The Campaign to Clean Up China's Vital Waterway
A look inside China’s water risk and government initiatives aimed at protecting water quality of China’s longest river.
the Yangtze River basin sustained more than 1/3 of China China's population and served an economic zone that accounts for more than 40% of Chinese China's GDP. Over the past several years, China's government has announced a series of high profile initiative to protect an improved water quality along this mighty river. These new policies have far reaching implications for domestic and global producers and now like to introduce China Water. If director Deborah Tan, who will share a brief presentation, all rejoined ever shortly with another well known expert to discuss the campaign to clean up China's most vital waterway. Right, Thanks. Thank you for having me here. Super excited to be here. This sustainable forms today on have not heard you talk about the Yankee. But for those of you who are not familiar with China water, we're a think tank focused on embedding climate and water risk into finance and business so that we could make better decisions today for our water results tomorrow. To do this, we write macro and micro four pieces with work with the government of China for the G 20 when China hosted it, various banks, pension funds and also the Green Finance Association of China. Another bottle on onto the Yangtze. The river's actually defined Asia. Now, for those of you who are not so good at geography like me, this is the Yangtze River and gave you wondering which one is the gang? It goes all the way from the thing, Heidi Button Plateau to Shanghai on for some perspective, this is where we are boots. Can I go back? One? Yep. Sorry again. This is where we are sitting in union where the Yangtze River actually does a little u turn on Dhe thought flowing eastwards towards Shanghai. This is what the Yangtze looks like in your none on. This hasn't really been Photoshopped. It is. Yeah. You know, it is really a beautiful province, but this is what the river could look like. Not like the typical pollution polluted photographs that you sort of off the Yangtze River. And multiple policies have also been initiated to clean up this river on as president. He says last year we have to protect this river because we have to leave a team and beautiful river for China. So why is this that we have to do this? Because the Yangtze is too big to fail. This is the Yangtze River economic belt. There's lots of things on this river, so we're looking at about 175 cities, lots of coal fired power plants as well as Hydra polyp stations. There's also 130 million tons of rice grown in this region. But for those of you wondering where the Three Gorges Dam is, that's the big, round green circle. There's a lot of people on economy on this river. The belt, the actual over economic belt holds about 43% of China's population, at about 45% of China's GDP has generated just in this green area. And and this means that the Yangtze River economic belt has more people than the U. S. On Indonesia, and it generates more GDP than the whole of Japan and Canada. Hi there. Five city clusters in the region and even the feisty clusters has more people in America and generate $3.4 trillion worth of GDP. So there's a lot of stuff on this river and really think about it. As a country, it will be the third largest country in the world after the U. S. On China in terms of population, and they also have the third largest economy in the world as well the Yangtze River economic belt. It is also China's industrial hotman, multiple blood up actually made in this river and made in China. And as a result of this, there's also left a lot off pollution lying in this river, which we're trying to sort of like clean up at the moment. At the moment, they're 197 95 story industrial parks and this is going to be reorganized into live world manufacturing clusters. We're also going to reallocate some factories by 2020 just to sort of show the scale off the reorganization along this river. And this matters globally because this river has a big share off global critical raw materials as well as clothing. Now that the government has set multiple economic targets that tight to war to use an environmental use that may be not many of you are familiar with, and central government has also set aside trillions off billions off, then to sort of clean up this river alone, or we estimate about 2.1 trillion U. N dedicated, private and also private money dedicated to clean up. If you're interested in this, you can check out our report on this just released yesterday. I think there's some hard copies at the back there. For those of you who like hard copies, so basically, greening the river will bring lots of risks and will impact multiple industries. But it also provides us with a huge opportunity to really develop green growth along the river for the Yangtze to lead the way in the region. Thank you for listening. So to continue our conversation about the Yangtze. I'm delighted to welcome Ma Joon, founder director of the Institute for Public and Environmental Affairs here in China. So, Debra, thank you for that presentation in June. Thank you for being here as well. So I want to start with you. If you could give us a little context here, when and why did the government decide that this was a project that they wanted to undertake and prioritize? Yeah, it's such a pleasure to be to be in good night talking about the Yangtze River as Deborah mentioned how important this river is China. Everyone knows about that and if they sustained the current powerhouse of our economy and it's also the same. All the carries, all the all the hopes for the future development and also it's vital resource is 400 million people drinking water resources on DDE. But at this moment, the river is not in a good shape. I think not. The reason for the government to decide to make a priority for the young River conservation back 300 years ago. We know only troubles of the Yellow River, but now the young. But during the past 300 years, the you know, the one so come so so good, so excellent yuko system with a lot virgin forest that the operation the middle and lower rich with gold, Great lakes, you know that's not ecosystem has been damaged. You know, the logging off the trees and then he's like farming and reclaim. Made old is the lakes for farming to 1998. The torrential flood make prompt the Chinese government to issue the logging ban and then return the inside the huge and the links to water to trees and water. So with the equal system recovered a bit, we're phasing review challenges. At this moment, the number one is pollution. You know this river