China's Confucian Harmony with Nature: Timeless Wisdom and Boundless Opportunities

(A short note written for and published by the Asymmetric Threats Contingency Alliance (ATCA) dated 29 April, 2007)

His Royal Highness The Prince of Wales's thought-provoking and epochal Roscoe Lecture as circulated on ATCA came hot at the heels of the overwhelming scientific consensus in the latest Report of the Intergovernmental Panel on Climate Change. It was aired as Climate Chaos becomes high on the political agenda on both sides of the Atlantic and is recently being flagged up as a global security concern in the United Nations.

Interestingly though, instead of the language of divisiveness, of what and who have led to this global challenge and how the burden of response should be shared, HRH's intellectual plea is imbued with the vital concepts of Holism, Balance, Unity, Diversity and Cooperation, and of working with, rather than against, the grain of Nature.

It is also interesting that HRH used the words 'Harmony' and 'harmonic' no less than seventeen times. It is perhaps not so churlish to imagine that the Lecture should resonate well with China's recently revived political direction, and indeed national strategy, of 'Harmony', of 'building a harmonious society' and a 'harmonious world'. This ancient Confucian concept has long embodied the concept of harmony within the self, harmony in the family, harmony in the society and in the nation, harmony between nations, and harmony between Man and Nature.

But there is a major difference. For China and the rest of the developing world, the challenge is not just ultimate environmental security, but immediate and medium-term survival. It is therefore paradoxical that the West still seems to be leading much of the international debate.

As China's State Environmental Protection Administration Vice Minister Pan Yue points out, while China may have achieved economically in 20 years what has taken the West a hundred years, she is now facing all at once the environmental consequences equivalent to 100 years of industrial growth.

China is already the world's largest SO2 emitter and is feared to overtake the US as the largest CO2 emitter by 2009, if not earlier. All her seven main rivers and 25 of her 27 main lakes have become polluted. 90% of her cities have pollution problems and 500 million people do not have ready access to safe drinking water. 25% of her land is suffering from desertification. The Yellow River is running dry (as most of the world's largest rivers) due to increased irrigation, urbanisation, silting and climate chaos (Fred Pearce, When the Rivers Run Dry, 2006, Random House).

China is now very upfront with her environmental challenges. Her first-ever National Assessment Report on Climate Chaos (a 400-page multi-departmental meticulous research) was released on 26th December 2006. China's average temperature is expected to rise 1.3 -2.1 degrees Centigrade by 2020. Glaciers on the Qinghai-Tibet Plateau, a main freshwater source for China and a large part of neighbouring countries, are shrinking by 131.4 sq km per annum. Those in Western China are melting down by 27.2% by 2050. Extreme weather conditions including floods and draughts, are likely to lead to diseases, water and food scarcity. The Report calls for a dramatic transformation of China's development model.

Notwithstanding continuing local recalcitrance and initial disappointing performance, the Chinese leadership remains adamant that China's new-found drive in her latest 11th Five Year Plan (2006-2010) for balanced and sustainable development should succeed, including the energy saving (4% pa) and emission reduction (2% pa) targets per unit GDP. At a recent international press conference at the Fifth Session of the 10th National People's Congress on 16th March, Premier Wen categorically stated that despite China's impressive growth, he remained deeply concerned about the risks that China's current development is becoming 'unstable, unbalanced, uncoordinated, and unsustainable'. The recent shelving of a long awaited national 'action plan' on Climate Chaos may be intended to allow for a major re-think of strategies, policies and priorities in the wake of China's latest appointment of new cabinet ministers for land and water resources and for science and technology. This may also be intended to provide more room for manoeuvre in face of the recent elevation of the topic as a security issue in the United Nations.

Meanwhile, China is pushing ahead with her efforts in cleaner and renewable energies. She is building two nuclear power stations every year for the next 15 years. Her hydro-electric power is scheduled to grow form 108 GW to 290 GW by 2020, with a full potential in the region of 400 GW. Wind power, especially in Inner Mongolia, is planned to increase from 1GW to 30 GW by 2020 for up to 30 million households by 2020.There are some 30 million households using solar power, largely in Tibet, representing 60% of the world total. Photovoltaic energy is expected to increase from 65 MW to 2GW by 2020, to displace 40 million tonnes of coal every year. The NYSE-listed Chinese solar energy corporation Suntech has already made its founder China's 4th richest man with a wealth of USD 1.4 billion.

In addition, SASOL from South Africa has been signed up to build Coal to Liquid plants in Ningxia and Shaanxi at a total cost of USD 10 billion, designed to produce 10 million tonnes of crude oil by 2010 and 30 million tonnes by 2020, representing 16% of China's output.

