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Asia Today ISSN 1861-4604 Wednesday, September 26, 2018

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China shuts thousands of factories as pollution levels rise

Ministry of Environment sent inspectors to 10 provinces

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BEIJING, China - With much of the country plagued with pollution issues, the Chinese government has now finally launched a serious crackdown - enforcing its environmental laws.

In the unprecedented pollution crackdown, the country is said to have shuttered tens of thousands of factories. 

According to reports, entire industrial regions of China are being temporarily shut down,

Gary Huang, founder of 80/20 Sourcing, who connects foreign clients with China's supply chain explained, "So, basically, you're seeing these inspectors go into factories for surprise inspections. They're instituting daily fines, and sometimes — in the real severe cases — criminal enforcement. People are getting put in jail."

In 2016, China's Ministry of Environment sent inspectors to 10 provinces, where officials reprimanded, fined, or charged officials in more than 80,000 factories with criminal offenses.

Productions has been halted in entire swaths of Eastern China, prompting some companies to move entire supply chains to countries like India and Bangladesh to meet their orders.

Michael Crotty, president of MKT & Associates, a company that exports textiles from China said, ”It's a huge event. It's a serious event. I think many of us here believe it will become the new normal.”

Crotty explained that in his nearly two decades in China, he's never seen a crackdown of this magnitude. 

He said, “The consumers of China don't want red and blue rivers. They don't want to see gray skies every day."

Meanwhile, Archie Liu, general manager of MKT & Associates, estimated that 40 percent of China's factories have been at least temporarily shut down in the latest spate of inspections. 

He said, "After all, factories will be better, more sustainable, and more socially responsible after being inspected. It's better for our supply chain. Then we can tell Walmart, Costco, and other retailers of ours that we're qualified and that everything we make for Americans are environmentally friendly."

Welcoming the move, Shanghai environmental lawyer Peter Corne, managing partner at Dorsey & Whitney's Shanghai office, said, "This is better than a 100-percent pay raise for me. I was just dreaming about it. I never thought it would come true."

Corne added that what's most promising about this new enforcement are the new fees that are being imposed when factories, whose emissions are now monitored in real time, discharge more than the law allows.

He pointed out, "The implementation will be totally different. It won't be the environmental bureau that's implementing anymore. They'll just be monitoring. It will be the tax bureau that's implementing it."

Corne pointed out that this is crucial because China's tax bureaus are powerful entities backed up by rigorous laws that, when violated, are typically met with aggressive local enforcement. 

 

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