have 36% off. China's total water resource is only in this young river, 40% of China's total with what I've got dumped into this river, although it's tremendous in volume, so it can dilute and still maintain rather relatively clean. But we have three legs licked ay, who like then like Tahoe and like denture, which is not very far from here, very polluted and the young to river mouth. Coastal seas got polluted. The oldest pollution comes from the cities from the countryside, you know, the garbage of water, but also from all this lifestyle farming and from the from the chemical, fertilizer and pesticide. But most important is also from old. It's in that field park. You know, Deborah mentioned about them. Yeah, well, this park discharge not just no more pollutants, but talk, fix and having medals. And so the river. What equality is that? Great concern. And then the hydropower, You know, from the, uh, most worth most intensive hydropower development. Also, you know, have just Maur left, you know, in the in the process and that some of most of them completed. This also put a lot of pressure on by that fresh wood about diversity and also the self cleaning capacity. Right? And last, but not least, the diversion of the young river. We live in Beijing now. Every 10 cups of what we drink seven comes from the young river. So taking all the resources but return, you know we don't return directly here, but there are many other cities, including even the equipment you try to take by birth water for its own, flushing the lake as well. So I think this is the backdrop for President Xi in year 2000 and 16 came up with instruction. You know, it's kind of ah, somewhat shocking to all the local government, the instruction, you know, no more big development or excessive development. We should coordinate a grand conservation. Let's pause on that for a second. Do you want to come back? Thio Industry think that's a really important part of this conversation. But first, could you just talk briefly about why what happened on the Yangtze River has global implications, right? I think I just flashed through that just now. Basically, if you think about it. It's the heart off the gold global supply chain. If you look at the way we talked about chemicals earlier with doubt, if you look at our clothes, about 53% off global chemicals fibers actually come from the Yangtze River economic belt, right? So obviously, if these factories are moved around places the higher because you have to factor in environmental cost. Then you know that's going to significantly shift the global fashion industry, right? Another thing is that 50% of closer more than that is manufactured in the Yangtze River. Well within China. I also showed some critical war materials like Constant and Germany. And a sizable portion of this which is essential for our smart and Elektronik future, are also mind along this river. So that also has a heavy metal discharge implications and so on. And so, you know, we've also seen sort of price shops here when China has closed up some of these factories a spike into new prices on so on globally. So So I think. But you know, well, that will disrupt industries. You have a huge opportunity to to green in the supply chain. Yeah, I mean, what we're hearing from the company you work with. Yeah, we see that China, as the current biggest factory of the words, were now just manufacturing to meet the right on demand for our own people, but also manufacture for the for the entire ward. And in this process, much of the waste dump in our backyard and contaminate mating are water, air and soil and the, uh, Deborah mention about the chemical industry. Even with such a kind of a role material kind of industry, which is pretty upstream of the supply chain, we can still see so much off that global sourcing is coming from China were carrying where we're carrying the water for the work, you know, recently way we suffered. You know, there's there's definitely a catastrophe explosion happening China, you know, with a capital T over 600 people. You know that this is a chemical factory, and we bond behind that. It's not just, you know, it's a vital supplier to the global supply Ching and behind that is a major brands like like coupon, like the like, parents and Burke. And so we try to engage with them over again. We try to engage for four years without much response at this time. Finally, I think this this case helped them to recognize the importance toe waiting. So they have a coalition called together for sustainability. I think they recently just made a decision to tap into the data we compiled from the government monitoring and to look into the tier two. You know, all those intermediate, uh, manufacturers. Much of that is based in the Yangtze River basin. Because this, you know, it's easy Thio access water to discharge. And also this water shipping is the most cost effect. So what role are corporations being asked to play in the cleanup? To, you know, 2006 we bute a national pollution database to help you know, not just compiled it. What a quality data, but also old. It's a corporate compliance data started with 2000 But today, with the import mint getting more strengthens in China, our data reached 1.5 million over one million factories. We have their performance data. So we use that to engage with the factory with the global brands sourcing from China before the excuses that in China I don't know who are polluting who are not. But today, you know that no longer quite no, not not really. Remember the times when margin and I would try to get a global brands to engage in this solution mapping on, you know, I was gonna say that it has changed dramatically at the beginning at the beginning are quite easy. But today, you know, we have some of the leading global brand, such as Apple, Dell and the Vice and Sienna and Nike and Wal Mart and those leading brands they have into the data. The methodology is quite simple. They have a list of suppliers hundreds, sometimes thousands. We have a lift off violators comparing the two. They can identify the problem and use that to waiting. And so far, every week they can manage to motivate 70 Brent happening to our data. Not just the global brands I mentioned, but also the local brands, like Wow, way Like leaning like Lance. See a green property developer, you know, they happen to the data, and every week now they can motivate more than 100 on every 150 factories to come to an NGO like God to try to explain what went wrong, How they try to help the problem. They motivate them to go to a green transformation. So that total number is pushing towards 9000 at this moment. So it sounds like corporations are pushing on this