By MATT POTTINGER, STEVE STECKLOW and JOHN J. FIALKA
Staff Reporters of THE WALL STREET JOURNAL
December 17, 2004; Page A1

On a recent hazy morning in eastern China , the Wuhu Shaoda power company revved up its production of electricity, burning a ton and a half of coal per minute to satisfy more than half the demand of Wuhu, an industrial city of two million people. AES Corp., an American energy company, owns 25% of the 250-megawatt facility, which local officials call an “economically advanced enterprise.”

The Chinese plant is outfitted with devices that prevent soot from billowing into the sky. But other pollutants, such as nitrogen oxides, sulfur dioxide and a gaseous form of mercury, swirl freely from the smokestacks. Rather than install more sophisticated and costly antipollution equipment, the plant, which is majority owned by state-controlled entities, has chosen to pay an annual fee, which it estimates will be about $500,000 this year. That option meets Chinese standards but wouldn’t be allowed in the U.S.

The airborne output of Chinese power plants like Wuhu Shaoda was once considered the price of China’s economic growth, and a mostly local problem. But just as China’s industrial might is integrating the country into the global economy, its pollution is also becoming a global concern. Among the biggest worries: the impact of China’s vast and growing power industry, mostly fueled by coal, on the buildup of mercury in the world’s water and food supply.

Scientists long assumed mercury settled into the ground or water soon after it spewed forth as a gas from smokestacks. But using satellites, airplanes and supercomputers, scientists are now tracking air pollution with unprecedented precision, discovering plumes of soot, ozone, sulfates and mercury that drift eastward across oceans and continents.

Mercury and other pollutants from China’s more than 2,000 coal-fired power plants soar high into the atmosphere and around the globe on what has become a transcontinental conveyor belt of bad air. North America and Europe add their own dirty loads to the belt. But Asia, pulsating with the economic rebirth of China and India, is the largest contributor.

“We’re all breathing each other’s air,” says Daniel J. Jacob, a Harvard professor of atmospheric chemistry and one of the chief researchers in a recent multinational study of transcontinental air pollution. He traced a plume of dirty air from Asia to a point over New England, where samples revealed that chemicals in it had come from China .

One reason China’s power industry spews out so much pollution is that under the nation’s rules, many plants have the option of paying the government annual fees rather than installing antipollution equipment. Moreover, Beijing officials concede they lack the authority to shut down heavily polluting plants. And local inspectors, who don’t report to Beijing, are reluctant to crack down on power companies that generate jobs.

In the U.S., the consequences are being detected not just in the air people breathe but in the food they eat. The U.S. Environmental Protection Agency recently reported that a third of the country’s lakes and nearly a quarter of its rivers are now so polluted with mercury that children and pregnant women are advised to limit or avoid eating fish caught there. Warnings about mercury, a highly toxic metal used in things ranging from dental fillings to watch batteries, have been issued by 45 states and cover four of the five Great Lakes. Some scientists now say 30% or more of the mercury settling into U.S. ground soil and waterways comes from other countries — in particular, China .

The increasingly global nature of the problem is rendering local solutions inadequate. Officials in some countries are using the presence of pollution from abroad “as an argument to do nothing [at] home,” says Klaus Toepfer, executive director of the United Nations Environment Program in Nairobi, Kenya.

Yet global remedies — primarily treaties — are even harder to achieve. The last such initiative, the Kyoto Protocol, aimed at limiting emissions related to global warming, was rejected by the U.S., the largest contributor of such emissions — and doesn’t apply to China , the second-largest emitter. The best shot at a treaty for transcontinental pollution, Mr. Toepfer believes, would be to regulate a single pollutant that everyone agrees is hazardous. He recommends starting with mercury.

China is already believed to be the world’s largest source of nonnatural emissions of mercury. Jozef Pacyna, director of the Center for Ecological Economics at the Norwegian Institute for Air Research, calculates that China , largely because of its coal combustion, spews 600 tons of mercury into the air each year, accounting for nearly a quarter of the world’s nonnatural emissions. And the volume is rising at a time when North American and European mercury pollution is dropping. The U.S. emitted about 120 tons of mercury into the air in 1999 from manmade sources. Chinese power plants currently under construction — the majority fueled by coal — will alone have more than twice the entire electricity-generating capacity of the U.K.

