China Using Economic Pressure to Push Environmental Change

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By Michael Standaert

Aug. 1 — China will use a slate of economic tools, from restricting loans and market access to cutting off subsidies and tax credits, to pressure companies to stop violating environmental laws, the government said July 27.

The Ministry of Environmental Protection was joined by the National Development and Reform Commission, the People's Bank of China, and some 30 other government departments in the announcement.

“We will collect the names [of companies and their representatives] and pass them to other departments and announce them online,” said Huang Runqiu, vice minister of the Ministry of Environmental Protection.

Violators could be barred from access to certain markets or removed from government procurement catalogs; loan applications could be terminated and corporate income tax reductions or energy subsidies canceled; and company representatives could be barred from serving as members of national or local people's congresses.

The announcement comes amid a series of measures meant to strengthen environmental law enforcement, including moves to give the ministry more oversight of environmental protection bureaus at the provincial and local levels to curb protectionism by local officials.

It followed a July 1 announcement by the China Securities Regulatory Commission that companies with significant environmental problems within the past three years will not be allowed to apply for initial public offerings on China's stock exchanges in Shanghai and Shenzhen.

Lifetime Responsibility

China recently approved a “lifetime responsibility” system for government officials, which addresses in part environmental problems under the watch of officials, and can lead to punishment even of retired officials. Several locales are starting to implement regulations on lifetime responsibility specifically for environmental problems.

The ministry also pressed ahead with an agenda for reform of how environmental impact assessments are conducted, with a 13th Five-Year Plan (2016–2020) implementation scheme for environmental impact assessments released July 19.

Eleven provinces proposed putting provincial and local environmental protection bureaus more directly under control of the central government Ministry of Environmental Protection by the end of 2018, President Xi Jinping said in a July 22 speech.

Xi said officials are responsible for protecting the environment and reiterated that failure to do so could follow them into retirement, reducing their status or possibly removing benefits.

To contact the reporter on this story: Michael Standaert in Shenzhen, China, at

To contact the editor responsible for this story: Greg Henderson at

For More Information

The Ministry of Environmental Protection announcement is available, in Chinese, at .

Guangdong's lifetime environmental responsibility policy is available, in Chinese, at .

The ministry's Environmental Impact Assessment Reform Implementation Plan is available, in Chinese, at .

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