problem. But, you know, Debra, I'd love it if you would talk a little bit about what the government doing to incentivize some of the different stakeholders to take action because, I think quite innovative. And some of the pilots that are in the Yangtze River in young province on waste water discharge permit trading to try and rein in pollution each. Each factory has a certain amount off this charge that you can use on when the government really sort of clamp down on this. Um, you could you could trade in this discharge if you needed to produce more goods. And so people were trading these permits. Andi, I think in Georgia will appear in a market a tradable market of over 2.4 billion U. N on Do you know originally that on exchange will eventually be made up for these thes permit trading. But in the meantime, being innovative Chinese using power bow to trade some of these permits. And so these pollution permits allow people to sort of tap the life on this because a lot of the small, smaller factories couldn't raise enough capital to upgrade. But if these trading permits have values, then you could take these permits to the bank and borrow off it so that you can actually find out your you're equipment upgrades. Okay, you have talked about this water nomics approach right where we're managing water in tandem with economic. How unusual is this is something we've seen before? Yeah, I think that this is a concept that all development countries ALS developing countries must use because most of us don't have that much water resource in Asia. And on top of it, we have climate change, which increases the uncertainty off the bear ability or availability of the resource. Andi are developing rapidly. And with rapid development often comes a lot of pollution on. You know, that also impacts our water resources. Right? So if you can't, if you don't have enough water, you have to grow your economy. Then the only way is to change how you grow your economy and setting targets more GDP per drop and more GDP on less pollution, but also this term of business unusual in circular economy. Right then, this becomes a month as opposed to a should have. You must do business unusual. You must grow your economy in a different way. On. I wouldn't say that this is not just for China, which is piloting this meeting. This it will be for the whole of Asia as well. Junior, what you see as the lessons for other global economies here Yeah, I think it's way we can recognize that in China, you know, the factory of the world. We learned the hard lessons that when we don't value our water when we even sometimes relax, our our environmental control is the way for competitive advantage. You know, we're suffering so tremendous. You know so badly from that on the business in some way, even if they try to do better. But with, you know, low cost of violation, it's very difficult. They just follow the rules off the market, you know, toe pollute and try to be more competitive. But together we can change the rules. And I think the government played the leadership role by strengthening the enforcement, you know, the past 34 years, central government send down tens of 1000 of the inspectors to try to hold accountable now just the local polluters, but also the local officials failing their duty. As a result, we got so much data and now you know, we used that to engage with the business, and some of them decided to weighing. It's very important for the leading brands to play that, you know, it's like playing the Chinese bragging Langton. You know, the head must turn before the hail could whack. Otherwise, you know, it's very hard. So when we try to meet you mentioned about Young, we have one of the, you know, discharge point. When I was there every day, £280,000 of Texas with water got into the Russians of the chin Down River and then the Hunger Bay. So we try to engage with those images that they kind of say that they couldn't do it because otherwise they will. They will lose their contract. Of course, the brands only want to buy from the chip it. But luckily, one after another, you know, first started with Gap and then you, Nick Lowe and h in them. And, uh, Mark spends. And finally Walmart five other engaged with it. Top 10 die house telling them if you don't change, then you're gonna lose business. Guess what? The breeze out. They spent a decent money to treat, you know, there with water every day. 40,000 times. We're talking about £12 million every year. Won't got discharged into the witch water. Right into the are clean water damage the clean water resources. Okay, let's see if we have time for one quick question from the audience. Anybody? We have one over here. If you could wait for the mic handler to get to you. Right. Uh, I think the discussion I haven't, uh, kind of ah, spent some time on this subject. I think you have touched upon quite a few areas, but perhaps one of the most important issue in the young river is really relating to the Chinese agriculture sector while we talk about the factory pollution. You know, this country spends three times more 40 lives to grow food. And, uh So how do you deal with that? Right. So I think unless there's a agricultural sector restructure. They figure out a way to grow the food without using so much fertilizer. I think you can do the other factories. And remember, 400 million people live along the and the bass in the residential wait and the toilet, including the agriculture. In many ways perhaps the most important pollutant for the river's life and industrial pollutes actually easier to deal with much more than a much easier than the agriculture, any rule of agriculture here. Yeah, I would, I would totally agree. Agree with you on that non force point where you can't actually see where where the pollution is coming from. That much harder to deal with on your right. Uh, the Yangtze River Basin economic belt grows about 2/3 of China's right. So it is important to national food security as well to sort of pie in agricultural pollution, which is typically over 50% off a total pollution naturally so, raining that in and maybe also changing agricultural practices is key. Yeah, I think we need a good labeling because eventually this whole thing, the change of our agriculture that's sustainable farming, it depends on the sustainable consumption. I think this is a great topic. And we need people to look out for organic food for sustainable farming. Otherwise, it's gonna be very difficult. According to statistics, 90% off the rural discharge comes from livestock farming. You know, centralized and individual farming. Great. Well, thank you both for talking about why the river's too big to fail. So appreciate it. Thank you.