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China Intensifies War on Pollution

China’s central government is undertaking a huge anti-pollution campaign using central inspection teams. The campaign is having a significant impact on markets, disrupting production and also precipitating an increase in commodity prices.

The Chinese central government has been sending central inspection teams to local provinces to supervise and guide the environmental protection tasks since 2016. Up to now, 4 batches of inspection teams has been dispatched and have already covered most provinces. Enforcement and execution have been more drastic this spring and summer and a lot of enterprises have been shut down.

The provinces that have been inspected include:

  1. The first batch of inspection team: Inner Mongolia, Heilongjiang, Jiangsu, Jiangxi, Henan, Guangxi, Yunnan, Ningxia;

  2. The second inspection team: Beijing, Shanghai, Hubei, Guangdong, Chongqing, Shaanxi, Gansu;

  3. The third inspection team: Tianjin, Shanxi, Liaoning, Anhui, Fujian, Hunan, Guizhou;

  4. The fourth inspection team: Jilin, Zhejiang, Shandong, Hainan, Sichuan, Xizang, Qinghai, Xinjiang.

The inspection team also undertakes inspections based on public feedback. Take the fourth inspection team for example, they received over 20 thousand reports from the public about pollution and have handled 3 quarters of them up to now. Over 7,000 enterprises have been required to rectify issues and been issued with penalties. 146 people have been held in detention pending legal proceedings.

The latest anti-pollution campaign is not without its critics with many claiming that inspectors don’t distinguish between enterprise polluting within national standards/stipulated limits and those enterprise exceeding requirements. There are also major questions about whether or not the inspections offer a long term deterrent or if they are only effective during the inspection period.  

Production capacity in many industries has been impacted. Many factories in the coating industry, printing industry, paper making industry, rubber and plastic industry, etc. are having difficulties meeting their orders on time, with some having to cancel orders. Significant price increases can be expected in many industries. While shutting down factories regardless of their emission level and pollution treatment techniques is the easiest way to reduce pollution temporarily it will only be transiently effective and better measures will be needed in future.

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