Pan Yue’s Unique Vision of Green China

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The news that Mr. Pan Yue, Deputy Minister of China’s Ministry of Environmental Protection, will soon move to a new position outside the environmental apparatus (a promotion) leaves many people with mixed feeling. In his capacity as a deputy environment minister for the past 13 years, he has been a symbol of the Chinese government’s green commitments, winning himself the unforgettable nickname “Hurricane Pan” (an allusion to the numerous high-profile campaigns he waged to crackdown on polluting industries).

While he pioneered many initiatives that are later considered groundbreaking (his creation of a Green GDP system is one of them), one legacy of his could be easily overlooked especially after an extended period of low public visibility of him in recent years. It is his articulation of a kind of environmentalism that is so organically Chinese that it takes deep root in China’s national environmental narrative without being noticed. Today, upon the departure of Hurricane Pan from the environmental field, it is a good moment to review that mark he has left.

In 2007, Pan made a speech in front of a group of young students which was later published online as an article. It was at the height of his reputation as China’s “environment tsar”, and he demonstrated an eloquence unparalleled among Chinese bureaucrats. The article provides an interesting snapshot of Pan’s thinking on an issue that has occupied a special place in his heart ever since he became one of China’s first environmental journalists in the 1980s.

Unlike mainstream environmental narratives of the West, which often have Nature at the heart of their concern, Pan’s message is one of national rejuvenation. The fundamental issue he grapples with is not the relationship between Man and Nature, but the one between the environment and the Nation. Titled “Green China and Young China”, the article tells the audience that China has reached the stage where continued environmental disasters not only degrade its natural resources and harm its economy, but also hamper its prospect of (re)rising into a great nation.

He places China’s current environmental crisis in the same historical vein as the imperialist invasion of the country in early twentieth century and its self-inflicted political turmoil during Mao’s time. He maintains that every generation of Chinese in the past century shoulders their own historic mission in overcoming the seemingly insurmountable obstacles and bring the country back to its rightful place in history. And the new generation will have to grapple with their own: the environmental challenge. Such elevation of the environmental issue might seem self-serving. After all, Pan was at that time the spokesperson of a weak ministry badly in need of attention and resources. But much of his “scaremongering” predictions then, that the environmental crisis would quickly worsen to shake the country’s still wobbly economic foundation, proves to be prescient after the world watched first-hand how apocalyptical air pollution shrouded large part of the country in a matter of a few years after the article was published.

What’s striking in Pan’s vision of national rejuvenation, beyond the possible intention of mobilization for support, is that it does not just inherit an old-fashioned narrative of “enriching the country and build up its muscles”, but develops an alternative vision that contains a set of distinctive aspirational features such as social justice, democracy and sustainability. In this line of thinking, the environment adopts another layer of significance, serving as the Chinese society’s “laboratory” to experiment on some of these elements.

This is probably Pan’s biggest contribution to China’s environmental field: the direct linkage of environmental protection with a set of broader progressive agenda items. In his own words: “Every aspect of the environmental issue today mirrors an aspect of the Chinese society in general. And every solution to it is an experiment to reform China.” The greening of manufacturing is a step towards the upgrade of China’s industrial capabilities; Ecological compensation, the practice of downstream regions paying upstream regions for its ecological services, is a pilot for larger social justice initiatives; Public participation in environment-related decision making lays the foundation for reforms in governance structure.

The 2005 controversy over the seepage-proofing of a lake in the Old Summer Palace became a showcase of Pan’s “laboratory” metaphor. In that case, the Old Summer Palace administrative office irritated the public for its project to cover the bottom of its historic lake with impermeable membrane, in an attempt to prevent water loss. Environmental groups were concerned that it would destroy the ecosystem of that area. They were even more outraged by the fact that the project had already been underway without undergoing a proper environmental impact assessment. Pan’s agency seized upon the opportunity and pushed the Old Summer Palace administration to redo a proper impact assessment for the lake project. Moreover, they went one step further by organizing an unprecedented public hearing for the assessment, inviting the park administration, NGOs, researchers and the press to openly debate the merit of the project. When commenting on the case, Pan said that he would like the case to be a demonstration of the agency’s transparency and respect for procedural integrity.

