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U.S. firms driving pollution in China

U.S. firms driving pollution in China

U.S. firms driving pollution in China
August 22, 2007

U.S. firms are helping drive environmental degradation in China, putting the health of millions of Chinese at risk, reports The Wall Street Journal. The paper says that by demanding ever lower products for goods, manufacturers are forced to reduced environmental safeguards in order to compete.

Jane Spencer, author of the article, cites findings from a recent investigation into the Fuan Textiles mill in southern China as an example. The company, owned by Hong Kong-based Fountain Set Holdings, was caught dumping 22,000 tons of water contaminated from its dyeing operations each day into a nearby river, turning it dark red color.

“Prices on fabric and clothing imported to the U.S. have fallen 25% since 1995, partly due to the downward pricing pressure brought by discount retail chains,” wrote Spencer. “One way China’s factories have historically kept costs down is by dumping waste water directly into rivers. Treating contaminated water costs upwards of about 13 cents a metric ton, so large factories can save hundreds of thousands of dollars a year by sending waste water directly to rivers in violation of China’s water-pollution laws.”

China’s water pollution has worsened in 2007 according to SEPA.

“The first thing they say when they sit down in a meeting is, ‘How much discount do I get from last year?'” Bill Lam, former executive director of Fountain Set who is now executive director of a competitor, Pacific Textiles Holdings Ltd., told Spencer.

“Prices in the U.S. are artificially low,” Andy Xie, former chief economist for Morgan Stanley Asia, is quoted as saying. “You’re not paying the costs of pollution, and that is why China is an environmental catastrophe.”

Spencer writes that U.S. firms are now “scrambling to prevent environmental issues from creating the same kind of consumer backlash as the antisweatshop campaigns of the past decade.”

“After labor issues, the environment is the new frontier,” Daryl Brown, vice president for ethics and compliance at Liz Claiborne Inc., which uses Fountain Set cotton in some of its products, told The Wall Street Journal. “We certainly don’t want to be associated with a company that’s polluting the waters.”

China’s State Environmental Protection Administration (SEPA) estimates that 300 million people lack access to clean drinking water. Mr. Xie estimates that 20-30 percent of China’s water pollution results from the manufacturing of goods that are exported.

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CITATON: JANE SPENCER (2007). China Pays Steep Price As Textile Exports Boom. August 22, 2007; Page A1 The Wall Street Journal

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