China, From Within: Airpocalypse Now, China’s Unsustainable Business Subsidies, and Another Corruption Probe

A week of news the West missed from the world's most populous country.

By Bethany Allen-Ebrahimian

October 10, 2014, 5:36 PM

Every day, FP's China team at the Tea Leaf Nation channel scours dozens of Chinese media outlets to find compelling stories unreported in Western mainstream press. This week, we bring you the new airpocalypse, rising government subsidies for Chinese companies, and state-owned energy giant Sinopec's latest corrupt official.

Every day, FP‘s China team at the Tea Leaf Nation channel scours dozens of Chinese media outlets to find compelling stories unreported in Western mainstream press. This week, we bring you the new airpocalypse, rising government subsidies for Chinese companies, and state-owned energy giant Sinopec’s latest corrupt official.

Provincial environmental chief: Smog "can’t be controlled."

As smog once again chokes China’s northeastern cities, the head of the environmental protection bureau in one unspecified province has declared that in its current form, the environmental protection bureau "essentially can’t control smog," Communist Party mouthpiece People’s Daily reported on Oct. 10. Without increases in taxes on major polluters, the bureau chief said, the environmental protection bureau "can’t cure" smog.

Air quality is a major concern of many Chinese citizens. Pollution is so severe in China that authorities fear it could become a source of political destabilization; in March Premier Li Keqiang even "declared war" on smog. Earlier this year, China passed its most stringent environmental regulations ever, but without real results, air quality will remain a crisis.

More than 90 percent of listed Chinese companies received subsidies in first half of the year.

According to an Oct. 10 report in independent newspaper Beijing News, more than $5.2 billion in government subsidies went to listed companies in the first half of the year. The net profits of 2,537 listed companies amounted to $206 billion, up by 10.13 percent, while total government subsidies increased by $1.3 billion over the same period last year, an increase of 13.63 percent. Sixty percent of the total subsidies went to state-owned enterprises. But some experts say that subsidies can make companies lazy.

Local and national government subsidies to Chinese companies have risen in the past year as companies come under pressure from a slowing economy. But providing these subsidies in turn puts pressure on increasingly cash-strapped local governments , and might harm the long-term health of the Chinese economy.

The Sinopec discipline chief is under investigation.

The state-owned energy giant’s head of party discipline Wang Lixin, along with several other Sinopec party cadres, were taken away by authorities prior to the Oct. 1 National Holiday, Shanghai-based business magazine Caixin reported on Oct. 9. Wang Lixin is the fourth Sinopec party leader to come under investigation in the past year. In addition to serious anti-corruption scrutiny, the company has also faced government pressure to reduce the sky-high salaries of its top executives.

Bethany Allen-Ebrahimian is a journalist covering China from Washington. She was previously an assistant editor and contributing reporter at Foreign Policy. Twitter: @BethanyAllenEbr