In China, a Lake’s Champion Imperils Himself (NYTimes, 10/14/07)

October 14, 2007
In China, a Lake’s Champion Imperils Himself
By JOSEPH KAHN
ZHOUTIE, China — Lake Tai, the center of China’s ancient “land of fish and rice,” succumbed this year to floods of industrial and agricultural waste.
Toxic cyanobacteria, commonly referred to as pond scum, turned the big lake fluorescent green. The stench of decay choked anyone who came within a mile of its shores. At least two million people who live amid the canals, rice paddies and chemical plants around the lake had to stop drinking or cooking with their main source of water.
The outbreak confirmed the claims of a crusading peasant, Wu Lihong, who protested for more than a decade that the region’s thriving chemical industry, and its powerful friends in the local government, were destroying one of China’s ecological treasures.
Mr. Wu, however, bore silent witness. Shortly before the algae crisis erupted in May, the authorities here in his hometown arrested him. In mid-August, with a fetid smell still wafting off the lake, a local court sentenced him to three years on an alchemy of charges that smacked of official retribution.
Pollution has reached epidemic proportions in China, in part because the ruling Communist Party still treats environmental advocates as bigger threats than the degradation of air, water and soil that prompts them to speak out.
Senior officials have tried to address environmental woes mostly through pulling the traditional levers of China’s authoritarian system: issuing command quotas on energy efficiency and emissions reduction; punishing corrupt officials who shield polluters; planting billions of trees across the country to hold back deserts and absorb carbon dioxide.
But they do not dare to unleash individuals who want to make China cleaner. Grass-roots environmentalists arguably do more to expose abuses than any edict emanating from Beijing. But they face a political climate that varies from lukewarm tolerance to icy suppression.
Fixing the environment is, in other words, a political problem. Central party officials say they need people to report polluters and hold local governments to account. They granted legal status to private citizens’ groups in 1994 and have allowed environmentalism to emerge as an incipient social force.
But local officials in China get ahead mainly by generating high rates of economic growth and ensuring social order. They have wide latitude to achieve those goals, including nearly complete control over the police and the courts in their domains. They have little enthusiasm for environmentalists who appeal over their heads to higher-ups in the capital.
Mr. Wu, a jaunty, 40-year-old former factory salesman, pioneered a style of intrepid, media-savvy environmental work that made Lake Tai, and the hundreds of chemical factories on its shores, the focus of intense regulatory scrutiny.
In 2005 he was declared an “Environmental Warrior” by the National People’s Congress. His address book contained cellphone numbers for officials in Beijing and the provincial capital of Nanjing who outranked the party bosses where he lived.
But Mr. Wu was far from untouchable. He lost his job. His wife lost hers. The police summoned, detained and interrogated him. The local government and factory owners also tried for years to bring him into the fold with contracts, gifts and jobs. When party officials offered him a chance to profit handsomely from a pollution cleanup contract, a friend warned him not to accept. Mr. Wu, who needed the money, said yes.
Lake of Plenty
The country’s third largest freshwater body, Lake Tai, or Taihu in Chinese, has long provided the people of the lower Yangtze River Delta with both their wealth and their conception of natural beauty.
It nurtured a bounty of the “three whites,” white shrimp, whitebait and whitefish, and a freshwater crustacean delicacy called the hairy crab. Natural and man-made streams irrigated rice paddies, and a network of canals ferried that produce far and wide.
Along the lake’s northern reaches, near the city of Wuxi, placid waters and misty hills captured the imagination of Chinese for hundreds of years. The wealthy built gardens that featured the lake’s wrinkled, water-scarred limestone rocks set in groves of bamboo and chrysanthemum.
Since the 1950s, however, Lake Tai has been under assault. The authorities constructed dams and weirs to improve irrigation and control floods, disrupting the cleansing circulation of fresh water. Phosphates and other pollution-borne nutrients made the lake eutrophic, sucking out oxygen that fish need to survive.
Even in its degraded state, Lake Tai made an ideal habitat for China’s chemical industry, which expanded prolifically in the 1980s. Chemical factories consume and discharge large quantities of water, which the lake provided and absorbed. Its canals made it easy to ship goods to the big industrial port city of Shanghai, downstream.
With strong local government support, the northern arc of Lake Tai became home to 2,800 chemical plants, most of them small cinder-block factories that took over rice paddies beside canals.
Mr. Wu’s hometown alone had 300 such plants. His narrow village road was reinforced with concrete to withstand the weight of cargo trucks. Factories here made food additives, solvents and adhesives.
The industry transformed the economy. By the mid-1990s, taxes on chemical industry profits accounted for four-fifths of local government revenue, according to a report from the city of Yixing, which oversees Zhoutie.
Mr. Wu benefited as well. In his early 20s, he got a salaried job as salesman for a factory that made soundproofing material. It allowed him to travel around the country, and paid nice commissions on his sales. His wife, Xu Jiehua, made dyes.
Mr. Wu took long walks after dinner. The acrid tinge in the cool night air was the smell of prosperity to some locals. But it nauseated him, Mr. Wu recalled in later interviews.
In streams where he and Ms. Xu played as children, teeming whitefish used to tickle their legs. By the early 1990s, there were no fish in the streams, which ran black and red. “Rivers of blood,” Ms. Xu quoted him as saying.
