China’s coal-fuelled boom: the man who cried “stop”

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“We can no longer act on nature with impunity.” The “classic” model of economic development “poses a threat to humanity’s very existence”. China needs a new development model, based on renewable resources used effectively and sustainably, that will be built on the old model’s ruins.

Deng Yingtao, a high-profile Chinese economist, made this call to action thirty years ago in his book A New Development Model and China’s Future.[1] Its message was ignored by the political leaders it was addressed to. In this review article, I will consider why.

In the 1990s, the Chinese Communist party leadership prioritised expansion of export-focused manufacturing industry. The industrial boom really took off in the 2000s, fuelled by mountains of coal – the classic unsustainable resource.

In every year since 2011, China has consumed more coal than the rest of the world put together;

Steelmaking is one of China’s coal-hungry industries

more coal than the entire world used annually in the early 1980s; and more than twice what all the rich countries together used annually in the mid 1960s, during their own coal-fired boom.[2]

The primary beneficiaries of this economic model are not China’s 1.3 billion people. The big fuel users are in China’s giant east-coast manufacturing belt – which produces, in the first place, energy-intensive goods for export to rich countries: steel bars, cement, chemical products, agricultural fertilisers and electronics products. Household fuel consumption remains extremely low.

This level of fossil fuel use can not go on, not in China and not anywhere else, without courting the most horrendous dangers brought about by global warming.

Deng Yingtao made a compelling argument against going down this road, BEFORE the decisions were made.

In the Introduction to his book, he pointed to the yawning gap between rich and poor countries; the multinational companies’ rising power; and the damage done to the global south by capitalist boom-and-bust.

The “classic” development model had led to “a world economy dominated by the developed West and based on an inequitable international division of labour”, which had proved a “major obstacle to modernisation” for developing countries.

The solution, he argued, was not to adopt the “western theory of modernisation”, based on large-scale consumption of non-renewable resources, but to combine aims of economic development with a focus on renewable resources.

In A New Development Model, a sometimes dense economic text, Deng presented a scathing critique (chapter 6) of the “worthless cultural concepts” underlying the ideology of economic growth. He criticised the worth of Gross National Product as a measure of economic success.

Deng followed international economics debates, and referred to the work of western scholars on natural limits, including Elinor Ostrom and the authors of the Limits to Growth report. He skewered, at great length, the idea that market forces could allocate resources efficiently – an indication, I suppose, that such ideas were becoming fashionable in China in the 1980s.

In conclusion,[3] Deng set out his proposals for a new development model, which “will be based on renewable resources, and will protect these resources by means of effective and sustainable utilisation”. Non-renewable resources such as oil, coal and other minerals have to be used “in the most economic, non-polluting way”, in the context of a transition to renewable resources.

Changes in the resource base, he argued, “will significantly alter the way we live”.

Material consumption will no longer be allowed inexorably to increase. We need to ensure that our people are physically strong, highly skilled, intelligent and wise, and that they engage in work that is beneficial to the community, to future generations and to the environment. […]

The new development model will primarily be based on new-style flow technology (including technology for the recovery and recycling of resources), supplemented by the economical use of stocks technology. By contrast the “classic” development model relies on large-scale consumption of non-renewable resources and highly-polluting stocks technology.

Some key sections of Deng’s book are reproduced below. And I have written a separate article about his life as a Communist party member and scholar, and the group of reform economists of which he was one.

Reading Deng Yingtao’s book thirty years after it was written, I think it can help us to reframe our

Source: BP Statistical Review of World Energy

ideas about many big questions: the ecological crisis, its relationship to capitalism and the class struggle, and the role of twentieth-century state socialism (or Stalinism, if you want to call it that).

Let’s first extract ourselves from the close-up, political aspects of this. On climate change, just as (more obviously and immediately) on coronavirus, heaping blame on China is standard fare for Donald Trump and his near-fascist ilk.

Faced with their racist-tinged rhetoric, many people who try to think seriously about the ecological crisis (including me) respond by pointing out that China’s coal-fired boom serves rich-country economies, above all.

Even though China is now the world’s number one emitter of greenhouse gases, its emissions per person are way under half of those in the USA, that held the number one spot for more than a century before that.

About three-quarters of China’s emissions are from industrial production (compared to, typically, one third in rich countries); Chinese per-capita household emissions are a small fraction of rich countries’. And then there’s the historical responsibility of the rich countries, that their negotiators at international climate talks are so ready to deny.

All that is true. But still, we are left with the fact that in the 1990s, the Communist party leadership decided on policies that not only made the economy the prime supplier of energy-intensive goods to the rich world, but also turned the screw of non-renewable resource use in a way that imperils the whole of humanity.

