Environmental Challenges in the People's Republic of China and Scope for Bank Assistance

Abstract

This paper shows that the steps that have been undertaken by the PRC Government are in the right direction. At the same time, given the country's severity of the environmental problems, the paper emphasizes that the reform process aimed at containing degradation of natural resources need to be further intensified. Strict enforcement of policies is required to arrest farmland damaged by soil erosion, desertification and salinization. Policies must address atmospheric pollution problem caused by, among others, carbon dioxide and sulphur dioxide from massive coal burning, and water pollution caused by discharge of industrial wastes. The pricing policies of natural resources must reflect proper economic and scarcity values, and the country's level of science and technology need to be upgraded to effectively deal with environmental concerns. The paper emphasizes the need for the Bank to support these efforts of the Government and to ensure that rapid economic growth will be ecologically sustainable. The paper concludes that apart from providing capital assistance, the Bank needs to help the country in establishing an appropriate policy environment that will encourage efficiency in the use of natural resources and help build up the institutional capabilities of agencies engaged in environmental protection and improvement. The paper comprises six chapters. Following the introduction, Chapter II provides an overview of the state of the natural environment in the PRC. Chapter III focuses on the institutional, legislative and administrative framework for the environment and discusses its appropriateness. Chapter IV presents the PRC's strategy for the environment as spelled out in the Eighth Five-Year Plan. The role and scope for the Bank assistance to support the environmental protection in the PRC are dealt with in Chapter V, while Chapter VI provides a critical assessment of the Bank's approach to the environment protection in the PRC.