China’s coal-fuelled boom

| 14th May 2020
Steelmaking is one of China’s coal-hungry industries
People & Nature
Deng Yingtao presented a scathing critique of economic growth thirty years ago - finally we must listen.

For socialists (including me), this story also says something about the relationship between twentieth-century state socialism and capitalism.

Deng Yingtao, a high-profile Chinese economist, called the world to action thirty years ago in his book A New Development Model and China’s Future: “We can no longer act on nature with impunity.”

Yingtao argued that the “classic” model of economic development “poses a threat to humanity’s very existence”. China needs a new development model, based on renewable resources used effectively and sustainably, that will be built on the old model’s ruins.

This message was ignored by the political leaders it was addressed to. In this review article, I will consider why.

Expansion

In the 1990s, the Chinese Communist party leadership prioritised expansion of export-focused manufacturing industry. The industrial boom really took off in the 2000s, fuelled by mountains of coal – the classic unsustainable resource.

China has consumed more coal than the rest of the world put together in every year since 2011; more coal than the entire world used annually in the early 1980s; and more than twice what all the rich countries together used annually in the mid 1960s, during their own coal-fired boom.

The primary beneficiaries of this economic model are not China’s 1.3 billion people. The big fuel users are in China’s giant east-coast manufacturing belt – which produces, in the first place, energy-intensive goods for export to rich countries: steel bars, cement, chemical products, agricultural fertilisers and electronics products. Household fuel consumption remains extremely low.

This level of fossil fuel use can not go on, not in China and not anywhere else, without courting the most horrendous dangers brought about by global warming.

Deng Yingtao made a compelling argument against going down this road, before the decisions were made. 

Economy 

In the introduction to his book, he pointed to the yawning gap between rich and poor countries; the multinational companies’ rising power; and the damage done to the global south by capitalist boom-and-bust.

The “classic” development model had led to “a world economy dominated by the developed West and based on an inequitable international division of labour”, which had proved a “major obstacle to modernisation” for developing countries.

The solution, he argued, was not to adopt the “western theory of modernisation”, based on large-scale consumption of non-renewable resources, but to combine aims of economic development with a focus on renewable resources.

In A New Development Model, a sometimes dense economic text, Deng presented a scathing critique (chapter 6) of the “worthless cultural concepts” underlying the ideology of economic growth. He criticised the worth of Gross National Product as a measure of economic success.

Deng followed international economics debates, and referred to the work of western scholars on natural limits, including Elinor Ostrom and the authors of the Limits to Growth report. He skewered, at great length, the idea that market forces could allocate resources efficiently – an indication, I suppose, that such ideas were becoming fashionable in China in the 1980s.

In conclusion, Deng set out his proposals for a new development model, which “will be based on renewable resources, and will protect these resources by means of effective and sustainable utilisation”. Non-renewable resources such as oil, coal and other minerals have to be used “in the most economic, non-polluting way”, in the context of a transition to renewable resources.

Changes in the resource base, Deng argued, “will significantly alter the way we live”.

Politics

Some key sections of Deng’s book are reproduced her. And I have written a separate article about his life as a Communist party member and scholar, and the group of reform economists of which he was one.

Reading Deng Yingtao’s book thirty years after it was written, I think it can help us to reframe our ideas about many big questions: the ecological crisis, its relationship to capitalism and the class struggle, and the role of twentieth-century state socialism (or Stalinism, if you want to call it that).

Let’s first extract ourselves from the close-up, political aspects of this. On climate change, just as (more obviously and immediately) on coronavirus, heaping blame on China is standard fare for Donald Trump and his near-fascist ilk.

Faced with their racist-tinged rhetoric, many people who try to think seriously about the ecological crisis (including me) respond by pointing out that China’s coal-fired boom serves rich-country economies, above all.

Even though China is now the world’s number one emitter of greenhouse gases, its emissions per person are way under half of those in the USA, that held the number one spot for more than a century before that.

Growth

About three-quarters of China’s emissions are from industrial production (compared to, typically, one third in rich countries); Chinese per-capita household emissions are a small fraction of rich countries’. And then there’s the historical responsibility of the rich countries, that their negotiators at international climate talks are so ready to deny.

All that is true. But still, we are left with the fact that in the 1990s, the Communist party leadership decided on policies that not only made the economy the prime supplier of energy-intensive goods to the rich world, but also turned the screw of non-renewable resource use in a way that imperils the whole of humanity.

It’s important to understand why. From Deng Yingtao’s book we learn that, in adopting these policies, the Communist party not only brushed aside opposition from China’s dissident environmentalists, but ignored stark warnings made at the heart of the elite intelligentsia.

Deng Yingtao cried “stop!”, and they carried on. Reading about Chinese government in the 1990s, it is clear that – despite signing the Rio treaty in 1992, and talking the talk about climate change – political leaders prioritised “economic growth” at all costs. Much like their counterparts in the rich countries.