The overwhelming majority of China’s power plants are built, owned and operated by Chinese companies. Speaking about the Wuhu Shaoda power plant, Robin Pence, a spokeswoman for AES, says the Arlington, Va., company “is a minority partner in Wuhu. As such, we neither operate nor control the plant.” She adds that AES didn’t build the plant and that its world-wide policy for plants that it does design and build is to meet emission standards set either by the local country or the World Bank, whichever are more stringent. The Wuhu plant’s manager declined to comment.

Natural Sources

EPA scientists estimate that a third of the mercury in the atmosphere gets there naturally. Traces of the silvery liquid in the earth’s crust make their way into the sky through volcanic eruptions and evaporation from the earth’s surface. It took the industrial age to turn mercury into a public-health concern. Mining, waste incineration and coal combustion emit the metal in the form of an invisible gas. After it rains down and seeps into wetlands, rivers and lakes, microbes convert it into methylmercury, a compound that works its way up the food chain into fish and eventually people.

The dangers of significant methylmercury exposure to the nervous system are well documented, particularly in fetuses and children. Permanent harm to children can range from subtle deficits in memory and attention span to mental retardation. In January, EPA scientists released research indicating that 630,000 U.S. babies born during a 12-month period in 1999-2000 had potentially unsafe levels of mercury in their blood — about twice as many babies as previously estimated.

Adults aren’t immune, either. Joel Bouchard, a National Hockey League defenseman who spent the past two seasons with the New York Rangers, says that last December he began suffering dizziness, headaches, insomnia and blurred vision — forcing him to miss around 25 games. “It was, honestly, like I was in the Twilight Zone,” he says. A team doctor discovered Mr. Bouchard had abnormally high levels of mercury in his bloodstream. The suspected cause: the tuna and other fish he’d been eating almost daily as part of what he thought was a healthy diet. He says his blood levels have since returned to normal and the symptoms have disappeared.

Few places more starkly illustrate the threat from mercury, and the obstacles to containing it, than China .

In Qingzhen, a town in the poor mountainous province of Guizhou about 800 miles southwest of Wuhu, a 53-year-old female rice grower who goes by the single name of Zhang and thousands of other farmers are surrounded by mercury pollution. Dark smoke surges from the local power plant, staining crops a drab gray. The plant flushes eight million cubic meters, or about 10 million cubic yards, of ash and water each year into an area adjacent to a major drinking-water reservoir. Some fish near the plant have levels of mercury 18 times what the EPA and the Chinese government consider safe, according to the Guizhou Provincial Environmental Science and Research Institute, which recently did a seven-year study of the province’s mercury pollution.

The plots of land that Ms. Zhang and her neighbors tend are especially poorly situated. Nearby is the Guizhou Crystal Organic Chemical factory, which over the years released up to 100 tons of mercury into a stream that runs through her village, according to the study. An official in the factory’s environment and safety department calls the report’s estimate “too high,” and says the factory stopped dumping mercury by 1998. But the stream still runs black and reeks so strongly of chemicals that people unaccustomed to the smell struggle not to gag when standing downwind.

Ms. Zhang and her neighbors are used to the smell. With no other choice, they pump water from the poisoned stream onto dozens of acres of rice paddies each planting season. Rice from the fields tastes sour, she says. “When you wash it, the water in the pot turns the same color as the river.” Grain from these fields contains nearly 40 times as much mercury as rice from Shanghai, according to the study. Laboratory mice fed the rice became hyperactive and their nervous systems began deteriorating within a month, the study says.

Farmers in the village complain of periodic fits of shaking. Ms. Zhang suspects the pollution is the reason she and some neighbors have stomach cancer.

Once airborne, by drifting as an invisible gas or clinging to particles of dust, mercury begins to wander. Last April, an instrument-laden U.S. surveillance aircraft near the California-Oregon border hit a plume of dirty air inbound from China . Among the pollutants: black carbon, sulfur dioxide and mercury. “Storms didn’t wash it away,” marvels Veerabhadran Ramanathan of the Scripps Institution of Oceanography in La Jolla, Calif.

Dr. Ramanathan, who helped pioneer the field of tracking international air pollution, says such plumes shed some of the noxious load over the ocean. But their bulk continues to drift across the U.S. at the leisurely speed of a blimp, polluting lakes and rivers as it goes.

The density of Chinese pollution has amazed researchers. Hans Friedli, a chemist at the National Center for Atmospheric Research in Boulder, Colo., recalls flying through plumes off the Chinese coast near Shanghai two years ago that contained pollutants in the “highest concentration that I have ever seen from an aircraft, except when I’ve flown into forest fires.”

