Monday, July 23, 2007

Chinese Environmentalism, II

Reuters picks up on this article, detailing Beijing's suppression of a report which stated that environmental degradation had cost the Chinese economy $67.7b in 2004 - some 3% of GDP.

I think we'd all agree that clamping down on the facts is not good, but that's not my area of expertise. Rather, 3% of GDP? That is large. To misquote, a few billions here and there are real money. The latest Chinese GDP release was saying 11.9% growth, however, so its not like China is economically shrinking.

Now, some elementary math. IMF estimates for PPP GDP put China at $7598, Canada at $35495. Assuming Canada grows at 2.5% and China maintains 11.9% (unlikely, in my opinion), correcting for that environmental degradation slows convergence by 8.1 years.

Not really a relevant calculation in retrospect. Alternatively, let's put it this way: Over ten years, starting at $1, growing at 11.9% compared to 8.85% (adjusting for environmental degradation) costs you over one-sixth (17.4%) of your total income over the period. Twenty years? Approaching one-half. (43.6%) This is what I would consider substantial.

My cubicle comrade (Chinese citizen, parents both Party members), has concerns about the environment. If it has progressed to that level, maybe action is forthcoming.

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