growing. We should take the time to get the relationship right.

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  • Elizabeth Economy is Deputy Director of Asia Studies and Fellow for China at the Council on Foreign Relations. She also served as Co-chair of the Woodrow Wilson Center's Working Group on Environment in U.S.-China Relations.
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