Mr. Wu is small and pudgy. Ms. Xu calls him “little fatty.” He also has a short temper, and pollution sparked it.
“In the beginning I didn’t understand it myself,” he recalled years later in an interview with Farmers’ Daily. “It was my personality that decided all of this. I felt the burden getting bigger.”
He began by snapping photos of factories dumping untreated effluent into canals. He mailed them, anonymously at first, to environmental protection agencies.
When that produced few results, he signed the letters and included his phone number, volunteering to help inspectors see the problem for themselves.
Local regulators ignored him. But fish kills, declining rice yields and slumping tourism to the once pristine area made Lake Tai’s ecology a broader concern. Higher-ranking officials in Nanjing, capital of Jiangsu Province, got in touch.
One evening, Mr. Wu brought provincial inspectors to see concealed pipes running from a factory near his home to a stream that flowed into the lake. The factory, Feida Chemical, got slapped with a fine, and Mr. Wu got his start.
Friends and Enemies
Mr. Wu’s farmhouse filled up with the evidence he amassed, a bit haphazardly, of a looming environmental disaster. He used his pantry to store plastic bottles containing muddy water samples from streams and canals. Near his queen-size bed he kept stacks of newspaper clippings and photographs, letters and petitions.
One letter from local farmers described how a nearby factory making 8-hydroxyquinoline, used as a deodorant and antiseptic, emitted noxious fumes that “make our days and nights impassable.” Another writer referred to a local factory as “a new Unit 731,” after the Japanese team that conducted chemical warfare experiments in World War II. Members of another group said they did not dare tend their rice paddies without wearing gloves and galoshes because irrigation water caused their skin to peel off.
Mr. Wu answered many such calls for help. Between 1998 and 2006, the environmental protection agency of Jiangsu Province recorded receiving 200 reports of pollution incidents and regulatory violations from Mr. Wu.
Many of those he helped became allies. But Mr. Wu was making as many enemies as friends.
“Our society lacks the right atmosphere for environmental protection,” he told one local newspaper. “Even in areas where pollution is most severe, I still have a hard time winning people’s support.”
Some residents feared for their jobs, with good reason. The soundproofing factory fired Mr. Wu in 1999. His notice of dismissal, which he saved among his other papers, cited his failure to attend a meeting.
His family lived off his wife’s salary at the dye factory for a time. Then one day Ms. Xu mentioned to Mr. Wu how the stream near her factory changed colors depending on which dye they made that day. Mr. Wu brought a television crew to film the rainbow-colored stream. Ms. Xu soon lost her job as well.
“He did not always have our family’s happiness at heart,” Ms. Xu recalled. “He probably should have investigated someone else’s factory.”
Such pressure, though, made him confront local authorities more directly.
In 2001, Wen Jiabao, then a vice premier, now China’s prime minister, came to investigate reports of Lake Tai’s deterioration. Like most Communist Party inspection tours, word of this one reached local officials in advance. When Mr. Wen asked to see a typical dye plant, one was made ready, according to several people who witnessed the preparations.
The factory got a fresh coat of paint. The canal that ran beside it was drained, dredged and refilled with fresh water. Shortly before Mr. Wen’s motorcade arrived, workers dumped thousands of carp into the canal. Farmers were positioned along the banks holding fishing rods.
Mr. Wen spent 20 minutes there. A picture of him shaking hands with the factory boss hangs in its lobby.
Mr. Wu fired off an angry letter to Beijing recounting the ruse and warning the vice premier that he had been “deceived.” Mr. Wu circulated copies among his friends. Local officials saw it, too. Several villagers said they were warned then that they should keep a distance from Mr. Wu.
Words From Above
One summer afternoon in 2002, Mr. Wu went out on an errand and saw a banner stretched across the main road downtown. It read: “Warmly welcome the police to arrest Wu Lihong for committing blackmail in the name of environmentalism.”
Mr. Wu told friends he initially suspected that the banner was hung by local factory bosses to intimidate him. But when he went to the police to complain, he found a stack of placards with the same exhortation in the police station. The police had erected the banner themselves, and they detained him on the spot.
His family received a detention notice accusing Mr. Wu of inciting farmers to stage a public protest about pollution a few weeks earlier. The notice did not mention blackmail, as the banner had, and the police never pressed charges. He was released within two weeks.
That episode appeared to be part of an inconsistent, somewhat bumbling effort to keep Mr. Wu boxed up and harmless.
There were carrots as well as sticks. Zhang Aiguo, the chief environmental regulator in the city of Yixing, struck up a dialogue with Mr. Wu, several friends said.
Hang Yaobin, a truck driver and sundry shop owner in Zhoutie who has also pressed for better environmental controls, said Mr. Zhang told Mr. Wu that they could improve the environment together. But Mr. Wu should expose problems in other jurisdictions and should stop damaging Yixing’s reputation.
“Zhang Aiguo told him: ‘Don’t make me stink, or I’ll lose my job. Then we’ll accomplish nothing,’” Mr. Hang said.
In a telephone interview, Mr. Zhang declined to discuss his dealings with Mr. Wu in detail. But he acknowledged that the two talked regularly before he was assigned to another position in the Yixing government.