And it is going to get worse. By 2020, China will have nearly 1,000 gigawatts of total electricity-generating capacity, more than twice the current amount, according to the State Power Economic Research Center. The majority of new plants will burn coal. Coal-fired plants today produce three-quarters of the country’s electricity, compared with around 50% in the U.S. China will this year burn about 1.9 billion tons of coal, a 12% increase from last year, and consumption is expected to keep rising.

China is phasing in several measures to tackle air pollution. But soot plus sulfur dioxide and nitrogen oxides — often referred to as “SOx and NOx” — are understandably taking priority over mercury. Even with the existence of poisoned villages like Ms. Zhang’s, other pollutants affect even more Chinese people. Airborne particulates are a suspected leading cause of respiratory disease around the country. Acid rain from sulfur dioxide now pelts a third of China’s territory, a ratio that is “expanding, not shrinking,” says Pan Yue, the deputy director of China’s State Environmental Protection Administration, or SEPA.

Mr. Pan, an outspoken champion of stricter environmental standards, says there currently aren’t any rules being drafted to address mercury. Asked if he is aware of recent studies linking Chinese emissions to mercury in American lakes and rivers, he nods.

“As for China’s impact on surrounding countries, I’m first to admit the problem. But let’s talk about this in the context of international fairness,” he says, before firing rhetorical questions aimed at Washington: “Whose development model are we emulating? Who has been shifting all of its pollution-heavy factories to China ? … And who bears an even greater international responsibility than China — but has yet to shoulder it — on matters like greenhouse-gas emissions?”

Environmentalists say U.S. action to control its own mercury emissions from power plants has been sluggish. James Connaughton, head of the White House Council on Environmental Quality, counters that the Bush administration has promised by next March to announce regulations aimed specifically at restricting mercury emissions from coal plants, which he calls a “world first.” The plan, which follows years of delays and lawsuits, is expected to include market-based trading of pollution credits among utilities and won’t be implemented fully until 2018. Other technologies, such as flue gas desulfurisation, that remove some mercury while scrubbing other pollutants from coal have helped cut mercury emissions in Europe and North America.

Weak Incentive

On the face of it, China’s new rules on sulfur dioxide should help combat emissions of mercury, too. Beijing is requiring many power plants approved after 1995 to install equipment that reduces sulfur dioxide, and such equipment often has a bonus effect of filtering out some mercury. China this summer also increased the fees that power plants must pay for each ton of sulfur dioxide they emit, hoping the change will give all coal-fired power plants an incentive to buy such equipment.

But the reality is that sheer increases in Chinese coal consumption, together with difficulty policing polluters, will more than offset whatever reductions in sulfur dioxide and mercury are achieved by the rules, experts say. For China , the economics of coal remain irresistible.

It’s cheaper, and “with current global reserves, it probably wouldn’t be a stretch to keep using coal another 200 years,” says Fan Weitang, president of the China National Coal Association. Sitting in his Beijing headquarters at Coal Tower, a sleek new 22-story building, Mr. Fan is caught off guard by questions about mercury pollution. “It is hard for me to discuss that in depth,” he says. Other pollutants like airborne particulates, and SOx and NOx, receive more attention, and “won’t be much of a problem” in the near future, he promises.

That view isn’t shared by Chinese scientists. ” ‘No problem’? Big problem,” says Tang Dagang, head of atmospheric research at the Academy of Environmental Sciences, which is funded in part by SEPA. By the end of last year, only 5% of the installed capacity of coal-fired plants in China had technology to reduce sulfur dioxide, according to official statistics. While new rules will require the retrofitting of many plants with such technology, Mr. Tang says older plants that account for half of existing power-making capacity are exempt.

What’s more, there is little economic incentive for power plants like Wuhu Shaoda, the company partly owned by AES, to further clean up its act.

Next year, Wuhu Shaoda will pay an estimated fee of $400,000 for the several thousand tons it is expected to emit of sulfur dioxide alone, according to an official with knowledge of the plant’s emissions. That’s much less than the $14.5 million engineers at the plant say it would cost to buy sulfur-dioxide-removal equipment.