It is probably not too far-fetched to say that Pan’s “experiment” narrative opens up political space for the country’s nascent environmental movement. By connecting the field with noble objectives of nation-building, Pan lends it newfound legitimacy. The result is a relatively free atmosphere where advocates can touch on broader governance issues such as information disclosure and procedural rights in ways that their counterparts in other issue areas do not enjoy. Years later, when China’s dominant environmental narrative has turned more personal and right-based (the emergence of NYMBYism is an example), Pan’s “environmental nationalism” may seem a bit vintage. Yet it is exactly because of that legitimacy early on that a more diverse discourse on the environment can take hold.

There are elements of Pan’s environmental thinking that are more idiosyncratically his. For instance, he believes that environmental problems are fundamentally rooted in ethics and culture, and should be addressed in such dimensions. His critique of the country’s ecological plight is morally charged, accusing people of a single-minded, short-sighted pursuit of materialistic wealth, without regard for their moral responsibilities. His invocation of Confucian values as a way to approach the era’s fundamental challenges reflects not just a nationalistic leaning, but also a conviction that problems in the material world originate from the heart. Such a moral and cultural critique of China’s environmental crisis has largely been absent after the passing away of prominent environmental intellectuals such as Liang Congjie (founder of Friends of Nature, China’s earliest environmental NGO). In a field that is now filled with discussions over technical fixes and policy configurations, a look back at Pan’s words from 2007 serves as a reminder of the multi-dimensional nature of China’s green conundrum, and the different possibilities in intervention.

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From “Crazy Chen” to “Made in China 2025”

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We first met “Crazy Chen” at the Hong Kong Football Club two weeks ago. The venue still retains a somewhat cute residue of colonial snobbishness (alert: you are not allowed to make calls with your mobile phone in this venue, but the vintage landline phones at the lobby are ok!). It was part of a two-week workshop for professionals from major global corporations (banks, funds, insurance companies and manufacturing corporations) and non-governmental groups to better prepare themselves for the challenges of the 21st century, with a focus on Asia. A key component of the workshop was to spend a week with a real Chinese SME (small and medium-sized enterprise) to help it solve problems and in return gain some insights for ourselves.

When this Wuhan-based businessman refers to himself as “Crazy Chen”, you know it carries a sort of pride in it. It’s not lunatic crazy. It’s Steve Jobs crazy. He is the Chairman and founder of this Chinese start-up that makes a kind of environmentally-friendly plastic (I will not reveal too much technical details here). As someone who moved from real estate into manufacturing at the age of 54, Chen carries the mixed disposition of new money shamelessness and entrepreneurial respectability. He spent the first ten minutes of his speech boasting about how rich he was (he had a dozen debit cards each containing over 5 million RMB). He used inappropriate language to refer to women (a common feature of Chinese men of his age). He even bragged about how young he looked (indeed he did not look like someone over 70. Not sure how much money he had spent on cosmetics). On the other hand, his personal story of self-elevation does carry a flavor of legend on the verge of mythology. He decided to pursue a master’s degree in polymer science well after middle age, with almost zero preparation in math and English (two key subjects of the entrance exam). He claimed that he mastered math by himself within a few month and gave up completely on English (got only 26 in 100). Even so he still managed to get into one of Hubei province’s major universities and got his degree in a few years. Through the exposure to the academic world he developed this weird idea of citations: that citation means borrowing from others without innovation. And he wanted to do something new. So he started to spend long hours in his laboratory developing new materials, materials that are more friendly to the environment than traditional fossil based plastics. He claimed that once he stood in the lab for a straight seven days without rest. After he got home, his legs were so swollen that his wife had to use a scissor to cut off his pants before he could get into bed. He fell into sleep and stayed in a coma-like state for 48 hours.

When the 25 of us landed in Wuhan last week, we were immediately shuttled to Chen’s company headquarters, the fruition of his crazy hard work in the laboratory. The company is now managed by his son, “Crazy Chen Junior”. He brought us to our first stop inside the office building, a fancy showroom with all their products, certificates and awards on display. Two years ago, China’s President Xi took some interest in their products when he visited Wuhan. And not surprisingly his picture was featured prominently in the exhibition.