In 2003, Mr. Zhang offered Mr. Wu a business opportunity. A steel plant in Zhoutie had been ordered by environmental authorities to buy new dust-control equipment. Mr. Wu could find a vendor for the equipment and earn a handsome commission, several people told about the arrangement said.
Mr. Zhang confirmed that he told Mr. Wu of the opportunity.
Mr. Wu debated whether to accept. Mr. Hang said he advised his friend against it. “If you’re engaged in a confrontation with officials you can’t gamble, or visit prostitutes, or have any other vice,” Mr. Han said. “They are always looking for ways to get you.”
But this contract involved an environmental cleanup. And with both Mr. Wu and his wife out of work, they needed money. Mr. Wu agreed to contact a vendor recommended by Mr. Zhang.
It was not a rewarding endeavor. He brokered a contract. But the dust-control company gave him only a token advance on his promised commission. The steel plant boss, who had befriended Mr. Wu, eventually withheld part of what he owed the dust-control company to compensate Mr. Wu, according to Ms. Xu, his wife.
That was one of several muddled interactions with local officials and businessmen that did not satisfy either side. Mr. Wu remained cash-strapped. He did not stop contacting Nanjing and Beijing about pollution problems.
In 2005, he heard that the local government would be the host of a big delegation of Chinese reporters as part of the China Environmental Century Tour. He got in touch with China Central Television, the leading national broadcaster, and promised to reveal the story behind the story.
He arranged covertly for the reporters to inspect a section of the Caoqiao River that he learned the government planned to show them on the coming tour. He revealed hidden pipes that discharged black effluent from local factories into the river, which flows into Lake Tai.
The China Central Television crew later joined the Potemkin official tour. They aired a special report on “the river that goes from black to clear overnight.”
Mr. Wu was the star of that report, an environmental celebrity. Later the same year, the National People’s Congress, China’s party-run Parliament, declared him an “Environmental Warrior.”
Model City
With President Hu Jintao and Mr. Wen demanding tougher action on pollution, local officials in 2006 came under new pressure to clean up Lake Tai. Despite repeated pledges and campaigns to protect the once scenic lake, it was still rated Grade V by the State Environmental Protection Administration, the lowest level on its scale.
Yixing ordered a new crackdown on small chemical factories. It claimed to have reduced the total number by half from the peak of 2,800 in the late 1990s. The city said the industry, which once accounted for as much as 85 percent of the area’s industrial output, constituted just 40 percent in 2006.
But local officials put at least as much emphasis on fighting the perception that they had a pollution problem. They lobbied heavily for the State Environmental Protection Administration to declare it a “Model City for Environmental Protection.”
Around the same time, Wu Xijun, the Communist Party boss of Zhoutie, called Mr. Wu to his office. The two Mr. Wus, who are not related, had a “face-to-face talk” about the damage Wu Lihong’s environmental protests were doing to the area’s reputation. The party secretary then made him an offer, according to friends of Mr. Wu and an official court document that confirmed the meeting.
In March 2006, the township party committee paid Mr. Wu to promote tourism on the condition that he stop “nonfactual reporting” of pollution problems. The payments totaled about $5,000, the court document confirmed.
Mr. Wu may have toned down his protests for a time, friends said. But early this year, he learned that Yixing had won the environmental administration’s designation as a “Model City for Environmental Protection.” Enraged, he began his most assertive effort to date to embarrass local officials.
He spent weeks traveling throughout the area on his motorcycle, collecting water samples and photographing rivers and canals. He gathered data he hoped could prove that factories released most of their polluted water at night in quantities that the currents could wash away by dawn.
In April, he prepared to bring the water samples and photographic evidence to Beijing. He told friends he intended to file a lawsuit there against SEPA, the environmental administration, for its decision to honor Yixing. He never made the trip.
On the night of April 13, several dozen police and state security officers raided his farmhouse. Climbing ladders, they pried open the windows to his second-floor bedroom, arresting him and seizing documents and a computer.
Prosecutors quickly indicted Mr. Wu on two charges of blackmail. The first charge claimed that after he “gained knowledge” of a contract between the steel company and the dust-control company in 2003, he threatened to use his connections to undermine it unless the dust-control company paid him to keep quiet.
The second charge claimed that Mr. Wu extorted money from the Communist Party Committee of Zhoutie by threatening to report pollution problems.
Prosecutors revised the indictment twice in the following weeks. They dropped the charge of blackmailing the Communist Party, offering no explanation. Then they added a new charge, this one for “fraud.” It claimed that Mr. Wu had illegally aided the steel company boss in preparing false documentation to account for the money the steel company paid Mr. Wu in 2003.
The three indictments each claimed that Mr. Wu confessed to the various charges. The last week of May, with Mr. Wu in custody, Lake Tai cried for help. Nitrogen and phosphorous, the untreated residue of chemical processing, fertilizer, and sewage, built up to record levels, while rainfall fell short.
Lake Tai’s Revenge
Lake Tai had algal blooms before. This time, according to an analysis by the State Environmental Protection Administration, cyanobacteria “exploded” at rates that had not been seen in the past. Much of the lake was covered with a deep, foul-smelling canopy that left most of the 2.3 million people in Wuxi, the biggest city on the northern part of the lake, without drinking water for many days.
