On Our Radar: China’s Happy Distraction

15 Jun 2011 – Mohammed Al-Shawaf

For more than two decades companies have valued our ability to serve as their early warning system, to interpret what is happening in the world today and how it may impact their business tomorrow.

Our “Radar” services range from the general – monthly cross-industry trending digests – to the bespoke – tailored analysis of the most critical emerging issues to your business, and recommendations on how to tackle them.

This is the third in a series of blogs giving a glimpse of what’s on our radar. If your company could benefit from an early warning system, to identify key threats and opportunities as you navigate the rapidly evolving sustainability landscape, please contact us.

China’s Happy Distraction

What’s a government to do when, as a recent UBS report put it, “Top soil is collapsing to dangerous levels and its fertility is being destroyed by acidification [while] water is being consumed way beyond sustainable levels…and most importantly, China is exhausting its own fuel supplies extremely rapidly.”? On May 30, a report released by the Shanghai Municipal Meteorological Bureau found that Shanghai is in the throes of its longest dry period in 138 years. The National Development Reform Commission, which sets energy prices in China, announced the following day that electricity tariffs for commercial users would rise in 15 provinces, the first such increase since November 2009. The rise comes against the backdrop of a 12% increase in electricity consumption from the same period last year. And it’s not just the ecosystem and energy production/consumption that are on the brink. As the same UBS report notes, “fixed asset investment in real estate has risen 35% in the first four months of this year but property sales are very weak,” uncomfortably reminding investors of the pre-bubble U.S. market. All this without even mentioning the anxiety and ensuing repressiveness the country has employed to stamp out an Arab Spring “East.”

Is it any surprise then that the Chinese government, seeing an economic slowdown and the potential for civic unrest nearing, has begun to experiment away from its traditionally GDP-based premise? Namely, by getting happy. On the heels of Premier Wen Jiabao’s New Year’s address, which proclaimed that “Everything we do is aimed at letting people live more happily and with more dignity,” the government has rolled out a happiness campaign complete with happiness surveys and promotions. Chongqing wants to be “the central city of the country where people have the strongest feelings of happiness.” The party secretary of Guangdong province wrote in an article, “Happiness for the people is like flowers. The party and the government shall create the proper environment for the flowers to grow.” But if a Gallup poll in April, which ranked China 92nd out of 124 countries on “well-being” indicators (on par with Egypt, Libya, Yemen and Bahrain), demonstrates anything, it is that China’s “environment” is in need of much stronger stewardship.

The first in our Radar series: Green Marketing Is… Contested

The second in our Radar series: Renewables’ High-Stakes Proving Ground