China is already the world's 3rd largest ethanol producer, at 1 billion gallons per annum, from Heilongjiang, Jilin, Liaoning, Anhui and Henan provinces, where the use of gasohol is mandated. She is providing financial incentives for energy from non-food crops (including genetically-modified crops), waste and biomass.

China's green energy initiatives form part of a surge in green investments worldwide, totalling USD 63 billion in 2006. This compares with USD 49 billion in 2005 and USD 30 billion in 2004. The growth has been 20-30% per annum and could provide the biggest job and wealth creation opportunity in the 21st Century [Economist, 18th November 2006]. Perhaps it is no coincidence that the United Nations is setting up a world carbon trading exchange in Beijing [Financial Times, 5 Feb, 2007].

Already the sands are shifting to promise a whole new concept of cars, if not to revolutionize the entire world's car industry. Toyota is developing a new generation of the cleaner-energy Prius. BMW is pioneering with hydrogen fuel cars. GM has announced plans to sell hydrogen-cell vehicles by 2010. Japan is planning a target of 50,000 fuel-cell vehicles by the same year. China has been financing R&D at USD 200 million per annum for the past few years to stoke her ambition of becoming a world leader in hydrogen-fuel-cell cars. A total of 172 prototypes and 87 hydrogen filling stations have already been created worldwide.

What is more, China is on track to open the world's first sizeable eco-city at Dongtan on Chiongming Island in time for the Shanghai Expo 2010. Other similar brand-new city and urban planning projects including eco-friendly transport systems are set to follow.

However, as more and more developing countries (China included) have to engage in water or energy intensive activities to generate income and employment and to continue lifting their millions out of poverty, boreholes are driven deeper and deeper into depleting or contaminated ancient aquifers and vast dams are constructed to appropriate water for irrigation for water-hungry cotton plantations for the textile industries or for the insatiable demands of burgeoning urbanisation. On the demand side, modern consumer capitalism reveals a never-ending hunger for the next fad or fashion. Mass-produced garments are getting cheap enough for ordinary urbanites to throw away after their first use for a new look of the next month. A recent business school study extols the commercial exploits of someone creating a small fortune making a new-style electric toothbrush. But look deeper and many needed jobs, livelihoods and economies are at stake. For many communities struggling to develop from the bottom, there may be no alternative to this form of market capitalism.

Western Enlightenment led to the birth of Capitalism. Questions are being asked whether we need a new form of Enlightenment, that of Harmony with Nature, if only for our own self-interested economic and ecological survival. The birth of a new Eco-Industrial Revolution in the 21st Century has already been mooted [21st C Management, Dr Matthew Kiernan, 1996]. There is increasing realisation of the validity of the Gaia Theory [The Revenge of Gaia, James Lovelock, 2006, Penguin Books], that Gaia selects her own balance, not dictated by Man. There is even suggestion of the need for a new Ecological Civilisation [Pan Yue, Vice Minister, China's State Environmental Protection Administration, February 2007].

I happened to be an invited Speaker on the subject of Climate Security at two different forums at the Royal United Services Institute (RUSI) on 24th April and at the Indian High Commission in London on 26th April respectively. I outlined aspects of energy geopolitics and their attendant environmental risks. I highlighted the fact that apart from fuel, water remained at the heart of regional conflicts including those over the Golan Heights and the West Bank as well as over Kashmir. I mentioned that dams created problems to other regions downstream and were liable to disrupt productive river ecosystems, such as the Mekong basin, on which the livelihood of millions in neighbouring regions depended. They also caused or aggravated floods in extreme weather conditions. I mentioned, by way of example, the recent revival of the simple ancient art of rainwater collection, which could alleviate water demand by say 30%. I explained that in the final analysis, it is more than a question of security. It is a question of development according to the particular needs and circumstances of different countries and regions. And there should be no one-size-fits-all formula that can be imposed. Above all, 'Three Billion New Capitalists' [Clyde Prestowitz, 2006, Perseus Books Group] are now industrialising at the same time in a new Global Industrial Revolution of the 21st Century. In an inter-dependent but increasingly resource-stretched world, cooperation (rather than coercion) is the key. In the Gandhi Room I was inspired to suggest that both the eminent Indian sage and China's Confucius extolled Harmony, including harmony between peoples and working with Nature.

When I spoke, I was ignorant of the wisdom of HRH's Roscoe Lecture. Had I read his speech, I would have been able to make my points with greater intellectual force. Indeed, as China continues to face increasing international unease if not mistrust with her avowed 'Peaceful Rise', she may well benefit from HRH's intellectual wisdom in refining her intentions in embracing Harmony with Nature. This should help her strategy resonate even better in both Western and Eastern civilisations.

