The New Great Game: Potential Impact of Mongolia’s Mineral Development on China, Russia, Japan and Korea

18 September 2012
East-West Center
Dr. Alicia Campi

    Last week, noted Mongolist Dr. Alicia Campi gave a lecture on her research into Mongolia’s new mineral development and its effects on surrounding north Asian countries. For this post, I will focus only on her discussion of China:

    China’s neighbor to the north, Mongolia, is in the midst of a very exciting time: the country’s economy is growing by leaps and bounds, and most of this growth is directly attributable to Mongolia’s extensive mineral reserves. Mongolia is home to vast deposits of coal, gold, uranium, copper and rare earth minerals. In 2011 alone, coal mining increased 23%!

    What does this mean for China?
   
    China is currently Mongolia’s largest trading partner and foreign investor. As both a geographically enormous country and a coal-based economy, China has the onerous task of transporting coal all over the nation to fuel industry. This ties up the railways! So naturally, China is very interested in Mongolian copper and coal for its factories in the north, closer to the border.
   
    However, China could have other motives for buying Mongolian coal. According to a Peking University professor, China only invests in Mongolia for “political reasons.” He was referring to China’s national security goal of encouraging the Mongolian government not to support Inner Mongolian “terrorists.” Given that the Chinese government has forwarded huge sums of money to Mongolia in exchange for minerals it won't receive for years, this claim seems legitimate.

    As I was listening to Dr. Campi’s lecture, two things struck me as significant:
        1. Mongolia’s plan for the future is to diversify their foreign investors (meaning, not let China invest so much more than any other country)
        2. Russia is interested in monopolizing Mongolian coal in order to keep it out of China’s hands

        These two points indicate that it might be more difficult for China to obtain Mongolian coal in the near future. Could this cause China to make more of an effort to shift its economy towards a renewable energy base? Or will China just find other ways to keep fueling its growth using coal? Only time will tell!

-Hannah Chen

Low carbon development and public participation in China (Dr. He's talk on VOA)

There will be a talk by Dr. He on Voice of America (VOA) Oct. 5, Wednesday:

Time: Oct. 5, 9pm-10pm (Beijing time), 9am -10am (EST, USA)
Program: Issues and Opinions, Voice of America
Featured guest: Dr. Ping He, President of IFCE
Issues to be discussed: Low carbon development and public participation in China

You can watch online the live broadcast at: http://www.voanews.com/chinese/video-audio/
or you can also listen to the live talk show online at: http://www.voanews.com/chinese/video-audio/?play=Audio

Audience can dial in (FREE) to discuss with Dr. He or to ask questions:
Mainland China - Step 1, dial 10810 or 10871; Step 2, dial 866-837-5161 after you hear the recorded voice in Chinese
Taiwan - Step 1, dial 00801-102-880; Step 2, dial 866-837-5159 after you hear the recorded voice in English
Other regions (including in the US) - dial 202-401-4941

The Paradigm of China's Developmental Problem

This past Wednesday I was fortunate to have the opportunity (seriously) to attend an event at the wonderful Brookings Institute, a premier organization of scholars and intellectuals. Their Thornton Center continues to attract some of the best and brightest China-focused minds, whose quality of output might be matched, but hardly surpassed. The event was entitled “Intellectuals Divided: The Growing Political and Ideological Debate in China”, and a more apt title, there are none. Regardless of your level of expertise regarding China, this talk was exceedingly informative and in-depth, while remaining accessible. For individuals interested in what is occurring on the ground in China, the internal governmental and intellectual debates as well as a non-economic assessment and prediction regarding the big red state’s future should hit the jump for more.

