China Facing Criticism As Polluting Cement Factories Are Relocated To Tajikistan
China’s Ministry of Foreign Affairs and Ministry of Commerce are facing criticism after Chinese cement factories relocated their environmentally unfriendly operations close to Dushanbe, the capital of Tajikistan. The Chinese cement industry has been facing economic problems due to the domestic slow down, and have relocated operations to Tajikistan amidst huge over capacity in their domestic market. As a result, Tajikistan’s cement production has increased by 500 percent in the past three years – in one of the world’s worst industries for spreading pollution. Cement factories are notorious for producing excessive carbon dioxide and smog.
China’s domestic cement industry is massively over-supplied: between 2011 and 2013, China produced more cement than the US did in the whole of the 20th century. Yet markets like Tajikistan remain alluring. The nation’s own cement industry was decimated during the collapse of the USSR, and it had been importing cement from Pakistan and Kazakhstan in the interim period – until the Chinese factories showed up. These plants are also fueled by coal – often low-grade quality as the Chinese seek to cut operating costs to the minimum. While it is true that the operations run at a higher technological capability than Tajik domestic plants have been capable of, the sheer volume of Chinese production – using technologies without protection now illegal in China – the result has been a massively reduced air quality problem.
The environmental situation is expected to get worse. Tajikistan has announced it wants to become a major exporter of cement by 2020 – meaning cranking up production still further.
The problems remain profound. On one hand, the Chinese appear to be abiding by Tajikistan’s own investment laws, and even take advantage of tax incentives to build these plants. It is hardly China’s fault if Tajikistan’s domestic environmental laws are insufficient. Tajikistan also needs the revenues – it is one of Central Asia’s poorer nations. However, the Chinese authorities need to be careful as concerns future political fallout. China’s relocation of cement factories to Tajikistan have been billed as a “One Belt One Road” project. The brand itself has thus far proven inspiring, and motivated countries from across Asia and Europe to become involved. But if Beijing isn’t careful about the quality of investments it sends abroad in the name of One Belt, One Road (OBOR), it could very easily start to gain a dirty, polluting name that will be hard to clean up.
China’s Ministry of Commerce and Ministry of Foreign Affairs would be well advised to insist quality standards are put in place when domestic technology is transferred in the name of OBOR, and to insist that production facilities not in compliance with China’s own environmental regulations cannot be exported. Polluting your neighbors can have serious future political consequences, and could spell the end of Beijing’s OBOR dreams before they’ve even got five years underway.
About Us
Silk Road Briefing is published by Asia Briefing, a subsidiary of Dezan Shira & Associates. We produce material for foreign investors throughout Eurasia, including ASEAN, China, India, Indonesia, Russia & Vietnam. For editorial matters please contact us here and for a complimentary subscription to our products, please click here.
Dezan Shira & Associates provide business intelligence, due diligence, legal, tax and advisory services throughout the Asian and Eurasian region. We maintain offices throughout China, South-East Asia, India and Russia. For assistance with OBOR issues or investments into any of the featured countries, please contact us at silkroad@dezshira.com or visit us at www.dezshira.com
Related Reading:
Silk Road and OBOR Business Intelligence
Dezan Shira & Associates´ Silk Road and OBOR investment brochure offers an introduction to the region and an overview of the services provided by the firm. It is Dezan Shira´s mission to guide investors through the Silk Road´s complex regulatory environment and assist with all aspects of establishing, maintaining and growing business operations in the region.
China’s New Economic Silk Road
This unique and currently only available study into the proposed Silk Road Economic Belt examines the institutional, financial and infrastructure projects that are currently underway and in the planning stage across the entire region. Covering over 60 countries, this book explores the regional reforms, potential problems, opportunities and longer term impact that the Silk Road will have upon Asia, Africa, the Middle East, Europe and the United States.