Local officials initially called the outbreak a “natural disaster.” But state media rushed to the scene, and some showed pictures of chemical factories dumping waste into the lake even as residents formed long lines at supermarkets to buy bottled water.
Neighboring cities shut sluice gates and canal locks to prevent contamination, creating a monumental maritime traffic jam and further reducing circulation around Lake Tai. The problem did not ease until central authorities ordered Yangtze River water diverted into the lake. Even then, the bloom lingered into late summer.
Mr. Wen convened a meeting of the State Council to discuss the matter. “The pollution of Lake Tai has sounded the alarm for us,” state media quoted him as saying. “The problem has never been tackled at its root.”
Five party and government officials in Yixing and Zhoutie, including three involved in environmental work, were dismissed or demoted. Li Yuanchao, the party boss of Jiangsu Province, vowed to clean up Lake Tai even if it meant taking a 15 percent cut to the province’s economic output. Authorities pledged to shut down hundreds of the most egregious polluters in their most sweeping crackdown to date.
Ms. Xu, Mr. Wu’s wife, said she hoped the authorities would conclude that it would be improper, or at least inconvenient, to prosecute Mr. Wu under such conditions. His trial, initially scheduled for June, was delayed, prompting speculation that someone at a higher level had intervened.
But although Mr. Wu’s arrest generated attention in both the domestic and international media, there is no indication that central government officials objected to his prosecution. On a Friday afternoon in August, the road in front of Yixing’s courthouse filled with Volkswagen Santanas, the standard-issue sedans of China’s police and security services. In a park nearby, officials hung a banner advertising the city’s new status as a “Model City for Environmental Protection.”
The evidence against Mr. Wu consisted mainly of written testimony and his own confession. The judges rejected a request by Mr. Wu’s lawyer to summon prosecution witnesses for cross-examination.
Mr. Wu told the judges in open court that the police had deprived him of food and forced him to stay awake for five days and five nights in succession, relenting only when he signed a written confession. He said that the confession was coerced and that he was innocent. The judges ruled that since Mr. Wu could not prove that he had been tortured, his confession remained valid.
Mr. Wu lost his temper. “Since I was a child I have never broken the law,” he shouted, according to relatives who attended. “If I could right now, I would like to split you in two.” He was sentenced to three years.
Shortly after the trial, Mr. Hang, the sundry shop owner and colleague of Mr. Wu, handed a reporter photos, clippings and documents collected over a decade of environmental work. He said he had no use for them now. Environmental work had become too risky.
He said he had recently seen some little fish darting around in the milky green water of a canal nearby. He took it as a good sign. “Once the white shrimp come back, that would be good,” he said. The white shrimp had not come back just yet.
Jake Hooker contributed reporting from Beijing and Zhoutie.

New China Hierarchy May Limit President’s Power (NYTimes, 10/13/07)

October 13, 2007
New China Hierarchy May Limit President’s Power
By JOSEPH KAHN
BEIJING, Oct. 12 — After intensive bargaining, China’s Communist Party has approved a new leadership lineup that denies President Hu Jintao the decisive consolidation of power that his supporters hoped would allow him to govern more assertively in his final five-year term as China’s top leader.
The party’s Central Committee agreed to elevate four senior officials to the ruling Politburo Standing Committee, but only one of them, Li Keqiang, the party secretary of Liaoning Province, clearly owed his rise in the hierarchy to Mr. Hu’s patronage, people told about the results of a Central Committee meeting said Friday.
Xi Jinping, the party boss of Shanghai, is also expected to join the Standing Committee. He would outrank Mr. Li and become the most likely successor to Mr. Hu as party chief, head of state and top military official in 2012, the people said.
Mr. Xi, whose father was a senior party official under Mao, is viewed as a compromise choice, acceptable to Mr. Hu but also to his now-retired predecessor as top leader, Jiang Zemin, who party officials say exercised broad sway over the reshuffling. Mr. Xi moved to Shanghai from Zhejiang Province just six months ago to replace the now disgraced Chen Liangyu, who was ousted in China’s biggest corruption scandal of the past decade.
Two other new members of the Standing Committee, He Guoqiang, a party organization official, and Zhou Yongkang, China’s top law enforcement officer, are widely viewed as close allies of China’s vice president, Zeng Qinghong, who will step down from the Standing Committee.
Personnel shifts in the ruling party are decided in secret, and the final leadership lineup will not be made public until the conclusion of a party congress, which convenes Monday. In the past, top leaders have continued to bargain and make changes in the hierarchy even after the Central Committee approved a slate of candidates.
The Central Committee issued a public statement on Friday that offered no information about personnel decisions but praised Mr. Hu lavishly.
Under Mr. Hu, the party “vanquished all kinds of hardship and dangers and advanced the work of the party and government to achieve major new successes,” the statement said. Among these successes, it continued, were raising living standards, improving defense forces and managing relations with Taiwan, the self-governing island that China claims as its territory.
The committee also said the party would amend its Constitution. That suggests that Mr. Hu’s concept of “scientific development,” a catch phrase for his policies to promote more balanced, equitable and sustainable development, will be enshrined in the Constitution alongside the political slogans of Mao, Deng Xiaoping and Mr. Jiang.
Even so, the coming party congress seems likely to underscore the collective nature of decision making in the ruling party, as well as Mr. Hu’s clout.