Rotten Apple

No one will argue that Apple makes visually stunning products: sculpted metal, sleek curves, and bright glass. Since Steve Jobs took the helm for a second time (after bombing with NeXT) the company rose from alt-obscurity, to mainstream media darling. There is no other technology company (maybe even no other company at all) whose products are received with such grandiose fanfare. Apple's product releases are like holidays to their fans who line up for hours to hear the turtlenecked man speak, and make glorious fodder for bloggers. I mean, HTC makes some beautiful phones, yet no one is so interested in taking the damn thing apart and examining every last crevice, or pouring over nondescript and vague patents (okay, fine I'm guilty of it..). They have seemingly out of nowhere, become a shining beacon of American export. The Shanghai store mimics the flagship downtown New York cube-store and is rivaled only perhaps by the Beijing branch in Sanlitun, or the store in the Ginza district of Tokyo. People are crazy about these products not only domestically, but in China as well... I mean the Shanghai branch was literally cloaked in gigantic red drapes, and literally guarded by ninjas on top of it. Unfortunately, some of the people who make these products have actually gone crazy.

They have done so not from fandom mania, but because of the work environment created by the outsourcing of a supply chain so as to cut down on production costs and maximize profit for Apple. By having an extremely segmented supply line and using individual manufactures for separate parts, Apple has in a way limited itself from exposure largely to the fact that these companies would be shut down in the United States for how they treat their workers. This is not to say that Apple is the only company responsible for this type of practice -- they are not -- but given their prominence in international economics (I mean, they have a higher market capitalization than the US government) they should certainly be looked at long and hard, as we consider our developing relationship with China. Encouraging an exploitative relationship has been allowed to flourish, not the least of which is China's vast (though dwindling) supply of labor, lax regulations, and an export-driven economy. The problem is, that because Apple is an international company these sales, where the real value is made -- with the sale of the finished product, not assembling or sourcing of parts -- China, and god forbid their workers, benefits little from their massive profits.

Foxconn, who produces some of the most complex individual components for Apple products, including touchscreens, has become the prime example of unexpected exposure for international companies with the practices outlined above. They have had a rash of employee suicides stemming from question corporate practice, and numerous other companies in the supply chain have had large-scale unease, complaints, and protestation for the negative and unregulated impact of chemicals used in production on employee health, and local quality of life as effected by unregulated and damaging emissions, and dumping practices. None of this is new information, but something that is new is the second part of a report called 'The Other Side of Apple II' (Part II found here, and Part I here) by five environmentally focused NGOs: Friends of Nature, The Institute of Public and Environmental Affairs, Green Beagle, Envirofriends, and Green Stone Environment Action Network.

The exploration is compelling, and I highly recommend you to read or at least skim parts of it to get a sense of how far these negative and damaging practices go. Despite a strict regulatory framework, pollution and dangerous chemical standards were, well, standardly ignored. It was your all-too-typical leaving a box blank on a form, botching some figures, and some outright disregard as well. Local rivers surrounding these factories have toxicity levels that make them nearly useless for farming, let alone evening thinking about using it as a potable water source. This is a just the continuation of a broken cycle in the agrarian countryside where a minute number of individuals are already entrusted with the literally impossible task of feeding their nation. What is interesting, is that an increasing number of individuals, and in fact, employees are finally getting fed up with this shit -- many leaving their jobs despite no other immediately viable employment opportunities.

Eventually, China is going to have to own up to its own 'standards', but for now as lax regulation reigns supreme in an export-driven, money-crazed CCP focused on maintaining obviously unsustainable levels of economic growth, there doesn't seem much hope. There are only two occurrences which could lead to China actually caring about this type of issue (rather than Wen Jiabao's wonderful rhetoric, followed by predictably falling out of view, and subsequent inaction). Firstly, they regional governments will become disempowered by the fact that the central government realizes that such environmentally damaging practices are actually limiting their long-term growth (which no one seems to care about, yet feel fine on chastising the West for acting as such, but that's another article...) losing what academicians Elizabeth Economy out of the Council for Foreign Relations, and Vaclav Smil out of the University of Manitoba to have estimated to the tune of one-third of a trillion dollars squandered due to political fallout, corruption, employee compensation (minimal), and most of all inefficiencies. When this amount of money starts mattering to the central government (and it's hard to undersand how it doesn't) international firms will start to have to care about how they act, or else risk being boxed out of the most stable, and potential-laden global economy -- one that will remain as such for a good 5-7 years depending on how fast civil unrest can spread. It is sad that companies and governments only pay mind when money is involved, but if that is the reality, so be it. As for now, companies should think about their image (and who cares more about theirs than Apple?) by doing the morally responsible, respectable, and correct thing by taking slightly more care, paying their workers a little more, and thinking long-term about how they want to be thought of, rather than simply the quarter-by-quarter P&L breakdown.

