China Grabs West's Smoke-Spewing Factories

By Joseph Kahn and Mark Landler | The New York Times
December 21, 2007

HANDAN, China -- When residents of this northern Chinese city hang their clothes out to dry, the black fallout from nearby Handan Iron and Steel often sends them back to the wash.

Half a world away, neighbors of ThyssenKrupp's former steel mill in the Ruhr Valley of Germany once had a similar problem. The white shirts men wore to church on Sundays turned gray by the time they got home.

These two steel towns have an unusual kinship, spanning 5,000 miles and a decade of economic upheaval. They have shared the same hulking blast furnace, dismantled and shipped piece by piece from Germany's old industrial heartland to Hebei Province, China's new Ruhr Valley.

The transfer, one of dozens since the late 1990s, contributed to a burst in China's steel production, which now exceeds that of Germany, Japan and the United States combined. It left Germany with lost jobs and a bad case of postindustrial angst.

But steel mills spewing particulates into the air and sucking electricity from China's coal-fired power plants account for a big chunk of the country's surging emissions of sulfur dioxide and carbon dioxide. Germany, in contrast, has cleaned its skies and is now leading the fight against global warming.

In its rush to re-create the industrial revolution that made the West rich, China has absorbed most of the major industries that once made the West dirty. Spurred by strong state support, Chinese companies have become the dominant makers of steel, coke, aluminum, cement, chemicals, leather, paper and other goods that faced high costs, including tougher environmental rules, in other parts of the world. China has become the world's factory, but also its smokestack.

This mass shift of polluting industries has blighted China's economic rise. Double-digit growth rates have done less to improve people's lives when the damages to the air, land, water and human health are considered, some economists say. Outmoded production equipment will have to be replaced or retrofitted at high cost if the country intends to reduce pollution.

China's worsening environment has also upended the geopolitics of global warming. It produces and exports so many goods once made in the West that many wealthy countries can boast of declining carbon emissions, even while the world's overall emissions are rising quickly.

The Ruhr Valley city of Dortmund, where ThyssenKrupp once made steel, still suffers from high unemployment because of the loss of jobs to lower-cost countries like China. But Germans can buy Chinese-made iPods, washing machines and cargo ships at prices that, because of lax pollution controls, do not reflect the toll on the environment. And the outsourcing of polluting industries has given them cleaner air and water.

"It seems to me that China is making all the mistakes that we made in the 19th century," says Wilhelm Grote, an environmental regulator in Dortmund, who recalls washing his father's car as a child, only to see it immediately blanketed by soot. "They will find it is much more expensive to fix up later than to do it right from the start."

Having ignored the environmental consequences of its industrial binge for years, the Communist Party leadership now says it is determined to develop a cleaner economic model. Beijing has tried to enforce ambitious -- though so far unmet -- targets to improve energy efficiency and reduce emissions.

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