Our immediate next stop was their research labs which they seemed to take particular pride in. The director of their R&D department, a young petite woman, showed us around and introduced the working of their equipment and devices. The labs betrayed a resemblance to those rudimentary ones that you saw in high schools. But the company’s technological edge is not to be underestimated. It held dozens of international and national patents and was among the first Chinese companies to have had received the most stringent certificates from Europe and Japan for its materials. At this point I realized that this was not a poster boy Chinese SME that was complacent in making quick money by manufacturing fake Louis Vuitton handbags or tainted food. It is a technology driven enterprise that represents the break-away from the stereotype “made in China” workshops.

Yet the company was in trouble.

The reason why its management invited us to Wuhan was that it’s stuck. As a new material start-up, it was stuck in making two things: garbage bags and disposable utensils. It was not a very comfortable place to be in as a company. For one thing, it was a low-end, low-recognition category where price competition was fierce and no brand loyalty can be expected. Their biggest markets are those street-side restaurants and wholesalers who sell to those restaurants. But such customers are extremely price sensitive and would strive to cut corners particularly on items like disposable utensils. In this area the company faces formidable competition with cheap plastic products, especially at a time when oil price is at its low point. The policy environment isn’t giving them any edge against its competitors either. For years Chinese cities talk about setting up garbage separation systems and composting facilities which would favor more degradable eco-materials over non-degradable plastics. But such efforts are often fitful and are constantly stalled by a lack of political will and incentives. One city in China took the drastic approach of banning non-degradable plastic bags at the beginning of this year, but it was seen more as an exception reflecting the personal inclination of the mayor rather than a future norm. When we met with a group of municipal officials last week to discuss about this issue, their attitude was visibly tepid. I sensed it when they started to lecture us about the “complexity” of the issue. The underlying message was two-fold: first, they were not ready to disrupt the powerful industry of plastic makers; second, they fear if they did take measures, the “Crazy Chens” and their companies would not be able to bring production to a scale that would fill the opening, which would undermine the legitimacy of such policies.

Sadly, a country perplexed by its ever increasing stream of urban wastes is not ready to pay for an eco-friendly option yet. Left on its own, the company tried to move up the ladder of values by creating its own brand name products and found its way into large supermarkets where middle class consumers picked their household products. Unfortunately, even on those shelves they were unable to collect a premium due the lack of consumer awareness and demand for eco-friendly products. Worse still, they saw themselves squeezed on both ends by better known paper and plastic products on the one hand, and surcharges from the supermarkets on the other, in the form of “listing fees” and promotional expenses. To stay competitive, they had to keep their margin at close to zero or even negative in some cases.

The Chens have their rationale. They would like to make their material more visible for a wider audience to see its possibilities and potential. The retail adventure therefore morphed into an expensive marketing undertaking. The sad thing, though, is that people do not associate garbage bags and disposable stuff with a cutting edge material of the future. And the disposable nature of the products probably turns the really eco-conscious customers away. After all, the “throw away” culture is an antithesis to conservation, which is intrinsically contradictory to the image that the company would like to build.

After a few late night soul-searching sessions with “Crazy Chen Junior” and his management team, we began to realize where the problem was. The company’s core technical edge lies in its “resin”, for which they possess all the patents. Like Coca-Cola’s secret syrup that it sells to bottlers all over the world, the “resin” can be mixed with regular plastics such as PP and PE to create materials with new properties. They are the largest producer of this niche material in China, and the second largest in the world. Its key advantage is the lower carbon footprint and higher degradability compared to fossil-based counterparts. Being located in China, close to the world’s largest manufacturing powerhouse, also gives it an edge against international competitors. But these advantages are all based on a scenario where it sells its “resin” directly, which also gives it a higher margin.