It’s important to understand why.

From Deng Yingtao’s book we learn that, in adopting these policies, the Communist party not only brushed aside opposition from China’s dissident environmentalists, but ignored stark warnings made at the heart of the elite intelligentsia.

Deng Yingtao cried “stop!”, and they carried on.

Reading about Chinese government in the 1990s, it is clear that – despite signing the Rio treaty in 1992, and talking the talk about climate change – political leaders prioritised “economic growth” at all costs. Much like their counterparts in the rich countries.

The most powerful man in China, Deng Xiaoping, issued proclamations in 1990-92 about the urgency of increasing the rate of economic growth that mentioned neither environmental protection in general, nor the need to constrain greenhouse gas emissions in particular.

Jiang Zemin (Communist party general secretary 1989-2002), who made the political running in the mid 1990s, stood for “neoconservatism and east coast developmentalism”, the political scientist Joseph Fewsmith wrote. The industrial development centred on the east coast became the political priority; the market reforms that spurred it on resulted in rising property prices, regional inequalities, an explosion of private business and the emergence of the nouveau riche – which in turn provoked social tensions.[4]

China’s gross domestic product (GDP) grew steadily through the 1990s, but so did the gap between rich and poor, Fewsmith concluded. And:

[G]rowing income inequality, corruption and worsening relations between cadres and peasants were generating growing numbers of social conflicts.[5]

Another western researcher of China, Peter Nolan, put it this way:

China’s attempt to construct an industrial policy has occurred [in the 1990s] in the midst of the era of capitalist globalisation, which has produced unprecedented global industrial concentration of business power, far beyond that which faced Japan or Korea at a similar phase in their development. The industrial policies pursued by Japan and Korea could not easily be transferred to China.

After “initial cautious experiments” at market reforms in the 1980s, in the 1990s large state-owned enterprises were turned into corporate entities with diversified ownership, shares markets took root, and joint ventures were established with international companies.[6]

China’s industrial policy, then, was shaped by the changes in world capitalism: globalisation, the internationalisation and computerisation of financial markets, and the neoliberal obsession with privatisation and “liberalisation”, as a way of disciplining and exploiting the countries of the global south.

When Chinese politicians put aside the declarations made about climate change at Rio, and pressed their feet down on the accelerators of industrialisation, they were acting in concert with the political leaders of the western powers – whatever war of words was going on between them.

These policies bore their most ecologically disastrous fruits after 2001, when Chinese accession to the World Trade Organisation (WTO) boosted the export boom. Between 2000 and 2007, China’s output of steel and aluminium more than doubled; cement and fertiliser production went up by six and five times respectively. The primary fuel for all this was dirty, dangerous coal, shovelled – much less efficiently than in rich countries – into blast furnaces, power stations and factories.

Peter Nolan, at the end of his Foreword to the English edition of Deng Yingtao’s book,[7] wrote that, instead of the new development path that Deng pointed to,

China has essentially pursued the classical, energy-intensive development path that was followed by the high-income countries themselves. China’s urban population mainly lives in vast mega-cities, where the urban skyline has been transformed from mainly Soviet-style, low-rise apartment blocks into a forest of high-rise apartment buildings festooned with air conditioning units on the outside and packed with consumer appliances inside.

Nolan quotes the environmentalist Rachel Carson, who wrote that the road travelled by western capitalism is forked, that it had taken the road to disaster, and that only the other fork – the one “less travelled by” – would assure the earth’s future. Nolan concludes gloomily:

Deng Yingtao’s book serves as a poignant reminder of the “road less travelled by” that China might have chosen, but did not take.

It’s high time we all paid more attention to this reminder.

Deng Yingtao’s prescient warnings about China’s industrial juggernaut have been ignored as much by the world at large as they were by the Communist party leadership at the time. Since the carefully-edited English edition of his book appeared in 2014, it seems to have received no attention inside or outside universities. I couldn’t find any previous reviews of it.

For socialists (including me), this story also says something about the relationship between twentieth-century state socialism and capitalism. In the Soviet Union as well as China, state socialism carried through the brutal task of industrialisation – with all the attendant human suffering – that capitalism had accomplished in Europe and north America in the nineteenth century.

State socialism not only failed to produce an economic model that worked as an effective alternative to capitalism, but also paved the way for the return of capitalist exploitation with a vengeance, in the 1990s, to eastern Europe, the former Soviet states and China – each in very different ways. China, with its vast reserve of cheap labour, preserved its authoritarian state structure – in contrast to the Soviet one, which fell apart – and so made the most “successful” transition.

