Archive for March 2015

Can China afford to eliminate pollution?

March 3, 2015

It’s very good news that so many Chinese are so concerned about pollution (Google “Chai Jing documentary”) but I’m worried that under their present system, they have no way to really change it. I think the problem isn’t just political corruption or insufficient transparency: it’s that the level of debt throughout the society is already too high. The more companies control pollution, the lower their profits. The more the government tries to eliminate pollution, the more it’ll spend. But over the past 7 years, China’s debt level has already nearly quadrupled, so if it slows the economy to take on the pollution problem, will it afford to pay off its debts? Using debt to power an economy is like running on a treadmill whose speed you can’t adjust. Once you slow down, you fall. I still think China has to face the pollution problem (I refuse to live there because of it) but if it really wants to do that, I fear it’ll have to go through a financial crisis and recession first.