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Pollution: Until it hurts business, it won’t clear up

By Lara Wozniak | 15 January 2013

Images of China’s pollution graced the front pages of international newspapers this past weekend, but will all the attention force change? Probably not.

Much ado was made of Beijing’s toxic pollution this past weekend — with photos of smog splashed across international newspaper fronts and broadcast journalists spewing that the end of the world was almost upon us.

The damning news behind the uproar was that, on January 12, harmful particulates in the air in China’s capital city were 36 times higher than the safe level recommended by the World Health Organisation.

Other big cities in China, including Hong Kong, have also been faring poorly. On Sunday morning, the ICC Tower in West Kowloon was only vaguely visible from across the harbour and, by lunchtime, Hong Kong Island was a hazy outline when viewed from Kowloon — despite the sun struggling to shine.

Only one out of the first 13 days of the year was deemed clear by the Hedley Environmental Index, which monitors and publishes the real-time public health costs of Hong Kong’s air pollution.

Hedley has claimed that pollution was a contributing factor in 253 premature deaths in Hong Kong during December. Worryingly, the number of doctor visits, hospital bed-days and premature deaths has dramatically risen during January, according to the activist website.

All this should concern government officials in China and Hong Kong, and employers as well. Sick days cost money.

Hong Kong plans to ban high-polluting diesel-powered heavy vehicles (such as trucks and buses) and offer subsidies to replace others — but so far this is talk in vague terms. And Hong Kong tends to move slowly on such projects.

One also has to wonder if the fuel going into all vehicles in China and Hong Kong — not just the diesel ones — is clean. Drive through a tunnel and see if you can see; they are reminiscent of the murky view you had in Holland Tunnel in New York in the 1970s when fuel laws were more lax in the US.

And we all know the other contributors to Hong Kong’s poor air — factories in China spewing pollutants, coal-fired power plants and dirty fuel in shipping as well.

Hong Kong officials have admitted that since air quality goals were enacted 25 years ago, the city has not once met its own low self-imposed goals.

Christine Loh Kung-wai, a former lawmaker and head of think-tank Civic Exchange, was appointed undersecretary for the environment in September. This is a step in the right direction. Loh has been critical of the public policy decision-making process, but she still has to convince legislators.

Existing laws also have to be enforced. China has strict pollution laws that have not made the air clean, as Beijing residents were reminded of this past weekend.

But has all this haze deterred professionals from moving to China? Probably not that much. While there is anecdotal evidence of a handful of senior corporate executives relocating to Bangkok, Singapore or Sydney from Beijing, Shanghai and Hong Kong, and others quitting the region entirely, pollution is always just one factor in a laundry list of other problems that prompt such moves. And most executives say the departures are a part of the normal churn.

Pollution isn’t a deal-breaker yet. “Though Beijing is a bigger problem for relocating people, Hong Kong is seen as a relatively clean haven after a stint on the mainland,” said one banker.

Another noted: “The growth market is here in Asia [as opposed to Europe or the US] and all growth markets come with hardships. Ours are schools and pollution.”

In other words (sadly), it’s all relative.

That is a shame, because if corporations lobbied governments it would be more effective than the likes of Loh banging her fist on the table. And the two forces together would make change. While China is arguably a harder place to apply corporate pressure, all it would take in Hong Kong is for a few banks to say: “We’re moving to Singapore” and Hong Kong would wake up and start changing policies fast. If the ICC Tower and the IFC Tower were suddenly vacant, action would be taken. And if Hong Kong actually started stepping ahead of the mainland (instead of watching the mainland catch up to Hong Kong on a variety of fronts) you would see changes in China too.

But that won’t happen, either. Why? What multinational bank is going to chance losing an investment banking or commercial banking opportunity with the likes of Cheung Kong or Hutchison? If you abandon Hong Kong, the city’s elite will knock you off the list for a potential deal. And no one will chance that.

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