China has failed to resolve the challenges of natural resource exhaustion
effectively. Do you agree?
Challenges here refer not only to the problem of natural resource exhaustion, but also its negative aftereffects on the country. Natural resources referred here are mainly energy fuels, fresh water supply, timber and other minerals that China has in abundance at least formerly. Unbridled growth of the Chinese economy since 1978 has resulted in rapid depletion of natural resources within the country. Natural resource exhaustion has led to consequences such as energy shortages, environmental degradation, and health problems for resource imports. These are in turn problems that could impede the sustainability of Chinese economic growth, even social and political stability. There is no certain answer to the statement as Chinas measures to resolve resource shortages are still ongoing and have yet fulfilled their intended results. Nevertheless, the Chinese have made significant headway at managing the problem, the situation would have been much worse without any attempts to remedy it. Resources-management policies by the far-sighted and decisive Chinese leadership have resulted in lesser wastage. Under the former premier Zhu Rongji, logging of old forests are banned while an ambitious reforestation program is implemented. Chinas State Environmental Protection Agrency (SEPA) is given vast power to deal with resource depletion within the country. The use of high sulphur coal is also heavily taxed so that industries would resort to suing cleaner burning fuels. Special loans are extended by the state banks to firms that practice the proper environmental protection measures. Resource exhaustion that affects Chinas energy supply is under strong governmental control as they energy sector is state-owned. National vulnerabilities from resources exhaustion are mitigated as China is the worlds sixth largest producer of crude oil and the worlds largest producer of coal. Extensive R&D projects by Chinese energy companies, backed by the government, have been conducted with some successes on the enhancement of energy-usage efficiency and environmental protection. Coals are mined with new technology that enables close to 75% recovery rate for the underground mining sites. Control over energy resources also means that the government could charge relatively lower prices for their sale, hence protecting the people from price hikes, eliminating a major cause for social discontent. Development of alternative sources of energy also ameliorates the seriousness of the energy resources crisis. China is the worlds largest investor on the search and utilization of renewable energy. Construction of the Three Gorges Dam, along with several other smaller dams, attests to governments determination to resort to hydroelectricity to satisfy mounting energy demands. The government also plans to build nuclear plants to
supply power to the cities of Southern China. Under governmental
encouragement, wind and solar power generators are becoming popular even in private households, especially for those in the countryside and interior China. Proactive diplomatic and trade measures have been sought to resolve the resource exhaustion. Strong ties have been forged with countries in Central Asia and Africa to secure rights to extract crude oil, natural gas and other mineral resources. Myanmar, one of Chinas allies, is responsible for supplying the country with timber and certain precious metals. China is on good terms with Australia as the latter is worlds foremost supplier of uranium. On the other hand, the government ahs purchased several other overseas energy companies to capitalize on their resources and extraction expertise. China has also staked strong claims on resource-rich territories such as the oil fields of East China Sea, the Spratly and Parcel Islands. Meanwhile, governmental measures at resolving water shortages have attained limited success. Water Protection Law is made more stringent in 2008, to prevent its infringement by errant businessmen and corrupted officials. Heavy fines are imposed on top company executives whose industrial wastes have polluted waterways in China. Nevertheless, Chinas fresh water shortage remains acute. Not only the industries, farms and households too are responsible for the massive pollution to the countrys rivers and lakes. To ensure fresh water supply for Beijing during its hosting of the 2008 Olympic Games, numerous towns and counties around the Chinese capital suffered from drought. The government has made only limited achievements at curbing the undesirable effect of the resource exhaustion from the earlier phase of Chinas economic development. Reforestation and the resettlement of oases could not completely stop the process of desertification in much of Northern China. Such has resulted in air polluted water are not entirely resolved, even as tens of thousands have died of cancer. Chinas swindling supply of coal has caused Premier Wen Jia Bao to urge the people to cut back on using the air-conditioning and travelling. However, continued high economic growth has resulted in Chinas inability to decisively stem the exhaustion of natural resources. Energy demands have been raised consistently due to rapid urbanization and greater industrial activities over the years. Even as the composition of coal use has shrunken from 76% to 66% between 1990 and 2002 overall energy consumption has increased by more than 50%. This is complicated by the fact that Chinese employment of their energy resources highly inefficient. Proliferation of farmlands, the construction of highways and other infrastructures in the inner provinces, are often cited as major reasons for the loss of forested tracts, causing further desertification and soil erosions. Chinas Go West
Policy to develop the interior provinces also resulted in the continued
exploitation of whatever is left of the countrys meager resources. In conclusion, while the Chinese have achieved some significant successes at resolving their resource shortages, they are nonetheless fighting to ameliorate mounting losses rather than reclaiming lost wealth. Unless domestic demands are drastically lowered or viable alternatively are discovered, Chinas natural resource exhaustion will remain as the countrys perennial woe.
Fundamental Equity Analysis & Recommandations - The Hang Seng Mainland 100 - 100 Largest Companies Which Derive The Majority of Their Sales Revenue From Mainland China