What is to be done about the smog?

Business & Technology

Top China news for December 21, 2016. Get this daily digest delivered to your inbox by signing up at supchina.com/subscribe.


A week of toxic air in northern China

Toxic smog has enveloped Beijing and much of northeastern China for almost a week. We’ve linked to several stories about the polluted skies over the last few days, the most horrifying of which is perhaps a Reuters piece titled “Air pollution in northern Chinese city surpasses WHO guideline by 100 times.” This week in Beijing, levels of PM2.5 fine particulate matter, which can enter blood vessels through the lungs, have been bumping against the 500 micrograms per cubic meter limit, above which the U.S. Department of State simply calls the pollution level “beyond index.” In 2010, the air quality monitor installed on the roof of the American Embassy in Beijing, which has a Twitter feed, tweeted a PM2.5 reading above 500 and called it “crazy bad,” a description coded into the monitor by an engineer who may not have dreamed that the air quality could get so severe. The situation this week has been even worse in many places in northern China; for instance, Shijiazhuang, a city of around 2 million people southwest of Beijing, has recorded PM2.5 levels above 1,000.

Citizen reaction to the week of bad air has been strong. Chinese social media is full of postings about the pollution, photographs of smog, and dark humor about the problem (see image above). An image shared by millions online showed students at a middle school taking an exam outdoors in air that looks like smoke (noted by The New York Times here). Today, Chinese state media reported that the principal of the school was suspended.

Some are not content with online complaints alone: The Financial Times writes that five lawyers have brought a case against the local governments of Beijing, Tianjin and Hebei for failing to implement their own environmental regulations. “This is the first time that lawyers have used an administrative lawsuit to protest the government’s treatment of air pollution,” said Wu Qiang, an expert on Chinese political protests. “It marks a new stage in the environmental movement.” Meanwhile, those who can are escaping: On Monday, we linked to a South China Morning Post story about Beijing’s “smog refugees,” who are fleeing the capital in search of cleaner air and driving up the price of flights to places with cleaner air. Not everyone who has the means has been able to leave — the severe smog has caused the grounding of flights and the closure of expressways and ports.

What is causing the smog? Most reports blame coal burning for electricity generation and heating, but according to SCMP, some critics have raised concerns that government measures to tackle pollution are contributing to the problem. [CORRECTION: The information in this article about windfarms has no reputable sourcing whatsoever. The only published paper of any repute that addresses this issue was published by the National Renewable Energy Laboratory which says that “no observational or simulation-based evidence would suggest that Inner Mongolia wind farm wakes would persist far enough to affect Beijing air quality.]

The response in Chinese state media to the pollution and ordinary people’s concern about it has been muted. Today, the only story about the smog on Xinhua News Agency’s Chinese home page is a short article quoting an “expert” who says that a good diet can ameliorate some of the health issues cases by pollution, while Xinhua’s English home page has only a brief report titled “Xi stresses clean energy use to reduce smoggy days.”

Chinese glass manufacturer to invest US$1 billion in the U.S.

The South China Morning Post states that Fuyao Glass, which makes auto windshields, has decided to “­invest US$1 billion in the U.S., including taking over a former ­General Motors plant in Dayton, Ohio.” The company’s chairman, Cao Dewang, explained that “the U.S. was a cheaper and better place to make glass because taxes were much lower than in China.”

The SCMP article is titled “China’s ‘glass king’ shatters manufacturing wisdom with move to the U.S.,” but his move is certainly not the first time a Chinese company has moved or opened manufacturing facilities in the United States. For more than a year, the Rhodium Group has been tracking Chinese investment in the U.S., of which manufacturing is an important part. You can read some of its findings in the report Chinese FDI in the U.S.: Tripling Down on America. The company also maintains a Chinese “investment monitor,” which allows you to see which states the investment is going to. The American Enterprise Institute tracks Chinese investments in the United States as well; its page on the subject is currently headlined “Chinese investment in the U.S. shatters records in 2016.” Finally, in November, at SupChina we asked Will a Chinese company own all the pigs in America? after the Chinese-owned WH Group announced a deal to buy Clougherty Packing, California’s largest pork processor.

More China news worth your time is summarized below, with the more important stories at the top of each section.


    • Bring back jobs from China? In Shenzhen, they aren’t that worried / WSJ
      Trump’s vows to get Apple and other companies to move manufacturing away from southern China and back to the U.S. has sparked little concern among executives in the region, reports John Lyons. “The economic forces that transformed this once-poor backwater in Guangdong Province into a sea of skyscrapers are too massive to be rolled back, their thinking goes. Even if Mr. Trump imposes tariffs on Chinese-made goods, as he has threatened to do, it’s now so efficient to engineer, produce and ship electronics from this region of southern China that it could still outcompete the U.S., they say.”
    • To problems with China’s financial system, add the bond market / NYT
      “Prices for government and corporate bonds have tumbled over the past week, a sell-off that continued on Tuesday. The situation has spooked investors, prompting the government to temporarily restrain some trading and to make emergency loans to struggling financial institutions.”
    • Opinion: The Fed puts China in a bind / Bloomberg
      “China is caught in what economists call the ‘impossible trinity,’” writes Christopher Balding. “No country can simultaneously sustain a pegged exchange rate, a sovereign monetary policy and free capital flows. At some point, policy makers must make a trade-off.”
    • China’s New Ride-Hailing Rules Focus on Where Drivers Call Home / NYT
      “Citing safety and other issues, the cities of Beijing and Shanghai said on Wednesday that Chinese ride-hailing companies must stop using out-of-town drivers like Mr. Luo and hire only local residents to sit behind the wheel.”
    • Opinion: The other side of the Chinese economic miracle / The Wire
      Chinese infrastructure investment projects are often beset by poor quality and cost overruns, which “translate into ‘substantial macroeconomic risks,’” writes Deepanshu Mojan. These include “accumulating debt, higher percentage of non-performing assets, distortionary monetary expansion from central banks (involving printing of more local currency to finance high cost infrastructure investment) and so on.”
    • Opinion: The biggest tech trends from China to watch out for in 2017 / Forbes
      Financial products aimed at the middle classes, a tighter environment for startup funding and global expansion are key themes for the new year, according to Jordyn Dahl.
    • China’s Oscar-winning soccer party / Bloomberg
      “Chinese soccer has huge potential, but that will take time to realize,” write Christopher Langner and Matthew Brooker. “The more that is lavished on foreign players, the less there is for youth coaching and upgrading ‘cabbage patch’ pitches.”
    • China to tighten green car subsidy program following scandal / Reuters
      “China will raise technical requirements for green energy cars to receive subsidies and make awards retroactive rather than at the time of purchase, as it tries to rein in widespread cheating by automakers uncovered earlier this year.”