Here comes the pitfall: there is a huge risk in this scenario, which is associated intellectual property. Their biggest fear is that Chinese copycat competitors can easily reverse engineer the resin, wiping out whatever technological edge they still enjoy today. The answer to this challenge is “camouflage”: mixing the resin with other plastic materials to render the resin indecipherable. To do that, they have to source such materials from the open market, allowing their margin to erode in the process. Moreover, they have to invest in blending facilities to be able to blend the resin with other materials. Essentially, it means they’d turn themselves from a Coca-Cola to a bottler just to protect their own syrup. But in China there are tens of thousands of converters who are better at this kind of blending job with a larger economy of scale. That’s why they have to move into consumer products in order to generate more added-value out of the blended material. They are even careful enough not to purchase its production lines in their entirety, but to buy parts separately and then combine them by themselves, which further undermines efficiency. The purpose is again to prevent competitors from following suit. All these factors cut into their profit and keep their bleeding wounds open.

This revelation makes me a bit frustrated. In the end, all we could do to help was to build a business model for them showing that a resin-based business is better for the company. Yet we all realized that they had known it all along. It’s the circumstance that had prevented them from moving toward that direction.

On May 18 this year, the Chinese central government unveiled its ambitious plan of “Made in China 2025“, with an intention to “upgrade” China’s manufacturing sector. In later speeches, China’s Premier Li Keqiang made it clear that his country was no longer content of making T-shirts and other low-end consumer products. He would like to see its massive manufacturing prowess turned towards industrial equipment, telecommunication and new materials, among others. This is not a simple re-configuration of the country’s manufacturing portfolio; it represents a change of business model that would allow Chinese companies to move up the value chain in the global market. A model based on the export of high-speed trains and commercial airliners is qualitatively different from one that’s based on selling toys and cheap plastic cups. But the plight of the “Crazy Chens” speaks to the challenge that lies ahead. The pains that those Chinese SMEs has to take in order to move one tiny step up the value chain illustrates the distance between a vision and the reality.

What It Means to be a Polluting Company that Has Lost Its Powerful Patron

When China’s former “Security Tsar”, Zhou Yongkang, went on trial days ago, I was intently watching the development of another story, the pollution caused by a lead and zinc mine in southwestern China’s Yunnan province that intoxicated an entire village’s children.

The two stories are only remotely connected, on the surface. The mine belongs to a company once controlled by Liu Han, the billionaire whose expansive business empire stretched from real estates to electricity and mining. In 2013, Liu and his brother were charged with 15 accounts of crimes ranging from murder to leading “mafia-type organizations”. They were sentenced to death and were both executed months later. Their rise and fall coincided with the political tides of Szechuan province, the southwestern power base of Zhou Yongkang and his son, Zhou Bin. By pleasing Zhou Bin, the Liu brothers secured their much needed political protection from Zhou Yongkang and his numerous protégés who occupied commanding positions in the top echelon of the Szechuan provincial leadership. The ultimate collapse of that entire layer of protection under the unbearable weight of the anti-corruption campaign of the Xi administration in the end exposed the Lius to fatal radiations of a super nova, costing them their lives.

In a country saturated by pollution stories and depressing accounts of their hapless victims, another one that involves the usual suspect of a major mining company and a small, helpless village could easily have been ignored. But this time, the intriguing alchemy of corruption and the environment produced something slightly different with a unique potency that had not been seen before in the environmental field.

A veteran reporter of contemporary Chinese politics once noted that the extent to which damaging stories about a powerful person can spread in China’s public sphere had become a precise indicator of that person’s political fate. In other words, China’s censors, hiding inside an opaque web of information control machineries, collectively constitute a much faster and more sensitive “nerve system” that signals a person’s political fortune than the country’s judges, prosecutors or disciplinary bodies. Too often, the first crack of business empires, stellar reputations and solid political backing that once seem unshakable emerges when negative stories appear in the media uncensored. Failure to mobilize the country’s censors indicates one’s vulnerability and exposure (but of course this only applies to those who are SUPPOSED to be able to do that).

The Yunnan story vividly illustrates that vulnerability. The first wave of media reports treated it more or less as a regular pollution story, with bland titles that says “Asia’s largest lead and zinc mine causes pollution”. But more discerning outlets, such as the politically weathered Caijing Magazine, quickly jumped on the juicier elements: ownership of that mine and its historical ties with an entire group of fallen heavyweights (including Liu Han and former Yunnan provincial chief Bai Enpei). If it had been two years earlier, the story would have probably been killed right on the spot. But with censors no longer standby to guard those interests, the story travelled unabated. What followed resembles the daily “circle of life” on the African savanna. After the big carnivores such as Caijing had first spotted and feasted on the game, China’s website editors gathered en masse to finish off the carcass. Accustomed to playing the game of Catch Me If You Can with the censors, they won’t let go of any opportunities to maximize the viewership of their news posts, sometimes determined by time windows as short as several minutes. And to do that they have developed an acute sense for vulnerability. Not long after the Caijing story appeared, website editors quietly “retrofitted” the titles of the original stories to harness the sexier corruption angles, entertaining with wordings such as “ex-mafia-head” which drew more attention. The censors once again turned a blind eye to these changes.