The most powerful man in China, Deng Xiaoping, issued proclamations in 1990-92 about the urgency of increasing the rate of economic growth that mentioned neither environmental protection in general, nor the need to constrain greenhouse gas emissions in particular.

Development

Jiang Zemin (Communist party general secretary 1989-2002), who made the political running in the mid 1990s, stood for “neoconservatism and east coast developmentalism”, the political scientist Joseph Fewsmith wrote.

The industrial development centred on the east coast became the political priority; the market reforms that spurred it on resulted in rising property prices, regional inequalities, an explosion of private business and the emergence of the nouveau riche – which in turn provoked social tensions.

China’s gross domestic product (GDP) grew steadily through the 1990s, but so did the gap between rich and poor, Fewsmith concluded. And: "Growing income inequality, corruption and worsening relations between cadres and peasants were generating growing numbers of social conflicts."

Another western researcher of China, Peter Nolan, put it this way: "China’s attempt to construct an industrial policy has occurred [in the 1990s] in the midst of the era of capitalist globalisation, which has produced unprecedented global industrial concentration of business power, far beyond that which faced Japan or Korea at a similar phase in their development. The industrial policies pursued by Japan and Korea could not easily be transferred to China."

After “initial cautious experiments” at market reforms in the 1980s, in the 1990s large state-owned enterprises were turned into corporate entities with diversified ownership, shares markets took root, and joint ventures were established with international companies

Fuel

China’s industrial policy, then, was shaped by the changes in world capitalism: globalisation, the internationalisation and computerisation of financial markets, and the neoliberal obsession with privatisation and “liberalisation”, as a way of disciplining and exploiting the countries of the global south.

When Chinese politicians put aside the declarations made about climate change at Rio, and pressed their feet down on the accelerators of industrialisation, they were acting in concert with the political leaders of the western powers – whatever war of words was going on between them.

These policies bore their most ecologically disastrous fruits after 2001, when Chinese accession to the World Trade Organisation (WTO) boosted the export boom. Between 2000 and 2007, China’s output of steel and aluminium more than doubled; cement and fertiliser production went up by six and five times respectively.

The primary fuel for all this was dirty, dangerous coal, shovelled – much less efficiently than in rich countries – into blast furnaces, power stations and factories.

Reminder

Peter Nolan, at the end of his Foreword to the English edition of Deng Yingtao’s book, wrote that, instead of the new development path that Deng pointed to: "China has essentially pursued the classical, energy-intensive development path that was followed by the high-income countries themselves.

"China’s urban population mainly lives in vast mega-cities, where the urban skyline has been transformed from mainly Soviet-style, low-rise apartment blocks into a forest of high-rise apartment buildings festooned with air conditioning units on the outside and packed with consumer appliances inside."

Nolan quotes the environmentalist Rachel Carson, who wrote that the road travelled by western capitalism is forked, that it had taken the road to disaster, and that only the other fork – the one “less travelled by” – would assure the earth’s future. Nolan concludes gloomily: "Deng Yingtao’s book serves as a poignant reminder of the “road less travelled” that China might have chosen, but did not take.

It’s high time we all paid more attention to this reminder. Deng Yingtao’s prescient warnings about China’s industrial juggernaut have been ignored as much by the world at large as they were by the Communist party leadership at the time.

Since the carefully-edited English edition of his book appeared in 2014, it seems to have received no attention inside or outside universities. I couldn’t find any previous reviews of it.

Change

For socialists (including me), this story also says something about the relationship between twentieth-century state socialism and capitalism.

In the Soviet Union as well as China, state socialism carried through the brutal task of industrialisation – with all the attendant human suffering – that capitalism had accomplished in Europe and north America in the nineteenth century.

State socialism not only failed to produce an economic model that worked as an effective alternative to capitalism, but also paved the way for the return of capitalist exploitation with a vengeance, in the 1990s, to eastern Europe, the former Soviet states and China – each in very different ways.

China, with its vast reserve of cheap labour, preserved its authoritarian state structure – in contrast to the Soviet one, which fell apart – and so made the most “successful” transition.

Now we are counting the full cost of this “success”. The Chinese leaders, like their western counterparts, closed their eyes to the ecological consequences of their actions, despite acknowledging at Rio the climate scientists’ clear warnings.

In the twenty-first century, a de facto alliance between the overlords of world capitalism, and the authoritarian political descendants of Chinese Stalinism in Beijing, has brought humanity to the brink of disaster.

Hopes of undoing the work of this unholy alliance lie not in the international climate talks process – notwithstanding the obvious logic of the attacks made on the western powers there by the developed nations, with China foremost – but in radical social change.

This Author 

Gabriel Levy is a writer with an interest in socialism, ecology and the former Soviet countries, who blogs at peoplenature.org. He has been active in the labour movement all his life. This article was first published by People & Nature

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