The dangers of boosting consumption

China’s government and the domestic market are calling for greater spending. Economic growth may be maintained, writes Huo Weiya, but US-style living may mean we need another two Earths.

To maintain an 8% economic-growth target through the current global financial crisis, the Chinese government has launched an investment stimulus package worth four trillion yuan (US$585 billion) and eased bank-lending restrictions. But another important measure is the increasing of individual consumption.

In 2008, the Chinese government launched “village appliance” schemes nationwide, with subsidies used to increase sales of televisions, refrigerators, washing machines and mobile phones in rural areas. Another two billion yuan (nearly US$300 million) was invested in 2009 in a “new-for-old” policy that will see individuals and businesses sell old appliances back to the state and receive a 10% subsidy on new purchases. Besides this, the automobile market is benefiting from subsidies and tax breaks, and many cities have handed out shopping vouchers to local people.

The export-oriented economy has been hard-hit by the economic turmoil, increasing the government’s determination to make the domestic market the engine of growth. “Increase domestic demand, maintain growth” is seen as the secret to guiding the economy through hard times. But there are dangers hidden in this strategy, and there will be considerable environmental consequences if a long-term approach is not taken.

First, there is the issue of reusing resources. In China, it is not just rubbish that gets buried in landfill; many materials that could be reused also end up there. And once products have been used, they are treated as rubbish and thrown away. Any recycling that takes place is often the result of scrap collectors sifting through rubbish for the more valuable items; the rest goes to scrap or compost.

Increasing amounts of rubbish mean that many cities – including Beijing – are at risk of being surrounded by landfill sites and are turning to power-generating incinerator plants. This is controversial, with environmental bodies saying China should be sorting and recycling its rubbish. But China does not have a system for sorting rubbish.

When explaining the “new-for-old” policy, a National Development and Reform Commission (NDRC) spokesperson said that it would see five million appliances replaced, while 90 million of the types of appliances mentioned above would be discarded annually. But the pervasive presence of scrap collectors throughout China’s cities demonstrates that standardised collection and disassembly companies are not yet common. The sector is dominated by small, informal traders, and the environmental consequences of this already have already been covered in our earlier article “Low-carbon living begins at work”.

The authorities released guidance alongside the “village appliances” and “new-for-old” policies, but with the recycling sector just getting started, it is unclear if the measures will be effective and if they will reach out into the rural areas.

In February, the State Council issued Regulations on Recovery Processing of Waste Electrical and Electronic Products, setting out the direction for the sector. But this only comes into effect in 2011. Until then, those small scrap merchants will be the main channel for recycling. They will purchase discarded appliances and then sell them on to companies unable to process them properly or to small, unregistered workshops.

The inadequate processing of waste doesn’t just create pollution; it’s also the cause of significant waste. According to the same State Council spokesperson, the new-for-old policy would see 2.3 million tonnes of resources collected for reuse. But without systems in place, much of that will be treated as garbage.

Another risk is the inflation of consumer expectations. A special feature on a well-known Chinese website,, recently described white-collar workers as the killers of the environment. The white-collar lifestyle involves high levels of consumption, and consumption is the natural enemy of the environment. In a poll on the website, the vast majority of those surveyed said that it is everyone’s duty to protect the environment.

But despite these views, what actually happens is different. From July 1, hotels in the city of Changsha were no longer supplying items such as disposable toothbrushes and single-use tubes of toothpaste for free; they will be charged for. A survey on found 77% of respondents opposed the move, complaining of inconvenience.

These two surveys demonstrate the clash between ideas of consumption and environmental protection. Environmental awareness was non-existent three decades ago. Today, the environment is often the focus of public debate. But the Chinese seem to be becoming ever more like the Americans they so often point fingers at – happy to protect the environment, as long as they don’t need to change their lifestyles.

The “3R” principles of waste-management strategy are “reduce” (to minimise energy and resource use), “reuse” (to use an item more than once), and “recycle” (to process used items into new products). Reduction and recycling have been put into political and economic practice, but reuse — the concept at the heart of the circular economy – has been given the cold shoulder. Most consumers seem to have left environmental matters to environmental groups. As long as they can afford to, they’ll consume as much as possible that is new.

China is placing more emphasis on its domestic market, with a range of methods applied to increase consumption and boost the economy, thereby making consumption seem ever more natural. With both the government and the market calling for greater spending, will China’s potential consumption be realised?

The Chinese did not use to be heavy consumers, either because they did not have the funds or the lack of a welfare system meant they saved their money for a rainy day. But 30 years of economic growth have given us ample material desires – a lifestyle of keeping up with the rich, keeping up with the Americans, has taken root. As soon as we are able to consume, we do so – no less than the citizens of developed nations do. Economic growth may be maintained, but as the environmentalists warn, we may need another two Earths to meet the new US-style consumption of the Chinese nation.

Huo Weiya is operations and development manager for chinadialogue in Beijing and former editor-in-chief of Environmental Culture Newsletter.

With policy encouragement causing sharp increases in consumption, how should China improve the reuse of resources? What are your views on waste processing? Increased consumption brings environmental dangers, but lower consumption could result in slower economic growth, leading to social problems such as unemployment. So what should be done? Tell us what you think on the forum.

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