The answer to Chinese pollution? It’s in Japan

March 4, 2013, 11:43 AM UTC

FORTUNE — As Japan braces for a Chinese export it never asked for — toxic clouds of pollution — it is stepping up its green technology transfers in hopes they will clean the air.

Mending fences with its powerful neighbor wouldn’t hurt either. “Japan already helps China to reduce emissions of pollutants through technology transfer,” says Junko Edahiro, chief executive of Japan for Sustainability, an environmental NGO in Tokyo. “But there is much more to be done.”

Now, with hazardous smog threatening its coast, Japan is offering further tech know-how to an increasingly desperately polluted China. Recently, as part of a mission to improve bilateral relations and avert further aggression over disputed islands claimed by both countries, a new accord was signed that promises to increase sharing of pollution-control technology with China. Tokyo and Beijing have essentially agreed to facilitate technological cooperation in a bid to halt the appalling air pollution that is causing havoc not just in China but in neighboring Korea and southwestern Japan.

China has been slow to adopt measures to control pollution and enforce its clean air act. But increased social unrest in China over its environment has goaded the politburo into action. The recent revelation of so-called cancer villages within China and intolerable levels of city smog have only added to the pressure.

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It seems Japan is a perfect partner for China in its bid to clean up. After all, Japan had the same track record of environmental disasters in the 1960s and 1970s, explains Yoshihito Iwama, the environmental bureau director of the Japan Business Federation, known as Keidanren in Japan. Its plight was solved by creating new laws and technologies to deal with pollution. “We have experienced some of the same terrible pollution problems on our past,” he says. “And we have overcome such problems, especially those related to air pollution so we are ready to cooperate with China on sharing our anti-air-pollution technology.”

He also points out that Japanese factories already operating in China abide by strict environmental controls that could be a showcase for Chinese factory owners.

High on the agenda now is to prevent the disbursement of so-called PM2.5 air pollution — hazardous airborne particles only 2.5 thousandths of a millimeter across — that can penetrate deep into human tissue to cause serious health problems. Japan has the technology to help trace the origins of PM2.5 and to predict its disbursement, say Japanese officials.

While both governments iron out the details of the accord, private firms such as Sharp and Panasonic (PC) have been reaping an unexpected windfall selling electronics in China that help purify the air. Sales of Sharp’s air purifiers — which China certifies “remove 99% of PM2.5” — tripled in January compared with the same month of 2012. “Awareness of health and environment among consumers in China has increased in the past few years, so our air purifiers are selling extremely well there,” says a Sharp spokeswoman.

Despite an informal boycott of Japanese goods in China, Kedieran officials insists that trade relations are still excellent between the two countries. Japan has extensive business interests in China and will benefit hugely in the supply chain if China does get serious about detoxing its landscape, say observers.

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Tokyo and Beijing city governments already cooperate through a technical exchange in waste and water management. Tokyo, the biggest city in the world, already has one of the most technologically advanced sewage and recycling systems anywhere. Such technology helped pull Tokyo out of the bottom of a United Nations list for clean cities to a place near the top.

Japan’s second city, Osaka, meanwhile wants to offer up its floating, solar-powered water purifiers that can each clean 2,400 liters per day in its sullied canal system.

Although Japan’s recent environmental record is not without blemish, the country’s technocrats are bullish that it can interest China in other green technologies such as its recently developed smart cities that help promote sustainable planning and development. Even Kawasaki, the “dirty old town” product of Japan’s spectacular, but unregulated industrial growth, now boasts an annual Eco Fair which promotes its homegrown environmental technologies to the world and is now host to Japan’s largest solar power plant.

Changes in China may not come so easily. The Japanese green tech industry may have official China on its side, but state-owned corporations and local vested interests could prove less tractable than industrial Japan of the ’80s. After a long fight, Japanese industry eventually buckled under Japan’s clean air acts enacted in the ’70s, despite the costs, thanks to persistent social pressure. Persuading a dirty but profitable China to take up Japan’s expensive new antipollution technologies may prove another task altogether.