The 4th Meeting of Phase II of the China Council took place in Beijing from October 31 to November 2, 2000. The meeting was attended by 76 council members, co-chairs of working groups and task forces, representatives from government, and special invitees and observers. It deliberated China's Western Development Strategies (WDS). At the end of the meeting, the Council adopted a regional approach within the framework of environment and development policy as a whole.

　　The development of China's western regions is a key strategy for the coming century. Sustainable development, and learning from lessons in China and abroad, will guide this project. The economy will not be developed at the expense of the environment; attention should be paid to the protection of natural forests and grasslands in the Yellow and Yangtze river basins; to the prevention of environmental damage rather than treatment when initiating development projects. China will rely on economic reform, as well as science and technology progress to strengthen environmental protection and to improve quality of life for Chinese people, said Chairman Wen Jiabao, Vice Premier of China's State Council.

　　In developing its western regions, China should avoid mistakes made by other countries, such as Canada, where development of western regions was concentrated excessively on economics and infrastructure and less on environmental problems until recently, pointed out Vice-Chair Len Good, President, Canadian International Development Agency.

　　Vice-Chair Liu Jiang, Vice-Chair of the State Development Planning Commission, noted that China's present emphasis on the WDS aims to promote economic growth, ethnic solidarity, social stability and reduce regional inequality. Emphasis will be placed on ecological construction, as China's major rivers originate on the Tibetan plateau. Presently, 80% of all soil erosion in China takes place in the west.

　　The WDS will present a real challenge for environmental protection, and that is why China is emphasizing integrated economic and environmental planning, said Vice-Chair Xie Zhenhua, Minister of the State Environmental Protection Administration. During the 10th FYP, China's population will continue to grow, while urbanisation and industrialisation will speed up and economic growth will continue apace. This will make it more difficult to combat environmental damage.

　　Other Agenda Items

　　In addition to the discussion of the western development strategies, the Secretariat presented its work report and the WGs and Task Forces submitted their annual reports to Council.

　　The Council meeting also listened to addresses of representatives from a number of western provinces, including Guansu Province, Sichuan Province and Inner-Mongolia Autonomous Region. Members also reviewed the report on WG co-chair's co-ordination meeting.

　　The Council's recommendations to the Chinese government were reviewed. It was noted that while the Council is focusing on the WDS during the meeting, environmental problems know no border, and that the Council should continue to address issues that are relevant to the whole of China. Based on this understanding, two draft documents were presented at the meeting. The first one was on the WDS to be submitted to the Chinese government. The second dealt more generally with China's environment and sustainable development to be presented directly to Premier Zhu Rongji. (These two documents will be available soon at www.harbour.sfu.ca/dlam/.)

　　It was noted the self-assessment of the CCICED completed during the past year reveals a consensus that the Council should continue to operate after Phase II concludes, although some relatively small changes are recommended to improve the effectiveness of the Council. Canada therefore intends to make a third five-year contribution to the Council, if the decision is made to continue into Phase III. A number of governmental representatives expressed their interest in continuing their support to the Council. A concept paper of the CCICED Phase III will be prepared by the Secretariat for discussion at the next Council meeting. It's hoped that multi-year pledges will be instituted by donors in order to improve the Council's ability to plan its programs and activities.

　　Next year will see the end of Phase II. All WGs should bring to a close their activities according to their Terms of Reference. This will allow for a smooth transition to a Phase III.

　　The Council's 5th meeting of Phase II will take place in Beijing on September 25 - 27, 2001. Prior to the meeting, a field trip to west China will be organized for Council Members.

　　COUNCIL MEMBERS AND CO-CHAIRS MEET WITH PREMIER ZHU RONGJI 

　　On the afternoon of November 2, 2000, the Council members and working group co-chairs met with Premier Zhu Rongji in the Great Hall of People in Beijing. During the meeting, several Council members made oral presentations and the Premier responded to the Council's recommendations.

　　Members were very impressed with China's progress in the area of environmental protection, in particular, public investment in this area which now stands at record levels. There is progress on environmental legislation; SEPA now has the status of a ministry.

　　It was noted that the development of western China represents a massive investment in order to promote economic growth, but this will happen in a fragile environment susceptible to soil erosion and other forms of environmental degradation. There is a need for comprehensive application of environmental impact assessment and for the establishment of an early warning monitoring system.

　　2001 will be the Council's final year for Phase II. There is a general enthusiasm for a Phase III and CIDA would support this effort. Were China to indicate its willingness for Phase III, CIDA is prepared to make a financial contribution in support of the continuation of the Council's work, said one of the members.

　　It was pointed out that both in a general sense and in the context of the development of western China, it should keep in mind the role of the government, the private sector and the citizen. For the WDS, the Government of China needs to do careful planning for transportation, emphasizing railways and the modernization of feeder roads rather than highway construction. Conservation of water and energy resources will be key. The role of the private sector is to work within the framework set by government, emphasizing implementation of such measures as cleaner production, and investing in responsible development. The role of the citizen depends on education and comes into play in consultations with government.