—- Cui Rong contributed to this article

Write to Matt Pottinger at matt.pottinger@wsj.com, Steve Stecklow at steve.stecklow@wsj.com and John J. Fialka at john.fialka@wsj.com

“Recently a student at my university murdered his roomates and hid them in
the dormitory. He then fled, there was a manhunt and he was eventually
apprehended. Anyway it was big news all over China and especially here in
Kunming. This is one of the more interesting articles I’ve read about it
because it highlights the changes China is going through. Before 1 billion
people were living very similiarly, all with very little or nothing. Now
there are huge divides, anyway read on….

Student cracks, exposing anger of poor Chinese

BY TIM JOHNSON
FREE PRESS FOREIGN CORRESPONDENT

KUNMING, China — What seemed to be a routine crime story — university
student buys a sledgehammer and kills four classmates — has sparked a
national discussion in China on the potentially explosive gap between the
rich and the poor.

The story of Ma Jiajue, a young man from a poor, rural family who was
convicted and sentenced to death last month, exposed the stresses of China’s
drive toward modernity. Ma’s actions seemed to sprout not only from personal
demons but also from anger over a yawning gap between rich urbanites and
poor rural dwellers in a communist country where, in theory, no one should
be either rich or poor.

The debate over Ma’s case grew so intense that authorities limited news
coverage to a handful of government media, and Communist Party leaders have
warned that the anger of rural poor people could boil over into crime and
antigovernment unrest.

“It’s very sensitive. It’s a very real case,” said Pi Yijun, an expert on

delinquency at the University of Political Science and Law in Beijing. “He
was a very promising student about to graduate.”

By most standards, Ma, 24, was a model of the steadfastness and aptitude
that could bring a humble man to Yunnan University, the largest college in
the southwestern province. He was majoring in biochemistry.

Ma’s parents earned about $60 a month ironing clothes for a laundry in a
village in the neighboring Guangxi Zhuang autonomous region. They counted on
him to get a good job and pull the family out of poverty.

Along the campus’ shady walkways, few students hold Ma solely to blame for
the murders, saying circumstances pushed him to brutality….”

I don’t want to go on with the article(see continue reading for full article) because the basic point has been made. There are a couple of misnomers that I’m going to pick at, but the idea that really bothers me is that the finger seems to be pointed at growth and China’s increasing links to the globalized markets are too blame.

First of all, China is not a country where there should be neither rich or poor as the author suggests. Since the very agressive steps in the early seventies toward trade liberalization, the notion of a communist equality has been more of a nod towards Mao and the history of the cultural revelution. Granted it wasn’t until the 90′s before business men were let into the Communist Party, but there hasn’t been a single economic class for quite some time.

Second, without seeming incensitive to Ma’s social barriers, the question the author is really begging to ask is whether this growth enhances or diminishes China’s overall poverty. So_ although no one denies the coast has seen their livlihoods increase significantly in the past decade (if in doubt just look at the rise in auto fatalities for a grim reminder) has this helped the North, or West?

The basic scientific argument is a two step, where trade enhances growth and growth reduces poverty. Outward-orientered economies (such as China) where labor-intensive goods are exported decrease unemployment and reduce poverty at a fairly brisk rate. However China being the size it is, this dispersion takes time, with the most notable changes around the point of export (the coast). Paul Samuelson laid this out clearly, that one CAN specialize and do better.

A brief intro to development economics will teach you the first ideas were to allow the poor to access growing incomes by making it easier for them to borrow and invest. But, and China is rife with these, it also lead to alot of bad debts which cause banks not to want to lend. By recognizing the poor have access to large amts. of collateral, in the form of land or other ownership, it allows them to gain a significant bargaining power to help in improving their lives. China has made steps to recognizing property rights late last year, and this is very important and should be encouraged.

***************** UPDATE***************************

Front page of the WSJ 6/9/2004

New Crop of Protestors in Tienamen Square: Restive Homeowners

“… Defying government restrictions on demonstrations, the new homeowners piled into their cars and drove noisely[honking horns] through Tiananmen Square to confront Chinese government officials. ‘ I’d never done anything like that before, ‘ said Ms Liu. ‘Owning an apartment changed me. I bought it. I must protect it.’…”

Property rights are powerful indeed.

Student cracks, exposing anger of poor Chinese

BY TIM JOHNSON
FREE PRESS FOREIGN CORRESPONDENT

KUNMING, China — What seemed to be a routine crime story — university
student buys a sledgehammer and kills four classmates — has sparked a
national discussion in China on the potentially explosive gap between the
rich and the poor.

