Lifting the maximum fine system will be critical to the ministry's ability to force businesses such as coal-fired power plants to actually use the sulfur dioxide scrubbers with which they have been equipped. There have been a few high-profile examples of plants getting punished for not using their scrubbers, but anecdotal reports — and the persistently hazardous air across much of Northern China's key coal basins — suggest that collusion persists among local governments and industrial players to sidestep scrubber use requirements.
It remains to be seen whether the ministry will receive the manpower it sorely needs to effectively monitor enterprises and enforce penalties. However, with the central government hinting at its desire to enshrine environmental protection in the nation's constitution by amending China's original 1989 Environmental Protection Law — a move that likely portends more concrete measures down the road — such resources could be forthcoming.
Still, the National Development and Reform Commission has a well-known preference for outlining broad policy directions rather than detailing specific laws. Furthermore, industrial and ministerial lobbies will predictably seek to bend the drafting process to their interests. Considering these obstacles, new provisions governing the Ministry of Environmental Protection enacted in 2014 and 2015 will almost certainly not eradicate the ministry's limitations and shortcomings. Beijing understands that strict, instantaneous nationwide compliance with the emissions targets it has set likely would bankrupt hundreds, if not thousands, of small and medium-sized businesses (and some large state-owned firms, too) in strategically significant industries. These industries, not coincidentally, are heavily concentrated in Hebei province, which abuts the capital city. The relationship between Beijing municipality and Hebei, along with nearby Tianjin municipality, in many ways exemplifies the immense challenges China's leaders face in enforcing environmental regulations.
The Capital and Its Periphery: A Case Study
For the past three decades, Hebei province has played the unenviable but strategically critical role of supply depot to Beijing, Tianjin and other parts of China. Hebei has supplied these areas with resources including water, agricultural goods, coal, electricity, steel, low-end labor and various heavy industrial goods. In regional clusters such as the Yangtze and Pearl River deltas, centrally located cities sparked the economies of surrounding metropolitan areas by integrating them into regional manufacturing supply chains. The relationship between Hebei and the two northern municipalities, however, has been far less mutually beneficial.
Hebei's economy has grown rapidly in recent years due to skyrocketing demand for the raw materials and low-end industrial goods, such as raw steel, that the province produces in abundance. However, the cost of this growth has been the extreme deterioration of the province's natural environment and steep declines in reserves of resources such as coal and water. Freshwater depletion and air pollution are serious issues across northern China, but nowhere are the risks as acute or immediate as in Hebei.
Unlike Foshan and other satellite cities that manufacture and process parts for assembly lines in Dongguan and Shenzhen, and which have gradually moved up the value-added chain, Hebei has been stuck supplying resource-intensive goods to its wealthier neighbors. Over the years, this peculiarly unequal and extractive dynamic has widened the human and physical infrastructural gulf between Hebei and the municipalities that it supplies.
Hebei also has missed out on the gains in living standards and quality of life seen in Beijing and Tianjin. Its per capita gross domestic product is roughly half that of its neighbors. Decades of policies designed to ensure adequate supplies of raw materials and resources for Beijing, Tianjin and other Bohai Rim metropolises have made Hebei one of the world's greatest industrial giants. It is also one of the most polluted places on earth, home to seven of China's 10 most polluted cities. The pollution in Hebei is so bad, and the social and political risks of continued spillover into Beijing and Tianjin so great, that it has prompted Xi to call for the creation of a Hebei-Beijing-Tianjin regional economic zone
(known as Jing-Jin-Ji in Chinese) largely meant to move Hebei's economy up the value-added chain and address the region's air pollution problems.
The desire to improve the air quality in Hebei, and thus Beijing and Tianjin, goes hand in hand with the objective of bridging the economic and infrastructural gaps between Hebei on the one hand and Beijing and Tianjin on the other. Pollution is the most salient symptom of these imbalances, the physical legacy of a policy that has left localities across Hebei overly reliant on primary and secondary industry — heavy industry alone accounts for 47.1 percent of provincial gross domestic product, most of which comes from mining and processing ferrous metals — and that in recent years has encouraged Beijing and Tianjin to export their heaviest polluting industries to Hebei. Reversing these imbalances will require more than building new roads and bridges in Hebei. It will require reversing the flow of fiscal resources enough to enable localities in Hebei to attract the investment and human capital necessary to support less energy- and resource-intensive industries.
This is Beijing's goal. In recent months the central government has made fairly bold moves toward raising Hebei's profile and political status. Most notably, it has broached the idea in recent weeks of shifting some administrative functions from Beijing to Baoding, a city roughly 140 kilometers (87 miles) southwest of the Hebei-Beijing border. After decades of obscurity, Baoding looks poised to re-enter the Chinese policy limelight, potentially bringing the rest of Hebei province with it. In Beijing's eyes, transferring administrative functions (and, by extension, human and financial resources) from the capital to Baoding could be the first step toward building a more organically integrated Jing-Jin-Ji region — one that transforms the Hebei hinterland from a resource supply depot to a manufacturing base that supplies coastal consumers.