All The Green Eggs In One Basket: Why China Is Not The Bottom Line Of Offshoring Climate Change

Posted on 14. May, 2010 by Ross in Asia, Heavy Industry

Worried about China’s inexorable financial growth and exploding levels of carbon dioxide emissions?

Worry less about China and more about everyone else, as the most populous country on Earth starts to see the effects of one of global capitalism’s least popular phenomena: offshoring.

The growing strength of the yuan is starting to destroy the margins of domestic exporters, whilst neighbouring countries offer more competitive placements for industry as their own currencies fall behind. Manufacturers from toys to trainers, wardrobes to washing machines are all now looking at pouring across the border to Vietnam, Thailand, Bangladesh and beyond in search of cheaper labour costs and better export exchange rates.

Why does this matter to the environment? China and India are the major focus of the developed world in the international climate change negotiations. Most Western nations (apart from the USA) are making progress in their attempts to reduce their national carbon footprints, and hope to shackle China into making carbon reduction pledges of it’s own. China, despite resisting those attempts, is fully aware of the unsustainable nature of it’s growth and has become a world leader in renewable energy generation and clean technologies as it seeks to reduce domestic pollution as well as carbon emissions.

As a result, instead of being able to focus all their efforts in one place, environmental campaigners and climate change negotiators will soon find their attentions fragmented across a wider net of polluting countries, and for each one that comes on board with commitments to clean up carbon emissions another two developing countries will be queuing up to host dirty industries.

This is in the interests of developed world capitalism, which continually seeks to minimise costs by outsourcing to the cheapest place. It also benefits from ensuring that carbon emissions are created outside of the carbon-regulated world, again to minimise costs. It is easier and to reduce national carbon emissions by importing ‘dirty’ goods than clean up local manufacturing.

Indeed, this might be China’s major play in future climate change negotiations. By realising that it will lose some of it’s projected industrial expansion to local rivals as it’s economy continues to become wealthier and the exchange rate continues to hit exports, China might decide it can conform to slightly more stringent commitments than before by offshoring it’s dirtiest industries at the last moment, leaving it with clean energy supplies and cleaner remaining industries.

Image of Chinese industry by the Yangtze by eutrophication&hypoxia @ Flickr