Left entirely on its own, the company resorted to pathetic tricks that were often used by those of much more modest backgrounds: key word contamination. Just one day after the news broke in the Chinese media, a dubious piece of article started to emerge on numerous news organizations’ official websites that contained the exactly same key words as news reports from the previous day: “Asia’s largest lead and zinc mine,” “pollution”, and the company’s own name. Yet the actual content of the article was pure corporate PR, praising the company for its environmental efforts. It took advantage of sections of the news organizations’ websites that were on sale for such materials and camouflaged itself as a genuine news item. As a result, search engines such as Google and Baidu were tricked to pick it up as news, “diluting” the pool of information that contained the actual negative coverage.

In a weird way, the fall from power and privilege manifests itself in terms of “exposure containing methods”. No longer enjoying the “free” service of diligent state censors, those “orphaned” polluting companies are thrown into the “market” where they have to buy their way out of their own PR mess.

What “Under the Dome” tells us about where China stands on air pollution

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Three days ago something very unusual happened on the internet in this country. Almost overnight, hundreds of millions of smart phone screens here were occupied by just one person and one thing: Chai Jing’s nearly-2-hour documentary on air pollution, called “Under the Dome.”

Who’s Chai Jing? She is a former reporter of CCTV’s prime-time news program “News Investigation,” which is sort of China’s 60 Minutes. So roughly speaking she can also be considered China’s Katie Couric, only more famous. A while ago she quit her enviable job and gave birth to a daughter. After being away from the spotlight for over a year, she came back with this documentary that adopts the format of a long TED talk, or (if you still remember) Al Gore’s award-winning documentary on climate change, An Inconvenient Truth. What she did was standing in front of a studio audience, narrated a fascinating personal story about trying to figure out the smog problem for the sake of her little child who was born with a benign tumor, with the help of state-of-the-art visual aid technologies. To answer three basic questions (What is smog? Where does it come from? What shall we do about it?), she interviewed dozens of top experts and officials in China, visited LA and London to learn from their experience, and consulted tons of scientific literature, all in the capacity of an individual citizen. She claimed that she spent 1 million Chinese yuan (about 160,000 USD) out of her own pocket to make this documentary. And the Chinese public responded to her initiative with absolute enthusiasm: One estimate puts it at more than 175 million clicks within merely 48 hours, a jaw-dropping performance for a serious, lengthy piece of hardcore journalism.

No compliment would be too flattering for such a tremendous public service that Chai Jing has done. And the viewership of her documentary probably has already surpassed that of An Inconvenient Truth, which won Al Gore an Oscar and a Nobel Peace Prize. And just like An Inconvenient Truth, Under the Dome has a very clear intention of influencing public opinion on an issue that is so crucial to this country now. So appreciation and admiration aside, a critical question arises: what kind of impact does the documentary has on Chinese public opinion about air pollution? What does it tell us about where the country stands on this issue?

What we should all be painfully aware of is the tragic irony that Al Gore’s award-winning documentary, no matter how “critically acclaimed” it was, seemed to have ZERO impact on widespread public opinion about climate change. What’s worse, some claim that “(its impact on) public opinion was to increase public skepticism about climate science and polarize public support for both climate and clean energy action,” largely due to Gore’s messaging of “sacrifice” which made him a partisan target (and climate change a collateral damage). This should be a dire warning to anyone who believes that you can sway public opinion just by presenting “solid facts.” It’s the frame, stupid!

