By Pankaj Ghemawat
FORTUNE -- A cloud will hang over the upcoming plenum of the Chinese Communist party in Beijing -- literally. It is late fall, and so pollution levels in China's capital as well as in other of its cities, always high, are going to go through their usual seasonal surge. The NASA Earth Observatory just announced that the northern city of Harbin saw concentrations of fine particulate matter (PM2.5) as high as 1,000 micrograms per cubic meter. For comparison, the NASA report said, the U.S. Environmental Protection Agency's air quality standards say PM2.5 should remain below 35 micrograms per cubic meter.
And now, this pall will soon extend to within the great hall of people: Some China watchers are describing pollution -- along with corruption -- as one of the most significant threats to the legitimacy and continued rule of the Communist party. Pollution in China is a human tragedy on a vast scale: It has been estimated that in some northern Chinese cities, lifespans have already been shortened by several years. Multiply that many millions of time over, and you get a sense of the human toll, above and beyond the degradation of farmland, the economic costs of factory shutdowns, the inconvenience of being able to drive only every other day, and so forth. At the same time, China's new middle class, which is getting increasingly vocal about pollution, wants to enjoy the wealth it has worked so hard for and not being able to let one's kids play outdoors isn't anyone's idea of prosperity.
Will the Chinese government act? What economists call the Kuznets curve -- popularly referred to in environmental circles as the richer-is-greener curve -- suggests Beijing will be forced to by local pressure. This is the empirical observation, first made by Nobel Prize winner Simon Kuznets, that many problems like income inequality and pollution first get worse as a country industrializes. But once a country's citizens reach a certain level of income, the situation starts to get better, producing an inverted-U curve. China's average per capita incomes, now around $6,000, are where environmental Kuznets curves are often supposed to turn down. In other words, China is now rich enough to do something about its pollution.
If China's middle class finally forces its government to act on pollution, the benefits may accrue not only to long-suffering Chinese citizens but also to the rest of us. In particular, local pressures -- if reproduced in other countries such as India -- may be the best path for dealing with not only pollution but also global warming. Because in a world with weak global governance, the alignment of local interests with global interests -- the alignment of China's interests with the rest of the world's -- may represent the only real hope for real change.
Pankaj Ghemawat is the Rubiralta Professor of Global Strategy at IESE and the author of World 3.0.
Chinese maker of telecom gear, blocked from U.S. market, seeks to overcome security concerns.
FORTUNE -- Remember that 1995 Alanis Morissette song, "Ironic?" Well, here's another unexpected situation to add to the singer's long list of ironies: Huawei, the Chinese telecom equipment maker that has been blocked from the U.S. market because of concerns about its alleged ties to China's government, is now pushing for global cybersecurity standards.
The company MOREMichal Lev-Ram, writer - Oct 18, 2013 11:20 AM ET
72 hours after launch, the higher-price iPhone represents 78% of activations worldwide.
FORTUNE -- If Apple (AAPL) designed the lower-cost iPhone 5C with the billion-plus Chinese mobile phone market in mind -- as many analysts opined -- someone forgot to tell the Chinese.
Of the nine countries included in the launch of Apple's new iPhones Friday, none showed less interest in the iPhone 5C than China.
A Localytics survey of 20 million iPhones conducted MOREPhilip Elmer-DeWitt - Sep 24, 2013 8:38 AM ET
After Rupert Murdoch spent so many years pursuing the Chinese market, 21st Century Fox is now reducing its exposure.
FORTUNE -- It is an iron-clad rule of the contemporary business landscape: Invest in China or imperil your future growth. It's noteworthy, then, that one of the most aggressive western companies in terms of trying to crack the China nut is more or less giving up the fight.
21st Century Fox, the film MOREAdam Lashinsky, Sr. Editor at Large - Sep 20, 2013 8:40 AM ET
The price differential between the U.S. and China opens the door to a lively grey market.
FORTUNE -- Four days after Apple (AAPL) began taking pre-orders for the new iPhone 5C, the device is available in all colors and configurations except for the most expensive: the T-Mobile and SIM-free models that start at $549.
Why would that be?
It's simple, really. A lot of those unlocked phones are headed for overseas grey markets.
And MOREPhilip Elmer-DeWitt - Sep 17, 2013 12:49 PM ET
In China, the $99 iPhone 5C goes for anywhere from 4,488 yuan ($730) to "free."
FORTUNE -- When Apple (AAPL) posted the off-contract price of the entry level iPhone 5C on its Chinese website -- 4,488 yuan including taxes and import fees, or more than $730 -- Wall Street reacted with something akin to sticker shock, driving the company's share price down $56 (11%) in less than a week.
After all, this MOREPhilip Elmer-DeWitt - Sep 17, 2013 7:49 AM ET
If it's going to happen, it may have to be on the big carrier's terms and timing.
FORTUNE -- So high were the expectations that China Mobile (CHL) was about to announce a deal with Apple (AAPL) to sell the latest crop of iPhones that news that it would be made overnight Tuesday made it into several analysts' reports.
The marriage of the world's largest mobile carrier (740 million subscribers) and the MOREPhilip Elmer-DeWitt - Sep 11, 2013 10:51 AM ET
Fake versions of luxury goods can cost pennies to manufacture and millions to track down.
By Iris Mansour
FORTUNE -- "We want to know what you think is the real or the replica Beats," says the voice off camera, belonging to Jack Gilbert, a British teen hosting a segment on his YouTube channel, TechFusions. He's talking about Beats by Dr. Dre luxury headphones. Gilbert and his co-host conclude that they look MOREAug 27, 2013 10:42 AM ET
Based on the cars the Chinese buy, Apple would be better off exporting a silver iPhone.
FORTUNE -- The rumor that Apple (AAPL) may be making a gold iPhone -- floated last Friday by iMore's Rene Ritchie and picked up by four dozen of the usual suspects -- led some commentators to opine that the color was chosen for the Chinese market, where gold is supposedly an especially popular color.
That was MOREPhilip Elmer-DeWitt - Aug 20, 2013 7:52 AM ET
AlphaWise survey finds Chinese willing to pay up to RMB 4,000 ($486) for the Apple brand.
FORTUNE -- Morgan Stanley's Katy Huberty has some good news for Apple (AAPL) and bad news for everybody else trying to sell smartphones in China.
On Monday, the same day the Wall Street Journal put its imprimatur on rumors that have been floating around for weeks -- namely, that Apple is set to launch a pair MOREPhilip Elmer-DeWitt - Aug 20, 2013 4:37 AM ET
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