U.S. Chides China About Clean Energy, Trade Issues, IP Theft

Commerce Secretary Gary Locke Thinks Western Consumers Should Also Help Clean Up China's Pollution

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BEIJING (AdAgeChina.com) -- China's contributions to global warming, intellectual property rights and barriers to free trade have dominated negotiations between China's government and members of U.S. President Barack Obama's administration.

U.S. Commerce Secretary Gary Locke
U.S. Commerce Secretary Gary Locke
"As the two biggest emitters of carbon dioxide, the U.S. and China have a special responsibility to take action," said Gary Locke, U.S. Secretary of Commerce, in a July 15 speech in Beijing at the American Chamber of Commerce.

"It's been said that it's unjust to ask China and other developing nations to drastically reduce their carbon emissions, when countries like the United States have spent 150 years using coal, oil and other dirty fuels to grow their economies. That's an understandable point, but one of no concern to Mother Nature. She doesn't discriminate between carbon that comes from the U.S. or China , Europe or India."

Separately, Mr. Locke said "American companies in fields as diverse as energy, technology, entertainment and pharmaceuticals still lose billions of dollars every year in China from IP theft."

Environment is top concern
But the environment is clearly the No. 1 concern for the Obama administration. China's rapid industrialization over the past 25 years has resulted in major environmental problems, including 16 of the world's 20 most-polluted cities, according to the World Bank. And China recently surpassed the U.S. as the world's largest emitter of greenhouse gases, a fact that isn't lost on Chinese consumers.

Recent research conducted by companies such as Landor Associates, Synovate, Media Planning Group and GfK Custom Research has consistently shown that preservation of the environment is also a key issue among Chinese.

In GfK's study, for example, 42% of Chinese respondents cited pollution as one of their three main concerns, compared with just 22% of the global population.

Marketers are paying attention to the environmental concerns of consumers and legislators. Last month, for example, PepsiCo opened its first overseas "green" plant in China. Coca-Cola Co. has developed a college environmental protection contest as part of its sponsorship of the 2010 Shanghai World Expo. BYD Auto, a Chinese car company partly owned by U.S. investor Warren Buffett will launch a mass-produced fully electric sedan later this year.

Companies are now the "closest allies" of the World Resources Institute's efforts to limit the impact of industry and economic development on the environment, said the organization's president, Jonathon Lash, during a July 20 speech at the Foreign Correspondents' Club in Hong Kong. "Entrepreneurs are the solution, especially in China."

Should western consumers also pay?
But the strongest remarks so far about the environment, as well as trade and intellectual property issues, were voiced by Commerce Secretary Gary Locke.

Mr. Locke, a Chinese-American, caused a stir during his four-day visit to China when he suggested U.S. consumers should pay for the carbon content of goods they consume from countries around the world, including China. His reasoning, which is a popular view in China, is that local factories are churning out cheap goods for export to western countries, not for domestic consumption, so responsibility for the environmental impact lies with those consumers as well.

"It's important that those who consume the products being made all around the world to the benefit of America -- and it's our own consumption activity that's causing the emission of greenhouse gases, then quite frankly Americans need to pay for that," said Mr. Locke during another speech at the American Chamber of Commerce, this time in Shanghai on July 17.

His comments caused a stir back in Washington, D.C. where Texas Rep. Joe Barton, the ranking Republican on the House Energy and Commerce Committee, penned an open letter calling for "clarification about [Mr. Locke's] apparent proposal that the U.S. consumer should be additionally burdened with the carbon costs of other nations over and above the costs that will be imposed on U.S. consumers under the pending legislation."

The Commerce Department, meanwhile, has backed off Mr. Locke's statements, saying the secretary is concerned that U.S. companies, which are subject to harsher American legislation to reduce greenhouse gas emissions, not be at a disadvantage.

Will Chinese companies, including multinationals investing in manufacturing in the mainland, pay attention to the demands of government leaders and consumers to clean up China's environment?

Mr. Locke believes they will: "I believe that pride will ultimately guide China's decisions on climate change. Fifty years from now, it does not want the world community to lay blame for environmental catastrophe at its feet."

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