Apparently Chai Jing entered the venture with an assumption that there had already been a strong consensus within the Chinese society about tackling air pollution, all she needs to do is to build on this consensus and give the country a little nudge towards action:

“Easily put, everybody wants to breathe clean air. No consensus is stronger in this society than this one. That’s the source of my confidence,” she told People’s Daily’s official website which arranged an exclusive interview with her PRIOR to the release of her documentary.

Even though it is probably too early to make a conclusive analysis of its impact, so far the public response to the documentary shows that the consensus is there, but with certain tensions that may threaten to tear it apart.

What becomes immediately very clear after the release of the show is the official backing it enjoys. And that constitutes a major component of Chai’s “consensus.” The fact that People’s Daily’s official website was one of the first on-line channels to distribute the documentary speaks to the unprecedented level of official support. Other social media channels run by the People’s Daily, such as Xiake Island (a WeChat account), also did not hold back their endorsement, proclaiming that the country’s decision makers should “get used to” this mode of agenda setting. The Global Times’ official Weibo account even criticized those who questioned Chai’s motives as “not genuinely patriotic.” Official endorsement of the documentary was so strong that some observers started to wonder about the true intention underneath. One of them ruminates openly about whether it is the top leadership’s strategy to claim an alternative source of legitimacy by attributing the slowing economy to a noble “war against pollution.”

If the authority’s support was unprecedented, the general public’s reaction was by no means surprising. Chai Jing is a household name in this country and the personal touch of her documentary only makes it more powerful and appealing. A browse of comments under her documentary on Tencent shows overwhelmingly positive reaction to her effort. Many commentators were deeply touched by her account of a personal journey from an indifferent citizen to a deeply concerned mother. A widely read post on Zhihu.com expressed another mother’s strong determination to follow Chai’s lead in taking personal actions to protect her own child. The CEO of one of China’s largest portal websites, Sohu.com, immediately heeded Chai’s call to refrain from driving cars for short-distance errands. And such a sense of agency is a refreshingly new element that she introduced to the public mentality.

Strong official endorsement plus wide public support, this is what assures us that an anti-smog consensus is still “sound”. But is it sound enough to carry tough, unpopular, drastic measures? The documentary actually helps us to run a “stress test” of this precious consensus and disturbing cracks did emerge.

If accusations of hypocrisy (that Chai Jing is a smoker) can be readily dismissed as cheap excuses to continue doing nothing about pollution, there are challenges which should be taken more seriously. Some reactions to the documentary suggest that air pollution may get caught in the entrenched fight between the “liberals (Chinese right)” and “conservatives (Chinese left)” in China’s net space due to Chai’s long time (perceived) affiliation with the former. This may have the effect of alienating or even agitating a still powerful faction in online opinion. For example, the Left’s major criticism of Chai is her advocacy of loosening up the monopoly of state-owned energy companies and allowing more competition so that cleaner energy sources could gain more ground. This triggered guarded reactions from those conservative Leftists who emphasize China’s energy security and state control. A more extreme reaction that got many nods today branded Chai Jing as an agent of a “sinister Green agenda” that intended to undermine China’s industrial strength. This illustrates the real possibility (albeit small at this moment) of an opposition to the entire environmental agenda based on ideology, which is different from the kind of interest-driven opposition from industries that might be affected (see the oil industry’s reaction to the documentary). In a country without partisan politics, how far an ideology-based, sweepingly anti-environmental opposition can go is something interesting to watch.

Class is another potent element that has the potential to rift the existing consensus. Some criticizes the documentary for “completely representing the perspective of an urban middle class,” for them “smog is an enemy that has nothing positive associated with it. But if you interview a steel worker, he may say ‘I would rather have this smog than losing my job.’” None of these oppositions at this moment shakes the consensus that air pollution is a problem. However, they might have a larger impact on how the society chooses to tackle it. Actually a debate is already happening around whether Chai’s documentary prescribes the right medicine to China’s smog problem, with coal industry representatives arguing that existing measures, if fully implemented, are sufficient to render the air breathable, and environmentalists arguing that Chai did not go far enough in advocating for renewables.

When Al Gore made An Inconvenient Truth, his biggest challenge was to overcome that self-denial which was paralyzing climate politics in the United States. Chai Jing faced a completely different public opinion landscape. And her challenge (and responsibility) is how to steer that consensus, which is at the same time strong and vulnerable.