China cut pollution alert, more future economic impact is unclear

China's authorities have raised the "red alert" pollution in the Beijing region on Thursday. Now, there is speculation about what will be the economic impact if measures such as turning into something usual in big cities.

The vice president of Shahe Jindong Glass company, Liu Zhiqi, said his company tried to reduce emissions, to cut by 50% its production this week, even if it means delaying some deliveries. "We realized the seriousness of pollution and we must cooperate," he said at the factory located just over 400 kilometers south of Beijing.

For now, economists say a few days of downtime or running factories should partially hardly be registered on growth, or at least suffer less than, for example, when the government ordered shutdowns a military parade maçou the end of World War II, in September and a meeting of world leaders last year.

Red alert for air pollution in Beijing, however, illustrates the dilemma of leaders on the possibility of sacrificing economic activity, at a time of growth already slowing.

On the one hand, leaders attempt to reduce the reliance on more polluting industries. Economists say that the picture can accelerate changes to cleaner industries with higher added value, which can boost growth. Any loss in economic activity, however, is a challenge, at a time when the authorities struggle to achieve the goal of growing "around 7%" this year.

The closure of schools and the determination that thousands of cars should leave the streets are just some of the inconveniences to residents of the capital. Director of Lieberthal Rogel Center for Chinese Studies at the University of Michigan, Mary Gallagher says the residents of big cities like Beijing, are soon to show dissatisfaction with these red flags, if they become habitual.

Only in Beijing, about 2,100 factories closed or limited operations in the capital region during the alert that lasted two and a half days, according to a municipal commission. In September, over 10,000 factories were shut down in preparation for the military parade. This time, "the impact is transitory," said the chief economist for Asia at Mizuho Securities Jianguang Shen.

Both in August and now, authorities ordered the stoppage of buildings, to limit the dust generated. At this time of year-end, however, many construction sites were already paralyzed, because the local winter.

In most cases, regular workers continued to receive during the stoppages. But the temporary do not get it do not work, which can generate more discontent and unrest if stoppages type become common.

Economists say frequent alerts in the future could have an impact on many sectors, such as tourism. In the long run, predict that this can foster the sense of urgency that could help break dependence on decades of industry country for growth.

On Thursday, the Asian Development Bank approved a $ 300 million loan to Beijing clean your air, helping the province of Hebei - generally considered the area that most needs a type cleaning - to develop programs to reduce pollution and guide investments in green energy. Source: Dow Jones Newswires.