    • China cheers as Taiwan splits with one of last few friends / Bloomberg
      “The split between Taiwan and the West African island nation of Sao Tome and Principe cuts to 21 the number of nations that recognize the government in Taipei, rather than Beijing,” report David Tweed and Debra Mao. “The falling out was welcomed by China’s foreign ministry Wednesday as Taiwan accused Sao Tome of making ‘astronomical’ demands for fiscal aid to maintain ties.”
    • China’s island-building skills lift hopes in Duterte’s backyard / Bloomberg
      “Chinese investors are set to spend $200 million to raise three islands from the sea to create a new port,” writes Norman Aquino. The project, in Philippine president Rodrigo Duterte’s hometown of Davao, is “a direct result of Duterte’s October visit to Beijing, when he secured investment and credit pledges worth $24 billion.”
    • Thailand seeks to develop military production facilities with China / Reuters
      “Thailand and China are in talks about building military production facilities in Thailand, a Thai defense ministry spokesman said on Wednesday, the latest sign of warming relations between China and America’s oldest ally in Asia.”
    • China’s anticorruption drive ensnares the lowly and rattles families / WSJ
      “A pig farmer’s confession to bribery — and what happened after he retracted it — shows a dark side to President Xi Jinping’s popular campaign against official graft,” The Wall Street Journal reported. “Families around China say overzealous authorities have forced confessions, tortured suspects and made improper convictions.” Meanwhile, Reuters states, “The People’s Liberation Army is…reeling from Xi’s anticorruption campaign, which has seen dozens of officers investigated and jailed, including Xu Caihou and Guo Boxiong, both former vice chairmen of the Central Military Commission.”
    • China restricts sharing of ‘unofficial’ videos on social media / The Guardian
      A notice from the State Administration of Press, Publication, Radio, Film and Television says that “Weibo, WeChat and other online social media are not allowed to disseminate user-generated audio or video programs about current events.”
    • Ethnic Chinese candidate stands for far-right Australian party on anti-Chinese platform / TIME
      The Taiwanese-born Shan Ju Lin, who is believed to be the One Nation Party’s first Asian candidate, “alleges that the Chinese government is already influencing the Labor and Liberal parties — the two mainstays of Australian politics — and that an influx of Chinese government supporters will make things worse.”



    • What China claims to have invented / The Economist
      Xi Jinping “has been trying to focus public attention on the glories of China’s past as a way to instill patriotism and provide a suitable historical backdrop for his campaign to fulfill ‘the Chinese dream of the great rejuvenation of the Chinese nation.’”
    • Why China’s parents tackle bullies on their own / BBC News
      “Analysts say that by treating bullying as a series of individual incidents to be settled and forgotten rather than a systemic issue to be tackled, parents end up resorting to unorthodox means to protect their children.”
    • ‘Great Wall’ producer on what Hollywood and China can teach each other / NYT
      “With this movie, Zhang Yimou and I set out to defy every stereotype that you can think of. All the roles you constantly see Chinese actors in are not in this movie,” says Peter Loehr. “There is no mafia guy, there is no triad guy, there is no prostitute…. I think when people see the movie they’ll think, ‘Wow, this is a big step in the right direction, and this is a true collaboration between actors in both countries and they at least have equal footing.’”
    • ‘Messy, mindless, illogical’: Chinese moviegoers review Matt Damon’s film ‘Great Wall’ / Quartz
      “The film currently holds a 5.4/10 rating on Douban, China’s IMDB-esque film portal, with over 40 percent of over 70,000 reviews rating the film either one or two stars out of five.”
    • Open door: Who benefits most from Hollywood’s courting of China? / The Guardian
      Phil Hoad looks at 10 parties who stand to gain from Hollywood’s shift toward China, including Wang Jianlin, Marvel and Scarlett Johansson.
    • ‘Your Name’ boom in China could end in an instant / Nikkei Asian Review
      An essay recently published on a website linked to the Chinese government suggests banning cultural imports from Japan as one way of retaliating against perceived insults by its leadership. This could affect prospects for the success of films such as Your Name, which recently became the highest-grossing Japanese movie in China.
    • Could Jane Zhang become China’s first global pop star? / BBC News
      While the Chinese pop star’s English-language album won’t be released until April, the single “Dust My Shoulders Off,” produced by Timbaland, is the first by a Chinese artist to reach the top five on the iTunes chart, and the accompanying art-inspired video has garnered millions of views on YouTube.