What is more, the stage is now set for a paradigm shift towards more eco-friendly philosophies, economies and lifestyles calling for more cooperation in combating Climate Chaos in our Global Village. As ventured in my recent article 'China and the Middle East: an Eastern Alchemy for Global Harmony' [ATCA, 17th February, 2007], China could well benefit technologically, financially, and geopolitically by investing part of her huge foreign currency reserve in global responses to Climate Chaos in partnership with countries with the relevant technologies and business expertise including Japan, the EU and the US. Additionally, she could set an example of cooperation with the Middle East in tackling global issues by partnering with the Petrodollars.

HRH's exposition of the importance of Harmony with Nature cannot be more timely. In this new Century, it is becoming ever more urgent to embrace this timeless wisdom as much as its boundless opportunities.

Andrew KP Leung, SBS, FRSA

www.andrewleunginternationalconsultants.com

Personal email: andrewkpleung@hotmail.com

China & ME -- An Eastern Alchemy for Global Harmony?

(A short note written for and published by the Asymmetric Threats Contingency Alliance (ATCA) dated 17 February, 2007. Also published on the restricted ATCA distinguished list and added to "Open ATCA" at the "IntentBlog" based in Los Angeles, California, as well as Mumbai,India)

In a world awash with liquidity, there have emerged two noticeable mountains of gold in the East: China's stupendous foreign currency reserve of USD 1.1 trillion growing annually by some USD 200 billion, as well as the vast build-up of Middle East petrodollars due to rising energy prices.

China's huge reserve is heavily invested in US Treasury bonds earning an unenviable rate of return. While this is considered by some to enable China to gain leverage against the US, China is paying a hefty price in terms of serious currency risk, allegations of trade and currency manipulations, saving too much and spending too little, and missing out on opportunities to bring about a better outcome for herself and the rest of the world. As I was penning this submission for ATCA, I saw CNBC Europe featuring a debate with a Heritage Foundation Senior Fellow arguing on one side that the US should close the doors on a recalcitrant China.

So it is not surprising for Anatole Kaletsky in The Times recently to report that China has just approved the creation of a State Foreign Exchange Investment Corporation with a diversified mandate to better manage China's huge reserve, with an initial allocation of USD 210 billion to investment in equities, a sharp departure from concentrating on investment in US bonds. As he perceptively points out, this would have momentous impact on the shape of the global investment market.

What could perhaps be even more momentous beyond just the global investment market is the ensuing huge window of opportunity for China to address some of her own most gripping problems as well as those of the world. She could invest her mountain of gold in global sustainable development including responses to Climate Chaos so sharply focussed by the recent Report of the Intergovernmental Panel on Climate Change (IPCC).

With all her seven main rivers and 25 of her 27 largest lakes already polluted, China is set to overtake the US as the world's largest carbon dioxide emitter by 2009. The situation is so dire that it is threatening the productivity, livelihood, health and safety of millions of people in her cities and countryside. Hence the firm directives in her 11th Five Year Plan (2006-10) for 2% pa reduction in carbon emissions and 4% pa reduction in energy consumption per unit GDP and her urgent pursuit of alternative and renewable energies in an overall strategy for sustainable development.

But much more yearns to be done. The conundrum is that if the American Dream of fossil energy consumption per capita were to apply to the billions of masses in the vast developing countries like China and India, not only would the world not be enough, but the resulting "Climate Shift" from "Climate Chaos" would be unthinkable.

What is more, much of the world's energy is wasted. China, for example, uses seven times more energy per unit GDP than Japan, six times more than the US, and even three times more than India. Just by attaining the energy efficiency standards in Japan will expand the world's energy capacity many times over.

To rise to the Energy challenge, the world desperately needs better and more affordable technologies for clean and efficient energy. We need them in coal-mining safety, coal-to-liquid (CTL) processes, carbon sequestration, and the development of bio and mixed fuels, biomass, and a host of other renewable and green energies, ranging from solar panels and cells to hydroelectric, wind and tidal powers.

The motor car, the symbol of Industrial Revolution, also stands at the threshold of a green revolution. Toyota is developing the next generation of even more fuel-efficient Prius models. BMW is experimenting with hydrogen-fuel cars that emit nothing more polluting than water vapour.

A powerful driver for change is the customer. If environmentalism as a 'cool' lifestyle can catch on as fast as organic foods or the internet, it will work wonders in averting the risks of Climate Chaos. It will change the kind of cars we drive, the type of home appliances we use, the type of housing we inhabit, and the type of communities or cities we live in. Governments can hasten the process of change: for example, by planning energy-efficient neighbourhoods and by making public transport so cheap and efficient (as starting in Beijing from 1 January this year) as an offer that inner city-travellers can't refuse. The Toyota Prius and the world's first Eco-city-to-be at China's Dongtan could be harbingers of things to come.

