I’m walking through a factory in the southern province of Guangdong. Little beads of sweat run down my back as I try to concentrate through the early summer heat.
It’s just my guide and me…and the buzz of machines. This buzz crescendos and decrescendos like a gnat circling my head. Every so often, I’ll see a human form dart by as I pass row upon row upon row of metal. Outside, though, I can still hear the birds chirping. There’s even a babbling river in the distance. As the grass sways in the morning breeze, I’m reminded of the pastoral images on early Communist posters.
Wait, we’re still talking about China, right? The horseman of the Apocalypse China, reigning down pollution and devastation on the world? The center of global commerce, where factories chug out plumes of smoke while people toil under duress, looking for ways to fling themselves off of tall buildings and end the horror? The China where dead pigs float down rivers running red with rust and green with chemicals? The China taking away jobs from millions of Americans and stealing our intellectual property to boot? That China?
Long derided for its negative impact on the Earth, entirely warranted to be clear, the country has been on an epic campaign to change this image. Until November, this was a gradual process. Starting over a decade ago, the Government decided it wanted to move from being the world’s cheap factory to a more advanced, green service provider. The first cut came down on thousands of underperforming state-owned enterprises. Factories in all sectors then started to feel the pinch of tightening regulation, audits, and pressure to upgrade. In 2013, President Xi began a campaign against “tigers and flies,” seeking out corrupt officials in public name-and-shame events. This past year was one of investment, as China became the world’s largest sponsor of green technology and biggest market in solar and wind power.
November 8th changed all that.
The Trump Administration seems dead set on destroying any progress towards a sustainable future. Many worry other countries will follow suit. The changing nature of geopolitics, from the rise of ultra-nationalism to a rebuke of globalization and capitalist systems, is ushering in a time of great uncertainty. For China, the path ahead is clear, and they are chomping at the bit. They know, when it comes to leadership on issues of climate, inclusion, and sustainability, in Trump’s America, they win.
In 2017, the world is going to see an emboldened China. This has nothing to do with the militarization of the region, although we’ll certainly see more underwater research drone incidents. In this Twilight Zone era, China is going to argue its moral, ethical, and practical positions mean it should take up the mantle of global leadership in sustainability. That’s an image shift any PR firm would be proud to have under their portfolio.
This will play out in three big ways.
Doubling down on environment
China has no intention of reneging on its public sustainability commitments. While the Trump Administration discusses how to pull out of the Paris Agreement, China is going to take the high ground. They’ll make sure they keep their promises. In reality, though, this has been the country’s direction for some time. The past several Five Year Plans have inched ahead from aspiration to action. The latest version gives specific targets and actions on environment, economic inclusion, and industrial development. In 2017, expect to the see the Government double down on these commitments.
The biggest environmental news of the year, though, will be the launch of China’s national carbon trading scheme. This will be the world’s largest cap-and-trade program, an evolution of pilots already underway in several cities. It will include the notorious coal industry and borrows from past national programs like those in the U.S. and the European Union. China loves to learn from others and then perfect what’s come before. Expect this scheme to be both the largest and most advanced the world has seen.
Putting the social back in socialist
We have to remember China is more than its Government. China is also its people. Although a socialist country on paper, in reality this is a dog-eat-dog place. There is pressure to compete and survive as inflation rises faster than wages. Motorbikes whiz through intersections, scraping by luxury cars that race up the road. They’re both in a hurry to make their next renminbi. Without Mao’s iron rice bowl, people are left to their own devices. Forget New York City. If you can make it here, you can make it anywhere.
Maybe this is why the World Giving Index recently named China the world’s least charitable country. Fresh college grads make around $390 a month. Take out living expenses, like the average $324 rent in the outskirts of Shanghai, and you’re not left with much to give away.
A few public examples, though, are helping Chinese citizens realize one can marry profit with doing good for society.
In 2017, expect social entrepreneurship to be the next big craze, as more people understand they can help society while helping themselves as well. Social entrepreneurship will also help fill gaps the Government is unable or unwilling to.
Embracing the slowdown
After 30 years of breakneck growth, the China miracle is starting to stagnate. 2016 was the slowest year of economic growth in a quarter century. Tightening Government regulation, a declining labor supply, and the rising cost of doing business have forced some companies to move operations to places like Vietnam. The domestic geography of industry is also changing as factories move their operations to lower-cost places in China’s western provinces. The Financial Times is reporting, for the first time, an uptick in migrants choosing to return to their home provinces rather than stay in the big cities on the east coast. A lack of work and high cost of living make home more appealing. Any shifts in this population – 246 million strong – and you’re going to see seismic repercussions.
These are not small issues to handle. Nor can they be subjected to protracted argument and debate. They need solutions, and fast. In 2017, we will see the Government use all its effort to ensure economic inclusion for the most ostracized populations. Not only is this a response to market demands, but a way for the Party to keep itself legitimate in the eyes of the people.
On their own, these three scenarios do not seem to mean much. Taken together, though, they paint the image of a new China antithetical to the U.S. we are seeing emerge. Sustainability, innovation, and inclusion used to be the hallmarks of the American way of life. In Trump’s America, though, it seems China is becoming that shining city upon a hill.