Or maybe I'm just unrealistic.

Jie Zhou: Summary of “Dams and Sustainability in China” in Woodrow Wilson Internatinal Center

Summary of “Dams and Sustainability in China” in Woodrow Wilson Internatinal Center

By: Jie Zhou
07/26/2011

This Tuesday the Woodrow Wilson Center Hosted a China Environment Forum on “Dams and Sustainability in China” as China is home to roughly half the world's large dams and hydropower is set to play a key role in helping China meet its 2020 carbon intensity reduction commitments. The speakers explored dam trends and challenges in China,

Speakers

Doug Smith, International Hydropower Association (IHA)
As a Sustainability Specialist at the IHA, Douglas has focused on the new Hydropower Sustainability Assesemtn Protocol. He has experience over twenty countries on four continents, and worked in Beijing for three years until 2010.

Desiree Tullos, Oregon State University
Desiree Tullos is an Associate Professor in the Biological and Ecological Engineering Department at Oregon State University. Some of her current research include effects of hydropower development in China, analysis and design of dam removal, dam operations, etc.. She has been working in China since 2005.

Wang Hao, China Institute for Water Resources and Hydropower Research
Dr. Wang has been engaged in research on hydrology and water resources for 30+ years. He joined China Institute of Water Resources and Hydropower Research in 1985 where he currently directs the Water Resources Department. He has won numerous scienfitic awards and recognition from the Ministry of Water Resources for his research and service to hydrology and water resources science in China.

Key Points

There has long been debate on whether it’s right or wrong to build large amounts of dams. Dr. Wang addressed the necessity at the forum of building dams in China for 4 reasons: national demand, national energy security, and demand of climate change, and natural disster relief.

An estimated population of 1.5 billion by 2020 and the urbanization progress demands large quatity of water and electricity; the existed water shortage in 400+ cities in China largely counted on dams for water supply; Tsunami accident in Fukushima raised great concern on the unpredictable and uncertain nuclear power plants leaning to hydropower plants.

However, there are problems and various issues in dam construction and operation: insufficient attention to imigants; interdiction of fish migration; long-term operation safety. Thus, China faces challenges such as the goal to reduce 40%-45% of CO2 by 2020, to increase storage capacity per capita, and to take better care of immigrants near the water area of dams constructed, etc.

Mr.Doug Smith and the Internatinal Hydropower Association has developed lots of acitivities in China, and been fousing on the Hydropower sustainability Assessment Principal, the frame of hydropower sustainability, which procedures along early stage, preparation, implementation, and operation of dams. Preparation stage, for instance, involves environmental, economic, and social aspects. The case of Shuibuya Trail assessment is one of the successes of the frame.

Ms. Desiree Tullos emphasized the decision support tool, silience, and the size that matters in the design, construction, and operation phases of dams, and said we should integreated biophysical, socioeconomic, and geopolitical axes into these different phases alsong with sustainability priorities.

More information can be found at: http://www.wilsoncenter.org/event/dams-and-sustainability-china

Jie Zhou: Heavy Metal Pollution in China

Heavy Metal Pollution in China

In the sense of environmental pollution, heavy metals are described as metals & metalloids which are distinctively toxic to organisms and environment. Cadmium, lead & mercury are commonly cited as being of the greatest public health concern.

China’s 12^th 5-year-plan which is passed earlier this year has a concentration on tackling heavy metal pollution. According to the plan, there are 14 provinces and autonomous regions severely polluted by heavy metals, and are critical to take action immediately. Most of them are located in the southern part of China.

There are two origins of heavy metal. Geological background level of heavy metal is low in China. Most of the natural resource contains some sort of heavy metal itself. While generation of heavy metal through human activities is high, causing pollution to air, soil, and water from 3 sources:

Industry emission is the main source of heavy metal pollution in China. The emission of heavy metals is from smelting, coal burning, purification of metals, fuel burning, and tire wear.