Now we are counting the full cost of this “success”. The Chinese leaders, like their western counterparts, closed their eyes to the ecological consequences of their actions, despite acknowledging at Rio the climate scientists’ clear warnings.

In the twenty-first century, a de facto alliance between the overlords of world capitalism, and the authoritarian political descendants of Chinese Stalinism in Beijing, has brought humanity to the brink of disaster.

Hopes of undoing the work of this unholy alliance lie not in the international climate talks process – notwithstanding the obvious logic of the attacks made on the western powers there by the developed nations, with China foremost – but in radical social change. GL, 30 April 2020.

Read a linked article about Deng Yingtao and the reform economists here  

To learn more about all this, I strongly recommend a forthcoming book: Isabella Weber, How China Escaped Shock Therapy: The Market Reform Debate (Routledge, 2020). An interview with Isabella on these themes, by Pandora Rivista, is here. I thank Isabella for telling me about Deng Yingtao’s book, and taking time to discuss it with me.

 

Deng Yingtao in his own words

The economy of waste

Developing countries should not be deluded into thinking that they can reach America’s standard of living within decades. Americans, who make up less than 6% of the world’s population, consume between one third and one half of mineral resources produced annually. Thus, even if there was a complete redistribution of global resources, the “classic” development model could not, objectively speaking, be universally applied. The reason is simple: the resources that are a prerequisite for this model simply do not exist for the great majority of developing countries. It is extremely doubtful whether these conditions are sustainable, even for small numbers of developing countries. Once non-renewable resources are exhausted, the situation can not be reversed, and the long-term problems engendered by recklessly wasteful growth will be plain for all to see.

Second, current systems of resource allocation, including market allocation mechanisms and private ownership, vastly underrate the value of resources formed on a geological timescale. The truth is that market mechanisms, which regulate supply and demand, free of interference, have greatly increased levels of scarcity of resources in the long term, leading to an entrenchment and acceleration of the many problems which the “classic” development model has brought with it and which we see today. In the very long term, the “invisible hand” is not only of very little use to humankind, its effects may actually be damaging, and it is only when matters reach crisis point that this damage suddenly becomes apparent. This will eventually have an irreversible adverse effect on the future of humankind, obliging us to pay a heavy price to counteract it.

A blueprint for reconstruction

As we choose a long-term development model, we should focus on using renewable resources, and the consumption of non-renewable resources should be reduced. As regards food consumption, we should adopt a diet of mixed meat-dairy and vegetable products, avoiding a largely meat-based diet. Our transport system should be made up of a combination of bicycle transport, public transport systems and taxis; and private car use should be discouraged. Agriculture should be labour-intensive and knowledge-based, and managed along ecological lines, avoiding a reliance on fossil fuels. We should put more efforts into restoring and protecting the environment, rather than waiting until the damage has reached intolerable levels before intervening. We must prioritise universal education, improving all-round skills in the whole workforce. Our health care should be based primarily on prevention and self-care, and we should reject a large-scale, high-tech health care system. We should employ a variety of economic, administrative and legal means to limit the consumption of resources on which there are currently severe constraints. We should adopt the use of new communication technologies to enhance social integration and reduce communication costs. All of these measures should take full advantage of advances in science and technology, enabling us to make great improvements to the existing infrastructure on which our long-term development will be based.

From: Deng Yingtao, A New Development Model (Routledge, 2014), p. 69, and pp. 173-174. Reproduced with kind permission from Routledge

Download this article (and the linked one) as a PDF

[1] The book was translated and published in English, with a Foreword by Peter Nolan, in 2014: Deng Yingtao, A New Development Model and China’s Future (London: Routledge). The statements quoted in the first paragraph are from pages 177-178

[2] China’s coal consumption in the 2010s has been around 2800 million tonnes per year. See <https://www.iea.org/reports/coal-2019&gt;

[3] Deng Yingtao, A New Development Model, chapter 11 “Desperate measures are called for”

[4] Joseph Fewsmith, China Since Tiananmen: the politics of transition (Cambridge University Press, 2012), pp. 174-182

[5] Fewsmith, China Since Tiananmen, p. 274

[6] Peter Nolan, Re-balancing China (Cambridge University Press, 2014), pp. 78-80

[7] Deng Yingtao, A New Development Model, p. xxviii

One Response to China’s coal-fuelled boom: the man who cried “stop”

  1. […] Chinese economist, called the world to action thirty years ago in his book A New Development Model and China’s Future: “We can no longer act on nature with […]

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