　　It is hoped that China will take a lead role on the world scene with respect to environmental issues. China, in choosing technologies for transportation and energy, should be thinking about leapfrogging to some of the options that are most realistic and promising, such as the use of fuel cells.

　　The west is home to most of China's poor population. In all measures devised to address economic development and environmental protection, it's important to ensure the livelihood of the poor and improve their quality of life. The interests of minority peoples in western China should be taken into account. This is part of the cultural heritage and human diversity of the region.

　　With accession to WTO complicating the fact that China is facing a critical period as it prepares to launch a major development effort in the west, China needs capital to support its development program. This underlines the need for careful planning, with attention to biodiversity protection and the people of the region.

　　There needs to be a strengthening of capacity in the energy sector, in order to allow China to integrate economic policies and environmental protection. Environmental industries are key to China's future growth and to the achievement of sustainable development. There needs to be better coordination between all stakeholders in the forestry sector in order to ensure successful reforestation and restoration of grasslands.

　　Members also felt the western development strategies should lead to the creation of jobs, therefore foreign and domestic investment in the region is critical. The legislative and administrative frameworks to encourage investment have to be reviewed. It's also important that China considers the west as part of the whole in terms of environmental issues.

　　Premier Zhu Rongji responded that the recommendations of the Council &endash; both submitted in writing and presented orally &endash; would be taken seriously. He assured members that Minister Xie would ensure the government receives all relevant documents. The Government of China is grateful to Council members for their work over the years.

　　Environmental conservation and sustainable development have become increasingly important to China, said the Premier. Understanding has deepened and investment to the environment has significantly increased. Chinese economic development has reached a stage where it can invest in environmental protection and implement sustainable development, although there is still a long way to go, said the Premier.

　　Zhu noted that over the past year Beijing suffered from severe sandstorms due to soil erosion in China, but this also affected Mongolia and Siberia. The sand particles reached as far as Korea, Japan and even Hawaii. China is now implementing measures to resolve this problem, even though this is difficult to remedy. Council's assistance in this regard will be welcomed.

　　He also mentioned that great progress has been achieved in Beijing in controlling air pollution. Beijing is now bidding to host the 2008 Summer Olympics, and the Premier is confident of Beijing's success. He hopes to see Council members come back every year over the next eight years, witness China's progress and keep submitting the Council's suggestions. He believes that in eight years, Beijing's air will be as clean as Sidney's.

　　WORKING GROUP UPDATE 

　　The Working Group on Pollution Control (PCWG) held its 7th meeting on November 9&endash;10, 2000, in Sanya City, Hainan Province.

　　The meeting reviewed progress of a CO2 emission mitigation project. This work has four sub-projects: 1) CO2 emissions inventory, which is divided into energy consumption and industrial emissions; 2) evaluation of China's mitigation policies in the past and their effects, particularly its efforts of energy conservation; 3) Energy Modeling/Policy Options; 4) Analysis of the impacts of energy policy on pollution discharge including SO2, CO2, NOx, and fine particles. A new sub-project on a demonstration on Clean Development Mechanism (CDM) for a factory, a region, or nation-wide will probably be launched. The essence of CDM is to compare different costs for each possible mitigation measure and determine the most cost-effective ones.

　　Another research project undertaken under the direction of PCWG&emdash;water pollution control in the Pearl River Delta&emdash;was also reviewed. Presentations on health effects of air pollution and on the Workshop held in Guangzhou on air pollution were also made. An inventory of air pollution emissions in the Pearl River Delta region was presented by the Guangzhou Institute of Environmental Protection.

　　Two WG meetings are planned for 2001, one likely in the Netherlands in May and the other in Kunming, Yunnan Province, on December 17&endash;19, 2001. It was emphasized that the CO2 mitigation project should be completed by the next China Council meeting. Collaboration with the Sustainable Agriculture WG (SAWG) on agricultural pollution control, especially in the Pearl River Delta region, and work on survey of the environmental situation in west China were also proposed.

　　The Working Group on Trade and Environment convened an informal meeting on November 3 in Beijing.

　　The meeting mainly discussed new research projects for the next year. Several topics were proposed including timber trade, fishery trade, trade liberalization and China's fishery, China's WTO accession and its impacts on the environment, and policy instruments for cleaner technology transfer under the Clean Development Mechanism.

　　Members felt that China's accession to the WTO and trade and environmental impacts should be given sufficient attention. There is a need to review WGTE's work in the past seven years. It was also suggested that the WG should consider a strategic plan, given the enormous interest in keeping the WGTC in Phase III of CCICED.

　　A proposal on China's WTO accession and its environmental impacts was discussed. It was proposed that the study use the CGE model to assess environmental impacts of WTO accession, including regional, sectoral, and time dimensional impacts of China's WTO accession. Given that detailed work on assessment of environmental impacts (including the WTO/cities proposal and the modeling proposal by PRCEE) requires a careful review of the emerging literature on environmental assessment of trade agreements, it was suggested that a review and evaluation be undertaken in light of Chinese capabilities and the availability of data, and develop methodology needed for further assessment as a first step.

