The end of growth: China leads the way

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In the second of a three-part series, we look at how how China is hitting the limits of economic growth faster and harder than any other country. Little wonder that they are aggressively pursuing clean technology and other measures to reduce the impacts on the environment and to respond to a limited resource supply.

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In Part 1 of this series, I argued that it was time to face the reality that economic growth as our model of progress was slowly but surely coming to an end. China is perhaps the best example of all this, exaggerating all that is good and bad about the growth model.

We have seen spectacular rates of growth in recent decades and with it, many hundreds of millions of people being brought out of poverty. These people are now enjoying the fruits that global growth has delivered to many of us over the last century, in technology, health and easy access to food.

On the other hand China has paid an enormous price for this growth, in air pollution, degraded soil quality, increasing inequality, spoiled waterways and longer term risks to food supply through falling aquifers. It is now even taking from the USA the ignominious title of being the world’s largest current contributor to climate change (though we mustn’t forget China’s per capita emissions, the only fair comparison, are still dwarfed by the pollution rate in OECD countries, especially Australia and the USA).

So China sums up the paradox of the global economy, and provides an accelerated and exaggerated example of the global problem. On the surface the growth model seems appealing, indeed powerful and invigorating. Everyone who has witnessed the growth machine at work in China in recent decades comes away in awe and wonder at the pace and scale of its achievements.

China has now become the best example to demonstrates that the Great Disruption is underway – the state I’ve argued before we have now entered. In the same way China provides an exaggerated case of the good aspects of growth, they are now hitting the limits we are hitting globally, but doing so faster and harder, making it more noticeable and harder to deny. So unlike our political leaders, the Chinese leadership is slowly but surely facing reality. They observe their high growth rates, they observe both the degradation in their environment and the rapidly emerging limits to resource and food availability and they draw the obvious connection. As Prime Minister Wen told parliament recently, “growing resource and environmental constraints are hindering growth.”

The Minister for the Environment Zhou Shengxian gave deeper insights into their views when he said last year “in China’s thousands of years of civilization, the conflict between humankind and nature has never been as serious as it is today…. The depletion, deterioration and exhaustion of resources and the worsening ecological environment have become bottlenecks and grave impediments to economic and social development.”

You got it Mr Zhou – grave impediments to growth. They haven’t yet come to the conclusion that these are in fact “impenetrable limits to growth”. But they will.

Their response gives us good insights into the problems we are all going to face, but also to the considerable benefits our initial response will bring when it comes. As we hit the limits to growth we will desperately and aggressively pursue clean technology and other measures to reduce the impacts we are having on the global ecosystem and to respond to our limited resource supply. We will think this will be enough to keep growth going.

China is again a good example of what we can expect. They are doing all they can to slow down the cause of the problem with aggressive targets and action to clean up their economy, and the benefits they are gaining by doing so are considerable. They are even deliberately slowing down the rate of their economic growth, recognizing this is the primary cause of their problem, to give themselves more time to adapt.

As Tim Buckley argued on this site recently, in renewable energy, electric cars, high speed trains and many other areas China is investing heavily and looking more and more like it’s going to lead the world in this, the next industrial revolution. As well as raising their economic competitiveness, their approach is bringing considerable benefits to the world, with new energy technologies being taken to scale and prices falling as a result.

We can expect some sensational developments in this area, with tomorrow’s Googles and Microsofts all positioning right now across China to be the global winners in this epic opportunity. While countries like the US should be nervous in terms of their national competitiveness, for those of us concerned about the world and our future, China’s actions can only be good news.

But while this process will be an exciting and invigorating one to watch, with considerable upside, in the end China will face the same challenge the world faces. Infinite growth on a finite planet cannot work – not that this pesky logic will stop us from trying. In the final part of this series next week, we will consider how that conflict might unfold.

 

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6 Comments
  1. anthony bertini 8 years ago

    thanks for this Paul. it is a shame that Australia has not embraced the notion of being a significant exportor of innovation and solutions to China rather than just resources

  2. Michel syna Rahme 8 years ago

    I haven’t read your book yet Paul, but it really is on my list of things to ‘buy’. I will read it because I still disagree!

    I have the same simple question as last time and would appreciate a simple answer – will large scale war (or several + natural and introduced disease) and population decreases come before the true end of resource mixes for sustainable growth?????

    Could you please calculate what would be the ideal human global population that would be able to maintain growth, assuming we can evolve up to being able to implement and manage this, wiith the limited resources available on this planet?? (not just growth in producing and consuming junk but social, intellectual, technological growth – meaningful sustainable growth)

    Yes, we (excluding the ‘dumbified’ 50% of Americans/Australians – which I perIsonally blame based on good evidence Murdoch and his mates for this ‘dumbification’ which will end up being their problem) know our current system, with our projected population growth, is unsustainable but what is the outcome, the solution? (this is only why I am curious to read your book to see what your outcomes are? What are the possibilities you see? Because just ‘the end of growth’ is not enough Ay!

    What is the true potential for improvement in recycling techniques? What are the true opportunities for tree/food growth enhancement through genetic engineering (whether I personally agree with it or not – these days I am tempted to view these developments as ‘natural’ progressions)? Will resources for growth run out before we are able to mine other planets or migrate into space? Is equality realistic? Is equality essential if we look at our existance not from an individual level?

    Ha imagine if in 50 years all people, if they wanted to, could with their Doctors choose the genetics of their children… Imagine if they all chose to drop the gene that allowed them to be ‘dummyfied’ by Murdoch media like 50% of obese Yanks and Australians currently?

    Scientists know what the ideal band of atmospheric co2 concentrations are to maintain a more balanced climate? So what number do the scientists say is the ideal global population to maintain real sustainable growth based on an accurate as possible sum of all usable resources ( with some level of accounting for that which we have yet to discover or combine)???.

  3. Jake 8 years ago

    Mr. Gilding,
    If a private space company like SpaceX were to successfully harvest resources from an asteroid, would you consider that to effectively be a decoupling of economic growth from earth’s limited resources?

    Furthermore, in switching from fossil fuels to solar power, aren’t we effectively deriving economic growth from an external limitless source?

    I’d appreciate your thoughts.

    • Paul Gilding 8 years ago

      Jake

      It’s an interesting question the solar one. It does change the game but as I argue in my book, that will only solve the energy limit. While it will help other limits, they will still apply e.g. land. Again we end up at the difference between conceptual possibility and what will happen though. My key point is not about what’s possible but how it will unfold and that to me says crash first, then amazing things will happen.

      Paul

  4. Rob F 8 years ago

    This article shows the folly of compound growth for the next few hundred years http://physics.ucsd.edu/do-the-math/2011/07/galactic-scale-energy/

    • Alistair 8 years ago

      Thanks for the link, Rob. Nicely argued.

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