Wastewater irrigation is another main source of heavy metal pollution. During the development of mining, zincification, stabilized compounds of dye and plastics, colorants in oil paint and the tire manufacturing industry, they produce tons of wastewater, either merge into rivers, or penetrate soil in farmlands. Wastewater irrigation is very common in China, especially in the northwestern area, where there is a lack of water resources.

The third source of heavy metal is Solid Waste referring to fertilizing sludge, usage of the chemical fertilizer, and agro-chemicals increased heavy metal pollution; wasted electronic equipment also generates emissions of different kind of heavy metal, which harm human health.

A very basic Strategy to prevent public health from heavy metal pollution is to curb the pollution source. The Chinese government has made regulations in controlling the emission of heavy metal. Corporations which have not undergone the related assessment, for example, will be forced to discontinue production until they can meet such requirements.

Controlling and improving contaminated resource is also important. Methods for contaminated soil are in 4 categories: Physical, Biological, Chemical, and Agricultural method.

China’s State Council recently passed the “Twelfth Five-year Plan to Combat Heavy Metal Pollution” requiring that pollution from heavy metal emissions in critical areas be reduced by 15 percent, compared to 2007, by the year 2015. For all other areas, the pollution levels from heavy metal emissions should not exceed the levels reached in 2007.

Haiya Zhang: Brief research into Hydroelectricity

Brief research into Hydroelectricity

Basic concept: the production of electrical power through the use of the gravitational force of falling or flowing water----Renewable, mostly used among all renewables

Different Sizes

Large or specialized industrial facilities: over a few hundred MW to over 10GW (10,000 MW).

There are only three hydropower station that produces more than 10GW: Three Gorges Dam (22.5 GW), Itaipu Dam (14 GW) between Brazil and Paraguay, and Guri Dam (10.2 GW) in Venezuela.

Small, micro, and pico

Advantages:

Low economic cost compare to other renewable energy generation, low CO2 emission, and multi-functional: flood control

Disadvantages:

Permanent ecosystem and land damage, siltation, short flows, methane emission, relocation (Three Gorges Dam takes 20 years), poverty and corruption, failure hazard etc.

Ten of the largest hydroelectric producers as at 2009.[31][32]
Country	Annual hydroelectric production (TWh)	Installed capacity (GW)	Capacity factor	% of total capacity
China	652.05	196.79	0.37	22.25
Canada	369.5	88.974	0.59	61.12
Brazil	363.8	69.080	0.56	85.56
United States	250.6	79.511	0.42	5.74
Russia	167.0	45.000	0.42	17.64
Norway	140.5	27.528	0.49	98.25
India	115.6	33.600	0.43	15.80
Venezuela	85.96	14.622	0.67	69.20
Japan	69.2	27.229	0.37	7.21
Sweden	65.5	16.209	0.46	44.34

In China’s 12^th five-year plan, hydroelectricity and thermal energy are on the top energy solution list.

Case study: Salween River

Origin: Qinghai, Tibetan plateau

Flow through: Yunnan, China

Significance: Battle field of World War 2

           Boundary water between Burma and Thailand

           Biodiversity and habitat of indigenous people

From the origin to the mouth: 5,400m difference in elevation--- huge potential for hydropower plant

Chinese government has proposed hydropower plant construction in 1970s. Thailand and Burma also have plans to construct dams to produce hydroelectricity. China has proposed 13 dams on the Salween through Yunnan, some of which lie within the Three Parallel Rivers World Heritage Site. Objections were raised, and construction was then suspended. Until recently, the central government announced that instead of building a 13-dam hydropower plant serie, only a 4-dam one will be constructed outside the World Heritage site.

On the Burma side, there was military offense against Local Karen people in order to start the project in 2007. Earlier in 2011, Karen people had an uprising and protested against the construction of the dam on Salween River in Burma.

Hydroelectricity: popular on energy, economical and political level; not so friendly from the environmental and social perspective. Many aspects need to be taken into consideration, but many hydropower plant constructions do not even have EIA done, or only done poorly because some are too eager to have the project built.