Mr. Hu will still have to work to build a consensus among the nine members of the Standing Committee, a majority of whom owe their rise more to the support of Mr. Jiang or Mr. Zeng than to Mr. Hu. Party members said Mr. Hu had hoped to reduce membership in the standing committee to seven from nine, and to elevate more members of his political base, the Communist Youth League, to the top body.
“If the current name list becomes the final one, it is a poor outcome for Hu,” said one party member who was told about the Central Committee’s deliberations. “It is a victory for collective leadership.”
Mr. Hu has earned plaudits for paying increased attention to the country’s growing wealth gap and the environmental costs of its long streak of rapid economic growth. He has strengthened relations with the United States, focused heavy diplomatic attention on Africa, and helped steer North Korea toward a pact to end its nuclear weapons program.
Yet he has also kept a tight rein on news media and done little to improve China’s domestic human rights record or legal system. He has taken few significant steps to overhaul the one-party system or allow more political pluralism.
Some supporters of Mr. Hu, who is 64 years old, have speculated that he might push political change in his second term, particularly if he eclipses the influence of Mr. Jiang, 80, and assumes more decision-making power.
Mr. Hu does appear to have succeeded in promoting many Communist Youth League officials to top provincial posts. The Central Committee also elevated two officials close to him, Li Yuanchao, the party boss of Jiangsu Province, and Liu Yuandong, who supervises the party’s relations with other political entities, to important new positions that carry regular Politburo rank, people told about the committee’s deliberations said.
But after years of careful cultivation, Mr. Hu did not succeed in positioning Li Keqiang, 52, the Liaoning party boss, as his successor, party officials said. Instead, Mr. Li will probably assume the position of prime minister, now held by Wen Jiabao, when Mr. Hu and Mr. Wen retire in five years.
Mr. Xi, 54, is expected to succeed Mr. Zeng as vice president and as the day-to-day manager of Communist Party affairs at this congress as the first step toward succeeding Mr. Hu as No. 1 leader when the next congress convenes in 2012. Just as Mr. Hu owed his designation in 1992 as the party’s future leader to Mr. Deng rather than to Mr. Jiang, who was party chief at the time, Mr. Xi’s rise came mainly at the behest of Mr. Jiang and Mr. Zeng, the people told about the deliberations said.
Mr. Xi is not likely to be identified publicly as Mr. Hu’s successor. The semiofficial China News Service said Thursday in a report that Mr. Hu would not follow Mao’s or Mr. Deng’s lead in picking a successor, but would rely on “collective discussion and collective decisions” within the party.
Some political observers have suggested that by having two younger members of the Standing Committee, the choice of a future leader could become competitive, permitting the 190 members and the 152 alternate members of the Central Committee to choose among candidates rather than ratifying decisions made at the very top.
But party officials said Friday that the party leadership had decided the matter. The discussion about a race for the top jobs was an attempt to make the party’s internal deliberations seem more open than they really are, they said. “Xi will be the general secretary and Li will be prime minister,” one person said. “The party is too concerned about stability to leave the issue undecided.”
The reshuffling will affect a range of other officials who have become well known in the West.
Wang Qishan, the technocratic mayor of Beijing, is now slated to succeed Zeng Peiyan as China’s top economic planner, people told about the Central Committee decisions said. Zhang Dejiang, the party secretary of Guangdong Province, will assume Wu Yi’s portfolio as the country’s trade policy maker and troubleshooter who coordinates responses to medical and safety problems.
Among key provincial posts, Commerce Minister Bo Xilai is expected to become party boss of the municipality of Chongqing in the southwest. Wang Yang, who currently holds the Chongqing job, is expected to move to Guangdong to replace Mr. Zhang. Yu Zhengsheng will assume Mr. Xi’s post as the top party official in Shanghai, the people said.

No Flinching From Recalls as China’s Exports Soar (NYTimes, 10/13/07)

October 13, 2007
No Flinching From Recalls as China’s Exports Soar
By DAVID BARBOZA
SHANGHAI, Oct. 12 — Despite a wave of high-profile recalls, and growing scrutiny of the quality and safety of Chinese goods, China’s export boom continues, according to newly released statistics from both independent analysts and the government in Beijing.
China said Friday that it exported $878 billion worth of goods in the first nine months of 2007, up 27 percent from the period last year, when Chinese exports posted record volume.
Global worries about contaminated pet food, tainted seafood and toxic toys and toothpaste have not been significant enough to slow China’s export engine, analysts say.
“Forty million toys may be bad for dozens of toy makers in Dongguan,” said Dong Tao, an economist at Credit Suisse, referring to one of southern China’s toy-making centers. “But that’s small potatoes for China’s over $1 trillion a year of exports.”
China’s trade surplus with the rest of the world has already ballooned to $187 billion through September of this year, up from about $177.5 billion for all of 2006, and much of the gains have come in trade with the United States and the European Union.
Even in categories hit by high-profile recalls this year, like food and toys, exports rose sharply, according to data compiled by Global Trade Information Services, based in Columbia, S.C.
Through August, China’s food and agriculture exports to the United States were up 27 percent over last year, to about $2.5 billion. And global exports of Chinese-made toys jumped 18 percent, to about $16 billion, during the period, despite a series of recalls of lead-tainted toys by Mattel Inc., the world’s largest toy company.