　　It was also suggested that the most detailed assessment be undertaken on the structural effects of WTO accession on the relevant markets &endash; down to species and likely production areas if possible &endash; with identification of possible environmental issues (but without any attempt to assess them).

　　At the invitation of Heilongjiang Province, the WG will hold its next meeting and a workshop on trade and environmental issues related to WTO accession (similar to the Wuxi workshop) from May 22 to May 26 in Baoquan County, Heilongjiang Province.

　　NEWSBRIEFS 

　　China to Expand Environmental Financing 

　　China will actively expand financing toward environmental protection during the Tenth Five-Year Plan period (2001-2005). In addition to governmental investment, the major source of environmental funds, China will encourage enterprises, the private sector and overseas capital to invest in environmental infrastructure construction, management and industrial pollution control.

　　A lack of funds has been a long-term problem restricting China' s development of environmental protection. China's environmental investment only accounted for 0.72 percent of the Gross Domestic Product (GDP) from 1986 to 1990, and 0.8 percent of GDP from 1991 to 1995. The ratio increased to around 1 percent from 1996 to 1999.

　　Experts predict that China's environment could not be radically improved unless the ratio is above 1.3 percent, which means a huge investment in pollution control. A multi-channel environmental financing system needs to be set up in China to meet the demands of environmental protection and economic development. (People's Daily Online, 11/24/00)

　　Forest Protection Plan Revealed 

　　China will carry out a long-term campaign to protect China's forests over the next 10 years with the support of a 96.2 billion yuan (US$11.6 billion) special fund. The central government will provide 78.4 billion yuan (US$9.4 billion), or 81 per cent of the total funding for the project. The remaining funds will be provided by local governments.

　　It aims to protect virgin forests along the upper reaches of the Yangtze River, the upper and middle reaches of the Yellow River and in Inner Mongolia by 2010. The plan has been officially approved by the State Council.

　　Over the next 10 years, the project will help control flood-prone rivers, limit desertification, accelerate environmental improvements and promote sustainable development. Under the project, a strict logging ban will protect more than 61.1 million hectares of natural forests in the Yangtze and the Yellow river valleys, which are prone to floods and soil erosion. (China Daily Online, 12/07/00 www.chinadaily.com.cn)

　　Cities along Yangtze River to Step up Protection of River 

　　Twenty-six cities along the longest river in China launched an initiative Sunday to join efforts to better protect the Yangtze. The Yangtze flows through 7 provinces and two municipalities, and is more than 6,300 kilometers long. With the construction of the Three Gorges Power Project and the development of Shanghai's Pudong District, the river valley has become one of the fastest economic growth regions in China.

　　Economic development has brought heavy pollution to the river. Statistics indicate that in 1999, more than 20 billion tons of sewage was drained into the river, accounting for 34 percent of the country's total sewage. The initiative called on all the cities along the river to take concrete measures to reduce pollution to the minimum level for the sustainable economic and social developments in the region. (People's Daily Online, 12/04/00)

　　China Protects Its Second Deepest Lake 

　　China has started to pull down illegal buildings and hotels that polluted the Fuxian Lake, its second deepest lake in southwest China's Yunnan Province, in an effort to protect lake environments. The Fuxian Lake covers an area of 212 square kilometers with a depth of 151.1 meters. Although the lake still reaches the top water quality standard set by the government, the water along the lakeside is polluted by sewage from hotels and restaurants. The local government will plant trees and develop grass areas along the side of the lake to allow people to enjoy the lakeside scenery. (People's Daidly Online, 12/04/00)

　　Xi'an to Build Wetland Nature Reserve 

　　Jingwei Wetland Nature Reserve will soon be built for the protection of 140 kinds of birds living in northwest China area. The reserve is located 20 km north of downtown Xi'an, capital of northwest China's Shaanxi Province. It occupies 60,000 square meters of land where the Jinghe, Bahe and Weihe rivers meet. The reserve is home to more than 10,000 birds in 140 varieties, including 20 species under key state protection. (People's Daily Online, 11/21/00)

　　China to Amend Fishery Law 

　　The draft amendment to China's Fishery Law was deliberated by top Chinese legislators at its 18th Session of the Standing Committee of the Ninth National People's Congress.

　　The draft amendment to the Fishery Law seeks to have China's fishery resources managed to international standards. The new draft states the management of fisheries should emphasize the protection of the marine environment and scientifically define breeding densities.

　　The draft introduces a quota system to ensure that the nation has an adequate supply of fish, and specific measures are added to ensure the implementation of the fishing quota in state jurisdictional waters. To maintain the order of fishing harbors, the draft amendment requires that the People's Government above county level strengthen its management of fishing harbors. (People's Daily Online, 10/25/00)