The story of Ma Jiajue, a young man from a poor, rural family who was
convicted and sentenced to death last month, exposed the stresses of China’s
drive toward modernity. Ma’s actions seemed to sprout not only from personal
demons but also from anger over a yawning gap between rich urbanites and
poor rural dwellers in a communist country where, in theory, no one should
be either rich or poor.

The debate over Ma’s case grew so intense that authorities limited news
coverage to a handful of government media, and Communist Party leaders have
warned that the anger of rural poor people could boil over into crime and
antigovernment unrest.

“It’s very sensitive. It’s a very real case,” said Pi Yijun, an expert on
delinquency at the University of Political Science and Law in Beijing. “He
was a very promising student about to graduate.”

By most standards, Ma, 24, was a model of the steadfastness and aptitude
that could bring a humble man to Yunnan University, the largest college in
the southwestern province. He was majoring in biochemistry.

Ma’s parents earned about $60 a month ironing clothes for a laundry in a
village in the neighboring Guangxi Zhuang autonomous region. They counted on
him to get a good job and pull the family out of poverty.

Along the campus’ shady walkways, few students hold Ma solely to blame for
the murders, saying circumstances pushed him to brutality.

“I kind of sympathize with him. He’s from a very poor peasant family,” said
Zhang Weiwei, 23, a senior majoring in political science. “It’s a
complicated case. Society, the educational system, this university are all
responsible.”

Feng Xi, a 19-year-old geology student, added: “People say that his
situation is understandable. He could not tolerate the ridicule of his
fellow students. He cracked.”

Daily life on campus brought Ma constant reminders of his poverty.

For example, he didn’t have enough money to buy the kind of plastic slippers
that students use when they go to communal bathrooms, said Pi, who has
examined the case in depth.

“Because of a lack of money, he couldn’t socialize with other students” by
going to the movies, for example.

According to various accounts, the breaking point came Feb. 12, during a
card game in a dormitory. Most students had left Kunming for the Chinese New
Year, a time when most Chinese return home for family gatherings. Ma
couldn’t afford a train ticket home.

During the card game, one of Ma’s friends, Shao Ruijie, accused him of
cheating and derided him as a social misfit.

“He was doubly humiliated,” Pi said.

The next day, Ma bought a small sledgehammer, plastic bags and tape. He
invited a student, Tang Xueli, back to his dorm room.

“It is very late at night. Tang is still reading newspapers. I strike hard
with the hammer at the back of his head. He fell down, blood gushing out,” a
police report quoted Ma as saying, according to China News Weekly magazine,
which published its report before the government restricted news on the
case.

Ma put Tang’s body in a closet. On Valentine’s Day, he invited two other
friends to his room and killed them. On Feb. 15, Ma killed his best friend,
Gong Bo. The bodies were found Feb. 23 amid an intense search for the
missing students.

Ma fled to China’s Hainan Island, where he was caught March 15, sitting on
the beach. On April 24, a court in Kunming sentenced him to death.

Many students said university pressures are partly to blame for the
killings.

Only students with the highest test scores can enter China’s universities,
and campuses are often rife with tension.

Campus ribbing and ridicule are common to let off steam.

“I used to study in Shanghai. I was made fun of,” said Liu Yan, 36, an
instructor at the university’s School of Foreign Languages. “I told them I
was from Yunnan. They asked me if I rode on an elephant. It hurt my
feelings.”

The gap between rich, poor

A recent study by the Chinese Academy of Social Sciences found that the
disparity between the urban rich and rural poor in China is among the most
pronounced in the world.

Two decades of economic reform have created opportunities for city dwellers.
But rural residents, who number nearly 900 million, earn only about
one-fifth or one-sixth of what urban residents make. They generally don’t
have health insurance and other benefits that city people do.

The government’s decision to censor most news stories about Ma’s crimes is a
sign that officials worry about the potential explosiveness of the wealth
gap. Beijing authorities recently went so far as to ban most police and
detective shows, fearing viewers would get ideas about how to commit crimes.

Some of those chatting about Ma’s case on the Internet said they see little
to distinguish his plight from that of many other poor Chinese.

“The only difference is that the majority of them have not yet been driven .
. . to commit crimes,” one anonymous poster to people.net wrote before the
government quashed debate on the subject.

“China’s Communist party on Monday formally called for protection of private property to be written into the country’s constitution along with references to the political theory of former president Jiang Zemin.”