An exception is Germany, where imports of toys from China fell 42 percent in the first eight months of the year, compared with the period in 2006.
But over all, China’s pricing advantage over Western manufacturers — including lower costs for labor, land and energy — continues to draw new businesses.
The trade data, however, did offer some evidence that importers were responding to safety concerns, particularly in some smaller food categories. China’s exports of eel to the United States, for instance, fell 94 percent after the Food and Drug Administration moved last summer to block the imports of certain types of seafood, including eel and shrimp, because of concerns about the presence of excess antibiotics.
Japan, a huge importer of Chinese seafood, followed suit, canceling large orders of Chinese eel. Japan’s eel imports through August of this year dropped to about $59 million from $101 million during the 2006 period.
But most companies that import from China today do not seem to be canceling orders.
On the other hand, over 60 percent of Chinese companies that responded to a recent survey said they were investing heavily in new quality-control systems, according to Global Sources, a Hong Kong company that helps businesses find export markets.
“As more and more companies in the U.S. are understanding their liability, they are investing or requiring their suppliers to invest in quality control,” said Merle A. Hinrichs, chairman of Global Sources.
Analysts say China is, to some extent, immunized against a loss of confidence in any one area by its increasing diversification.
“A growing share of China’s trade is IT and electronics,” said Jonathan Anderson, an economist at UBS who is based in Hong Kong.
Some of China’s biggest gains are coming from the European Union, where imports of Chinese goods have jumped more than 30 percent this year, in part because of an undervalued Chinese currency. European officials are now pressing China to allow its currency to appreciate.
“There is substantial resentment building up in Europe, and I think the Chinese don’t recognize that,” said Joerg Wuttke, president of the European Union Chamber of Commerce in Beijing.
“The renminbi has gone south, and if you have a currency that depreciates you get more competitive in your selling propositions.”
But even with a weak dollar, American imports of Chinese goods are also up 17 percent this year.
Through the first eight months of the year, American imports of Chinese toys rose 16 percent from a year ago. Imports of Chinese seafood also jumped over 16 percent.
Mr. Tao, the Credit Suisse economist, said that the real threat to China was not product recalls, but economic changes taking place in the United States and in China itself.
“It’s the U.S. slowdown that worries me, and rapidly rising production costs in China,” he said.
“Wages are going up, food prices are going up and environmental measures are being launched.”
Those changes would make it more expensive to manufacture in China, and that might slow the juggernaut, Mr. Tao said.
Safety Agreement With China
WASHINGTON, Oct. 12 (AP) — Bush administration officials and their Chinese counterparts sought Friday to nail down a plan to ensure the safety of products that the Chinese export to the United States.
Dr. Andrew C. von Eschenbach, commissioner of the Food and Drug Administration, declined to discuss specific steps that China agreed to take to improve safety.
He did say, however, that Chinese health officials would come to Washington this month to complete details of a memorandum of agreement between the countries.
On Thursday, investigators with the House Energy and Commerce Committee reported that the food supply chain in China failed to meet international safety standards and that a lack of internal regulation there required a much more vigorous program of inspections and testing than the F.D.A. had been willing to pursue to date.

Beneath Booming Cities, China’s Future Is Drying Up (NYTimes, 09/28/07)

September 28, 2007
Beneath Booming Cities, China’s Future Is Drying Up
By JIM YARDLEY
SHIJIAZHUANG, China — Hundreds of feet below ground, the primary water source for this provincial capital of more than two million people is steadily running dry. The underground water table is sinking about four feet a year. Municipal wells have already drained two-thirds of the local groundwater.
Above ground, this city in the North China Plain is having a party. Economic growth topped 11 percent last year. Population is rising. A new upscale housing development is advertising waterfront property on lakes filled with pumped groundwater. Another half-built complex, the Arc de Royal, is rising above one of the lowest points in the city’s water table.
“People who are buying apartments aren’t thinking about whether there will be water in the future,” said Zhang Zhongmin, who has tried for 20 years to raise public awareness about the city’s dire water situation.
For three decades, water has been indispensable in sustaining the rollicking economic expansion that has made China a world power. Now, China’s galloping, often wasteful style of economic growth is pushing the country toward a water crisis. Water pollution is rampant nationwide, while water scarcity has worsened severely in north China — even as demand keeps rising everywhere.
China is scouring the world for oil, natural gas and minerals to keep its economic machine humming. But trade deals cannot solve water problems. Water usage in China has quintupled since 1949, and leaders will increasingly face tough political choices as cities, industry and farming compete for a finite and unbalanced water supply.
One example is grain. The Communist Party, leery of depending on imports to feed the country, has long insisted on grain self-sufficiency. But growing so much grain consumes huge amounts of underground water in the North China Plain, which produces half the country’s wheat. Some scientists say farming in the rapidly urbanizing region should be restricted to protect endangered aquifers. Yet doing so could threaten the livelihoods of millions of farmers and cause a spike in international grain prices.
For the Communist Party, the immediate challenge is the prosaic task of forcing the world’s most dynamic economy to conserve and protect clean water. Water pollution is so widespread that regulators say a major incident occurs every other day. Municipal and industrial dumping has left sections of many rivers “unfit for human contact.”
