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Chinese find development has big downside

China's rapid urbanization has raised the standard of living for hundreds of millions of Chinese people but also brought rampant corruption and widespread pollution.
Stockbroker Zai Shasha has mixed feelings about Chengdu's rapid development. Growth has brought prosperity to many, but "the air is becoming terrible," she said.
Stockbroker Zai Shasha has mixed feelings about Chengdu's rapid development. Growth has brought prosperity to many, but "the air is becoming terrible," she said.John Schoen /

At a small desk tucked in the corner of a Bank of Communications branch office in central Chengdu, a broker for Huaxi Securities is helping her customers navigate the burgeoning Chinese stock market.

Zai Shasha's customers are moving some of their new wealth into companies that are profiting from the rapid growth that has transformed cities such as this one from a sleepy provincial capital into a bustling regional hub. That rapid development and the resulting prosperity have been good for Zai’s customers and her standard of living.

But Zai confessed she had “some sorrows” about Chengdu’s rapid transformation.

“The traffic is bad,” she said. “And the air is becoming terrible.”

John Schoen /

The haze that hangs over this city, and many others in China, is among the most visible of stresses created by breakneck development. Just 1 percent of the country’s 560 million urban residents breathe air considered safe by the European Union, according to a 2007 report by the World Bank.

Explosive economic growth and rapid urbanization have brought other problems, as well, for hundreds of millions of Chinese  moving to the cities looking for a better way of life.

An online survey last year by Xinhua, the official Chinese news agency, found that corruption topped the list of respondents’ concerns. Other key issues included the wealth gap, access to education, democracy and health-care reform.   

Since 1978, the number of cities in China has more than tripled, to 661, and the urban population more than doubled to 43 percent of the nation's 1.3 billion people, according to China Labor Bulletin, a Hong Kong-based organization.

With much of China’s 800 million workforce still living in sparsely settled rural areas, the Chinese government is hoping that development of cities such as Chengdu will help recreate in the western provinces the rapid industrialization of the east and south that has lifted hundreds of millions of people out of poverty. It’s a process that will likely take decades.

Traffic jams have become a way of life for millions of urban Chinese. Vehicle emissions have bcome a major source of air pollution in big cities. As of the end of 2009, there were 76 million cars and trucks on the road, a figure that’s expected to more than double by 2020.

Cars and trucks aren’t the only source of air pollution. Last year, China burned 3.3 billion tons of coal to generate power, warm its homes and fuel cook stoves in rural villages. That's up from 2.4 billion tons in 2005, according to U.S. Department of Energy estimates, or more than three times the amount of coal burned the United States, the next largest consuming country.

And it's not only the air that is becoming polluted in the rush to maintain breakneck economic growth.

John Schoen /

On a recent evening, the Chengdu river walk was crowded with strollers looking for a respite from the late summer heat. Barefoot residents walked in circles over a section of sidewalk embedded with river rock offering a welcome foot massage. On a small dock at the end of a ramp down to the river, three men were fishing in the moonless night, with short glow-lights attached to their lines to better see a strike. But the beauty of this popular public space was marred by a lingering odor wafting up from the water.

Runoff of fertilizers, pesticides, chemicals and untreated wastewater all have taken a toll on China’s rivers and waterways. In December, Wu Xiaoqing, a top official in the Ministry of Environment, said nearly 90 percent of rivers passing through cities are polluted, and some 270 million people in rural areas suffer from unhealthy drinking water.

The Yangtze River is awash in toxic chemicals posing health risks for tens of millions of people, environmental watchdog Greenpeace reported last month. Heavy metals and carcinogens were regularly found in fish caught in four cities along the river, the group said in a report.

After a string of explosions and spills, the environment ministry recently announced it would survey conditions and invest 90 billion yuan ($13.2 billion) on new water pipelines, water reclamation and water pollution controls. The measures are supposed to close down illegal dump sites, drain outlets and factories that don’t meet water quality standards.

“The Chinese government is attaching great importance to the environment,” said Zhu Shouchen, executive secretary of the All China Journalists Association. “Protection of the environment is one of the indicators of Chinese officials’ performance. If they can’t fulfill this goal of protecting the environment, they will be kicked out. It’s that tough.”

But Chinese officials concede they have their work cut out for them. In May, Premier Wen Jiabao told a forum on pollution control that progress had stalled on a four-year plan to boost energy efficiency.

“It is getting more and more difficult to meet the targets due to the resurgence of heavy polluting industries in the past year or so,” Zou Ji, an climate expert at the World Resources Institute, told the South China Morning Post. “The risk of missing those targets is growing.”

Coping with corruption
The surge of wealth in China also has been accompanied by corruption at all levels of government.

Western countries doing business in China have to deal with widespread expectations of "gift giving" to operate in a culture where personal relationships can make the difference between success and failure. The practice can backfire if not handled properly, according to K.C. Kwok, a University of Hong Kong economist.

"You have to be very careful," he said. "You don’t want to make the other guy feel like he’s being bribed. But you want to bribe him. It’s a very technical skill.”

Corruption has become a fact of life for many Chinese people. To help close the wealth gap for the more than 340 million rural workers who haven’t migrated to cities, for example, China rolled out a series of land reforms to help farmers and other rural households.

But land reform also opened up the opportunity for a wave of corruption, as local officials demanded bribes for building permits and contract kickbacks.

In May, the Ministry of Supervision announced that more than 3,000 officials had been punished for various forms of graft and corruption, including bribes and embezzlement related to land sales and government stimulus spending.

“We will tackle corruption with a heavy fist,” said Fu Kui, head of the ministry’s enforcement department, when the corruption sweep was announced. “With many corruption cases likely to happen, if we don’t take tough measures it will be hard to suppress this.”

China’s continued investment in development will present ongoing opportunities for corruption. Beijing has promised to spend heavily to clean up the air and water, build new schools, roads, hospitals, airports, and fund other projects aimed at moving its development plan to the next phase.

Now, they have to find the money to pay for it.