CHINESE POSTURE AT THE US-CHINA FORUM ON ENVIRONMENT AND DEVELOPMENT

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005304572
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 3
• Document Creation Date: June 23, 2015
• Document Release Date: September 10, 2009
• Case Number: F-2008-01057
• Publication Date: June 22, 1998

Inteffigence Report
Office of Asian Pacific and Latin American Analysis
(b)(1)
(b)(3)
7 December 1998
Chinese Posture at the US-China Forum on Environment and
Development
Premier Zhu Rongji has agreed to cochair the US-China Forum on Environment and
Development in Washington next April to provide continuity in the relationship and
because the forum represents one of the least contentious aspects of US-Chinese
relations. Zhu will evaluate US proposals under the forum with an eye to their cost
and potential impact on the economy:
? China's senior leaders have acknowledged the importance of
environmental protection policies in numerous speeches reported in
the official Chinese press, but are wary of initiatives that could incur
severe economic costs. For instance, China-as evidenced by its
rhetorical position at the recent climate change talks in Buenos Aires,
as reported in various press reports-will not accept greenhouse gas
emission limits that might produce an economic slowdown.
? Zhu's response to the US agenda will be tempered by the great
pressure he is under to show progress on economic reform and by his
concern that slower economic growth this year is producing fewer job
opportunities and increasing unemployment. Zhu also is waging a
battle to restructure the bureaucracy, reorganize the state-owned
enterprises, remove the military from commercial ventures, and prevent
capital flight through a crackdown on smuggling and illicit financial
transactions, according to a variety of official Chinese press reports.
? Zhu will most likely approve those proposals that offer not only
environmental benefits but also a means of addressing economic and
financial concerns, such as job creation, and fostering advanced
technology transfer and training-most notably for such projects as
waste-water treatment plants, rural electrification, reforestation, and
water management, according to official Chinese press reports.
APPROVED FOR
RELEASE DATE:
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rdentia!
 We have identified several specific areas where Premier Zhu may be particularly
responsive. After this summer's disastrous floods, Zhu is likely to view favorably any
environmental programs to reduce future flooding, such as reforestation, reversal of
desertification, and water management programs, particularly around the Yangzi
River:
? He has personally banned logging in the upper reaches of the Yangzi
River and has called for broad reforestation efforts, according to
official Chinese press reports.
? Zhu would probably also be interested in water resource and wetlands
management to restore the natural flow of the river and its flood plain
following years of land reclamation.
Zhu and the rest of the leadership have identified water scarcity and poor quality as the
most critical set of environmental problems facing China, according to official Chinese
press reports. A recent paper produced by the Chinese Academy of Sciences and
several government ministries predicted that, if water policy remains unchanged, China
will face a crisis by the middle of the next century, according to official Chinese press
reports:
? Zhu is likely to respond positively to proposals for cooperation in water
management to address northern China's growing problem of water
shortages, which have led to reductions of aquifers and land
subsidence.
? He would also probably express interest in assistance to control waste
disposal into the Tai, Chao, and Dianchi Lakes and the Liao, Hai, and
Huai Rivers, which have been targeted for cleanup. In addition, Beijing
would welcome help in cleaning up estuaries and coastal waters,
particularly in the Bohai Gulf.
Zhu may show interest in pilot programs to increase the use of gas for electric power
and other purposes. At present, China has several major sources of natural
gas-accelerated development of domestic resources, coalbed methane, liquified
natural gas (LNG) imports, and offshore gas development-but a decision to allow
increased consumption will be needed before an increase in production becomes
economically viable:
? In late October, the premier accepted a pilot program to import LNG
for a gas-fired power plant in Guangdong Province, according to
Western press reports, signaling a policy shift in natural gas
consumption. Low world gas prices, intensive competition for markets
 among LNG producers, and the apparent willingness of foreign
corporations to invest in regasification facilities and power plants
makes natural gas increasingly attractive to the Chinese.
Western industry press reports show that US companies are engaged in
developing coalbed methane and offshore gas resources, as well as the
transportation infrastructure. Zhu's concern with attracting investment
and creating jobs in China may accelerate project approvals.
Zhu's decision to permit the use of gas for electric power establishes a precedent for
the use of cleaner burning fuel in new electric power plants that may have significant
ramifications for enhancing urban air quality. Having made an initial decision on
gas use, Zhu may respond positively to a proposal for the construction of additional
pipelines or more pilot programs for gas-fired power plants in heavily polluted
cities-for example, a proposal for natural gas development and use in Sichuan
Province, which has China's largest natural gas deposits, an existing pipeline
infrastructure, and one of the country's most polluted cities, Chongqing. However,
China's energy surplus may delay the need for additional capacity in the short term.
China has a model city program under which it encourages cities to meet 27 criteria,
including environmental projects such as waste-water treatment, clean air, and solid
waste disposal. Beijing is promoting Chongqing, Guiyang, and Dalian-among
others-as future model cities, according to official Chinese press reports. Chinese
officials reached an agreement with Tokyo during the late November China-Japan
summit on a project to curb sulfur dioxide emissions and acid rain in several model
cities, including Chongqing. In this arena, Zhu would probably be responsive to
environmentally related joint ventures, localized equipment production, and training
programs.