Cities in today’s China are growing rapidly, and half of all new construction in the world occurs there. Between 2003 and 2008 alone, construction expenditures rose from $267 billion to $406 billion (Fernandez 2008). This week, Wumeng and I discussed urbanization in China and its implications for the environment. Here I’ll talk about how China’s construction and household consumption effect its environment and economy.
Construction and resource consumption.
Construction is one of the most important sectors driving China's growth. Of all the resources China uses in construction, concrete may have the largest environmental impact. Concrete is very energy intensive to produce and accounts for 3 to 8% of global carbon emissions. China uses concrete extensively in construction, representing half of global demand. Demand continues to grow, and Fernandez et al. estimate that China will have to import 30% of it concrete to keep pace. Because of concrete alone, construction represents a large contribution to climate change. In addition, many of China’s new buildings do not meet energy efficiency standards and are wasteful in their electricity use.
In this discussion, Professor Karp raised the idea of the Kuznets Curve, a model that describes the relationship between income per capita and investment in environmental protection. China is clearly in the heat of development, and its environmental impact from resource consumption will continue to rise for some time. According to Fernandez et al., cities tend to transition from resource-heavy consumption to electricity-heavy consumption, indicating that China’s demand for resources and energy will continue to rise for years to come. With climate change gaining momentum, it would be wise for China to consider how it can make the construction process and all new buildings more energy efficient. However, construction is happening so fast that its not clear how much control the Chinese government has over this process.
A Chinese consumer economy? After doing some research and speaking with Wumeng, I have a much better understanding of China’s economic position and why we’re pressuring China to consume more. China’s economic growth is heavily fueled by its exports and construction industry, and its undervalued currency makes these goods artificially cheap. This lowers the purchasing power of Chinese citizens, and has created a large economic imbalance within China. It also has augmented the trade deficit with the US, EU, and other nations. This economic strategy has allowed China to grow at unprecedented rates of ~10% per year and has effectively subsidized its internal construction and urban growth. As a result there has been widespread speculation in construction, in some cases leading to unpopulated ghost cities.
China and its foreign partners recognize that it is time for China to shift away from this model and that increased domestic consumption is a necessary step to rebalancing the economy. However, higher consumption has obvious implications for China’s environmental impact, which is already increasing due to higher household consumption. As China’s citizens get richer, how much will they consume? Will household consumption reach US levels? Given that China’s citizens consume so little on average compared to Americans, its unlikely that individuals will consume as much as we do in the foreseeable future. However, it is important that China considers the tremendous global environmental impact that its citizens will have if their consumption levels approach ours.
One important question this class raised is, how much control does China’s government have over its development? The Chinese government holds significant sway over its economy, but as the 2008 financial crisis showed, the world may have less economic control than we think. In a sense it seems that China’s economy has developed a life and momentum of its own, and everyone including the Chinese government is waiting to see where it will end up. This approach has very problematic implications for the environment; as long as China allows development to run unchecked, it will have very limited control over its environmental problems and carbon emissions.
Citation: Fernandez, John E. "Resource Consumption of New Urban Construction in China". Journal of Industrial Ecology, 2007. 11: 99-114.
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