Thomas Friedman tells us in Wednesday's New York Times that, after his most recent visit, "for the first time, it's starting to feel to me like China is reaching its environmental limits." That's kind of like observing, after the recent kidnapping of Iraqi government officials directly from their Baghdad offices, that the situation in Iraq is beginning to get ugly. But far be it from us to carp at Friedman's recommendation that China "radically change to greener, more sustainable modes of design, transport, production and power generation," if it wants to avoid an "eco-nightmare." Not only is this true, but as Friedman concedes, China's leaders are well aware of the problem, and working to address it.
If only the U.S. demonstrated the same concern. Case in point: I've written before (and as recently as yesterday) on how the European Union leads the world in aggressively restricting the content of hazardous materials in electronic products as well mandating comprehensive end-of-life-cycle recycling. Since July, any company that exports electronic devices to the E.U. must conform with the E.U.'s Restriction on Hazardous Substances (RoHS).
Well, China has its own RoHS coming, and by most accounts the scope of the new restrictions are even more comprehensive than Europe's. For example, China's RoHS, as currently constituted, doesn't exempt manufacturing or testing equipment needed to actually make products, as do the E.U. regulations.
The significance of China RoHS, which starts coming into effect in March, 2007, is likely greater than Europe's version. China manufactures 25 percent of the world's consumer electronic goods. Companies with no presence in the E.U. might feel no need to comply with the E.U. RoHS, but nearly everyone is part of a supply chain that passes through China. Futhermore, in a world of proliferating regulations, companies tend to flock towards compliance with the strictest rules. According to an article from Design Chain Associates.
When it comes to regulatory compliance, the general rule is that the most stringent regulations win. That means products must be designed to the most restrictive regulations in order to sell into that market. The other markets are then free, as far as regulatory compliance goes, because the less stringent requirements have already been met. At this point, it appears that China will be in the top position.
There are plenty of significant questions about China RoHS. The regulations are unclear, there are many ambiguities, and there's always the issue of enforcement. Will Chinese authorities take RoHS compliance more seriously than they do, say, copyright infringement? Will there be different standards for foreign-owned and Chinese-owned corporations? How ambitious, ultimately, will the Chinese become, in their efforts to legislate environmental protection?
But as one analysis observes, betting on a lack of enforcement is hardly a sound business strategy. The global trend, led by Europe, and now given additional force by Asia, is to remake manufacturing supply chains in environmentally prudent fashion. The smart long-run solution for any electronics company is to clean up its act.
It probably goes without saying that the world would be substantially further along the path towards environmental sanity if the planet's largest economy and biggest market had goosed the process along. But while the E.U. and China take serious steps to reduce the content of hazardous materials in products and require the recycling of every component in those products, the U.S. stands on the sidelines. Or, in the case of the Bush administration, actively works to weaken environmental restrictions.
Sure, China is a big mess, and there's no guarantee that China's leaders will straighten their country out. But we should be thankful for their efforts, because if they do succeed, they will go a long way towards cleaning up the U.S. Take your pick: you can savor the irony or burn with the shame.