Cities like Beijing and Tianjin have shown progress on water conservation, but China’s economy continues to emphasize growth. Industry in China uses 3 to 10 times more water, depending on the product, than industries in developed nations.
“We have to now focus on conservation,” said Ma Jun, a prominent environmentalist. “We don’t have much extra water resources. We have the same resources and much bigger pressures from growth.”
In the past, the Communist Party has reflexively turned to engineering projects to address water problems, and now it is reaching back to one of Mao’s unrealized plans: the $62 billion South-to-North Water Transfer Project to funnel more than 12 trillion gallons northward every year along three routes from the Yangtze River basin, where water is more abundant. The project, if fully built, would be completed in 2050. The eastern and central lines are already under construction; the western line, the most disputed because of environmental concerns, remains in the planning stages.
The North China Plain undoubtedly needs any water it can get. An economic powerhouse with more than 200 million people, it has limited rainfall and depends on groundwater for 60 percent of its supply. Other countries, like Yemen, India, Mexico and the United States, have aquifers that are being drained to dangerously low levels. But scientists say those below the North China Plain may be drained within 30 years.
“There’s no uncertainty,” said Richard Evans, a hydrologist who has worked in China for two decades and has served as a consultant to the World Bank and China’s Ministry of Water Resources. “The rate of decline is very clear, very well documented. They will run out of groundwater if the current rate continues.”
Outside Shijiazhuang, construction crews are working on the transfer project’s central line, which will provide the city with infusions of water on the way to the final destination, Beijing. For many of the engineers and workers, the job carries a patriotic gloss.
Yet while many scientists agree that the project will provide an important influx of water, they also say it will not be a cure-all. No one knows how much clean water the project will deliver; pollution problems are already arising on the eastern line. Cities and industry will be the beneficiaries of the new water, but the impact on farming is limited. Water deficits are expected to remain.
“Many people are asking the question: What can they do?” said Zheng Chunmiao, a leading international groundwater expert. “They just cannot continue with current practices. They have to find a way to bring the problem under control.”
A Drying Region
On a drizzly, polluted morning last April, Wang Baosheng steered his Chinese-made sport utility vehicle out of a shopping center on the west side of Beijing for a three-hour southbound commute that became a tour of the water crisis on the North China Plain.
Mr. Wang travels several times a month to Shijiazhuang, where he is chief engineer overseeing construction of three miles of the central line of the water transfer project. A light rain splattered the windshield, and he recited a Chinese proverb about the preciousness of spring showers for farmers. He also noticed one dead river after another as his S.U.V. glided over dusty, barren riverbeds: the Yongding, the Yishui, the Xia and, finally, the Hutuo. “You see all these streams with bridges, but there is no water,” he said.
A century or so ago, the North China Plain was a healthy ecosystem, scientists say. Farmers digging wells could strike water within eight feet. Streams and creeks meandered through the region. Swamps, natural springs and wetlands were common.
Today, the region, comparable in size to New Mexico, is parched. Roughly five-sixths of the wetlands have dried up, according to one study. Scientists say that most natural streams or creeks have disappeared. Several rivers that once were navigable are now mostly dust and brush. The largest natural freshwater lake in northern China, Lake Baiyangdian, is steadily contracting and besieged with pollution.
What happened? The list includes misguided policies, unintended consequences, a population explosion, climate change and, most of all, relentless economic growth. In 1963, a flood paralyzed the region, prompting Mao to construct a flood-control system of dams, reservoirs and concrete spillways. Flood control improved but the ecological balance was altered as the dams began choking off rivers that once flowed eastward into the North China Plain.
The new reservoirs gradually became major water suppliers for growing cities like Shijiazhuang. Farmers, the region’s biggest water users, began depending almost exclusively on wells. Rainfall steadily declined in what some scientists now believe is a consequence of climate change.
Before, farmers had compensated for the region’s limited annual rainfall by planting only three crops every two years. But underground water seemed limitless and government policies pushed for higher production, so farmers began planting a second annual crop, usually winter wheat, which requires a lot of water.
By the 1970s, studies show, the water table was already falling. Then Mao’s death and the introduction of market-driven economic reforms spurred a farming renaissance. Production soared, and rural incomes rose. The water table kept falling, further drying out wetlands and rivers.
Around 1900, Shijiazhuang was a collection of farming villages. By 1950, the population had reached 335,000. This year, the city has roughly 2.3 million people with a metropolitan area population of 9 million.
More people meant more demand for water, and the city now heavily pumps groundwater. The water table is falling more than a meter a year. Today, some city wells must descend more than 600 feet to reach clean water. In the deepest drilling areas, steep downward funnels have formed in the water table that are known as “cones of depression.”
Groundwater quality also has worsened. Wastewater, often untreated, is now routinely dumped into rivers and open channels. Mr. Zheng, the water specialist, said studies showed that roughly three-quarters of the region’s entire aquifer system was now suffering some level of contamination.
“There will be no sustainable development in the future if there is no groundwater supply,” said Liu Changming, a leading Chinese hydrology expert and a senior scholar at the Chinese Academy of Sciences.
A National Project
Three decades ago, when Deng Xiaoping shifted China from Maoist ideology and fixated the country on economic growth, a generation of technocrats gradually took power and began rebuilding a country that ideology had almost destroyed. Today, the top leaders of the Communist Party — including Hu Jintao, China’s president and party chief — were trained as engineers.