China's huge domestic savings and foreign currency reserve thus provide her with a most timely leverage to play a leading and proactive role in global strategic investments in green technologies and sustainable development infrastructure, including rural and city planning. This could bring about an environmental sea-change not only for herself but for the entire world. Indeed, it could usher in what Pan Yue, Vice Director of China's State Environmental Protection Administration, recently termed a new Ecological Civilisation, based on energy-saving, moderate consumption, and harmony with Nature.

Moreover, such investments will open up vast areas of cooperation with countries possessing relevant leading technologies and expertise, including Japan, South Korea and India. This would also serve to enhance mutual trust, understanding and rapport with these nations.

On an even wider front, such investments could join forces with the other Eastern mountain of gold - the Middle East petrodollars. Apart from meeting the latter's desire for better and potentially more profitable investment channels, such partnership would asymmetrically magnify its mutual global impact. Furthermore, it would cement the already growing energy ties between China and the Middle East. Naturally, investments in developing answers to Climate Chaos will also enable the Middle East to gain positive international profile and recognition, not only for individual countries in the region, but for the world's Islamic community at large.

In fact, the promise of green technologies is already attracting a surge of investments worldwide, particularly in the US and Europe: a global total of USD 761 million in 2006, up 50% from 2005. The Economist reported late last year that aggregate investment in clean energies reached USD 63 billion in 2006, up from USD 49 billion in 2005 and USD 30 billion in 2004. Clean energy business is predicted to grow by 20-30% a year for at least a decade. It could prove to be 'the biggest job and wealth creation opportunity of the 21st century.' A sign of the times is a joint plan by the United Nations and China to set up a carbon trading exchange in Beijing to handle a multi-billion dollar global trade in carbon credits according to The Financial Times earlier this month.

A dramatically increased investment drive by China in green energies and sustainable development worldwide will therefore open many doors for international partnership with the West's best financial, technological and entrepreneurial talents. This will also help hone China's much needed international business savvy.

Similarly, China's investments in green or renewable energy infrastructure not only at home but also in other developing countries will improve income and livelihood for the rural poor. This will help reduce the socio-economic tensions in some of those countries which are often the root cause of their instability. This may also help many less developed countries to build up their capabilities in search of their own destiny. This would mitigate some of the tensions of Globalisation as outlined by Joseph Stiglitz [Globalisation and Its Discontents, 2002 and Making Globalisation Work, 2006].

Furthermore, such investments will help reduce the size of China's foreign currency reserves, provide meaningful and potentially profitable outlets for her huge savings, alleviate unwanted pressures for the RMB to appreciate too much too soon, and redress some of the world's financial imbalance.

Viewed in such broad context, dynamic efforts by China to address the world's burning issues may serve to overcome her continuing international image problems, especially in the West, in spite, or because of, her meteoric Rise. These problems are vividly flagged up by Joshua Cooper Ramo, author of 'The Beijing Consensus', in his latest report 'Brand China' [Foreign Policy Centre, 2007].

Through constructive and creative investment of her enormous 'Cleopatra's Dowry' in response to global issues, China, along with her possible partners worldwide in the West and in the East, including Japan, South Korea, India and the Middle East, will stand to gain much more than profits. For China especially, she would consolidate her rightful place as an even more respectable leader and stakeholder in the Global Village. Additionally, she would be able to use her Soft Power even further in the quest for a World of Harmony: harmony between nations and peoples as well as harmony with Nature.

There is an exact Chinese equivalent to the expression 'Killing two birds with one stone'. Evidently many birds can be killed with this gigantic stone. More importantly, this may stand a good chance of becoming a touchstone for an Eastern Alchemy for Global Harmony.

On 26th December, 2006, a most timely report was released by China's Ministry of Science and Technology, the China Meteorological Administration and the Chinese Academy of Social Sciences: the country's first-ever National Assessment Report on Climate Chaos. According to the report, the average temperature in China will rise 1.3 to 2.1 degrees Celsius by 2020. Glaciers on the Qinghai-Tibet Plateau are shrinking by 131.4 square kilometres annually, twice the size of downtown Beijing. Those in western China would be melting down by 27.2 % by 2050. These and other abnormal trends are expected to lead to an ecological catastrophe with much higher risks of floods, droughts, disease, water and food scarcity. The report calls for a dramatic transformation of China's development model by fully embracing efficient, clean and renewable energies and achieving the national goal of building a modern well-off society by 2020 based on sustainable development.

Following the overwhelming scientific consensus in the latest IPCC Report, it is evident that the time to act is now.

Andrew K.P.Leung, SBS, FRSA

www.andrewleunginternationalconsultants.com

Personal email: andrewkpleung@hotmail.com