Though not members of the political elite, Wang Baosheng, the engineer on the water transfer project, and his colleague Yang Guangjie are of the same background. This spring, at the site outside Shijiazhuang, bulldozers clawed at a V-shaped cut in the dirt while teams of workers in blue jumpsuits and orange hard hats smoothed wet cement over a channel that will be almost as wide as a football field.
“I’ve been to the Hoover Dam, and I really admire the people who built that,” said Mr. Yang, the project manager. “At the time, they were making a huge contribution to the development of their country.”
He compared China’s transfer project to the water diversion system devised for southern California in the last century. “Maybe we are like America in the 1920s and 1930s,” he said. “We’re building the country.”
China’s disadvantage, compared with the United States, is that it has a smaller water supply yet almost five times as many people. China has about 7 percent of the world’s water resources and roughly 20 percent of its population. It also has a severe regional water imbalance, with about four-fifths of the water supply in the south.
Mao’s vision of borrowing water from the Yangtze for the north had an almost profound simplicity, but engineers and scientists spent decades debating the project before the government approved it, partly out of desperation, in 2002. Today, demand is far greater in the north, and water quality has badly deteriorated in the south. Roughly 41 percent of China’s wastewater is now dumped in the Yangtze, raising concerns that siphoning away clean water northward will exacerbate pollution problems in the south.
The upper reaches of the central line are expected to be finished in time to provide water to Beijing for the Olympic Games next year. Mr. Evans, the World Bank consultant, called the complete project “essential” but added that success would depend on avoiding waste and efficiently distributing the water.
Mr. Liu, the scholar and hydrologist, said that farming would get none of the new water and that cities and industry must quickly improve wastewater treatment. Otherwise, he said, cities will use the new water to dump more polluted wastewater. Shijiazhuang now dumps untreated wastewater into a canal that local farmers use to irrigate fields.
For years, Chinese officials thought irrigation efficiency was the answer for reversing groundwater declines. Eloise Kendy, a hydrology expert with The Nature Conservancy who has studied the North China Plain, said that farmers had made improvements but that the water table had kept sinking. Ms. Kendy said the spilled water previously considered “wasted” had actually soaked into the soil and recharged the aquifer. Efficiency erased that recharge. Farmers also used efficiency gains to irrigate more land.
Ms. Kendy said scientists had discovered that the water table was dropping because of water lost by evaporation and transpiration from the soil, plants and leaves. This lost water is a major reason the water table keeps dropping, scientists say.
Farmers have no choice. They drill deeper.
Difficult Choices Ahead
For many people living in the North China Plain, the notion of a water crisis seems distant. No one is crawling across a parched desert in search of an oasis. But every year, the water table keeps dropping. Nationally, groundwater usage has almost doubled since 1970 and now accounts for one-fifth of the country’s total water usage, according to the China Geological Survey Bureau.
The Communist Party is fully aware of the problems. A new water pollution law is under consideration that would sharply increase fines against polluters. Different coastal cities are building desalination plants. Multinational waste treatment companies are being recruited to help tackle the enormous wastewater problem.
Many scientists believe that huge gains can still be reaped by better efficiency and conservation. In north China, pilot projects are under way to try to reduce water loss from winter wheat crops. Some cities have raised the price of water to promote conservation, but it remains subsidized in most places. Already, some cities along the route of the transfer project are recoiling because of the planned higher prices. Some say they may just continue pumping.
Tough political choices, though, seem unavoidable. Studies by different scientists have concluded that the rising water demands in the North China Plain make it unfeasible for farmers to continue planting a winter crop. The international ramifications would be significant if China became an ever bigger customer on world grain markets. Some analysts have long warned that grain prices could steadily rise, contributing to inflation and making it harder for other developing countries to buy food.
The social implications would also be significant inside China. Near Shijiazhuang, Wang Jingyan’s farming village depends on wells that are more than 600 feet deep. Not planting winter wheat would amount to economic suicide.
“We would lose 60 percent or 70 percent of our income if we didn’t plant winter wheat,” Mr. Wang said. “Everyone here plants winter wheat.”
Another water proposal is also radical: huge, rapid urbanization. Scientists say converting farmland into urban areas would save enough water to stop the drop in the water table, if not reverse it, because widespread farming still uses more water than urban areas. Of course, large-scale urbanization, already under way, could worsen air quality; Shijiazhuang’s air already ranks among the worst in China because of heavy industrial pollution.
For now, Shijiazhuang’s priority, like that of other major Chinese cities, is to grow as quickly as possible. The city’s gross domestic product has risen by an average of 10 percent every year since 1980, even as the city’s per capita rate of available water is now only one thirty-third of the world average.
“We have a water shortage, but we have to develop,” said Wang Yongli, a senior engineer with the city’s water conservation bureau. “And development is going to be put first.”
Mr. Wang has spent four decades charting the steady extinction of the North China Plain’s aquifer. Water in Shijiazhuang, with more than 800 illegal wells, is as scarce as it is in Israel, he said. “In Israel, people regard water as more important than life itself,” he said. “In Shijiazhuang, it’s not that way. People are focused on the economy.”
Jake Hooker contributed reporting from north China. Huang Yuanxi contributed research from Beijing.