New ways of understanding and managing economic development are being pioneered in China. A new generation of scientists is taking the lessons learnt from two centuries of development around the globe, leapfrogging mistaken strategies and applying the best of modern science to more intelligently address environmental and economic issues.
What China has achieved since 1979 is a miracle unprecedented in world history, and will be viewed as such centuries from now. China's record-breaking development requires us to take a fresh look at what development means and how it should be achieved.
In this respect, the 11th Five-Year Plan (2006-10) is the practical application of the scientific concept of development put forward by the Central Committee of the Communist Party of China.
Professors Shi Lei of Tsinghua University, Ma Zhong of Renmin University of China and Fang Decai of Beijing Normal University are examples of younger scientists who have seen what the scientific world has to offer and are now reshaping it to fit China's development experience. Their ambitions have a fascinating rationale.
The idea of progress, and a desire for increased production was only formalized in the industrial revolution in Europe 250 years ago. A focus on gross domestic product originated from the US government's commissioning of a survey of national income in the 1930s.
It was an exciting idea to monitor the incomes of individuals and firms in microeconomics and add them to a macroeconomic scenario. Income in monetary terms equals the value of goods and services produced, so the "gross product" of a nation became a shorthand index of wealth and wellbeing. Who would deny the attraction of increased incomes?
Development has been characterized as a "pathway" pioneered by European industrialization, accompanied by improved technologies and a burgeoning of science and technology, and appropriate economic explanations and analysis. The pathway is basically linear and upwards, tending to plateau off on achievement of development.
Once this trajectory science was formalized in graphs, the race was on with aspiring nations hoping to copy or eclipse the paths of the world's most developed economies. There have been some notable successes, but nothing on the scale and sustained intensity of China.
The foundations of economics were laid down two centuries ago when science was inventing steam engines and explaining the parabola of projectiles, and the metaphors are still there in modern economics. But science has come a long way thanks to the new ideas of atoms, energy and thermodynamic laws.
The scale of economic activity 200 years ago, even in English industrial cities noted for their spectacular production, was so small that the most influential economist of the time wrote that any gifts of nature that existed in boundless quantities were free. What the United Kingdom discovered, and other economically advanced nations copied, was that the supply chain to access natural resources - these "gifts of nature" - could be extended globally.
In getting from raw materials to fine marketable products, if there was some waste along the way, this was unintended - like a nuisance, or merely accidental - and was later labeled by economists as an "externality". When production processes got really messy, exporting smokestack industries was regarded as rational economics.
Environmental concerns took hold in the 1960s, encapsulated by authors in Limits of Growth and Silent Spring. The Eagles' Last Resort lyrics traces development from the "old world" to the US east coast, then to the west coast and out to the westernmost pristine island of the Hawaii chain, concluding that "we have got to make it here, there is no new frontier".
The trend westward in development really ends in Asia, and China has benefited hugely since the early 1980s. But 31 years on, The Eagles' lyrics ring true: There are no new frontiers. At least there are not geographically, but there are in terms of technical innovation and scientific understanding.
Most pertinently, what has been gained in science has to be incorporated into fresh concepts of economic development.
Professor Ma, dean of Environment at Renmin University of China, is an expert on Material Balance. This is the science that says what goes in must come out, and is formally termed the First Law of Thermodynamics - matter and energy cannot be created or destroyed, only changed to other forms.
A ton of coal burns to give off heat, and that can be converted to electricity. Material Balance asks where the coal went. The answer is that, after combusting with oxygen from the air, it became 1,600 kg of carbon dioxide. And China burnt 2 billion tons in 2006.
Material Balance teaches that this is not some incidental "externality".
The response from conventional economics - to suggest an arbitrary $7 per ton trading price on carbon - is just not good enough to deal with what is happening in China now. Material Balance is no mystery, and was pioneered as an environmental monitoring approach by Allen Kneese, under whom Professor Ma studied.
It is just that it is indeed an inconvenient truth, and could be dismissed by developed economies if the waste was elsewhere, and while it was not on the global scale it is today. Professor Ma and his colleagues are advising China's planners and policymakers, and educating an army of bright young people, to whom Material Balance is now an obvious truth.
This is only the first step in terms of China's scientific reappraisal of development. The Second Law of Thermodynamics sets out that in any change, if we take into account the surroundings (i.e. the environment) the net result is "worse off", also referred to in physics as disorder, chaos, and high entropy.
At Tsinghua University, the Faculty of Environmental Science and Engineering, Professor Shi Lei is pioneering Industrial Ecology. Professor Shi and his postgrads visit iron blast furnaces at rural regional sites, which are contributing to the country's annual steel output of 350 million tons. The dollar value of output is good for the enterprise - but it pours out huge amounts of harmful gases, vapors and solids that can be monitored as undeniably bad for the wider community, now extending across China, the Korean Peninsula, Japan, and even America.
Tracking flows of energy, and the more specific forms classed as energy and entropy, points to efficiencies, guiding us toward reducing, reusing and recycling in a circular economy.
Professor Fang Decai of the Chemistry Faculty at Beijing Shifan University uses a method of analyzing the composition of matter that is so revolutionary that its benefits are now being accepted to intelligently design molecules of the right shape and function to "dock" with human cells and fix them. The method can also design molecules of matter of desired extraordinary characteristics for engineering construction.
The method was developed by Richard Bader of McMaster University, Ontario, under whom Professor Fang studied. What is new in China is that the mapping of molecules, empowered by the speed of modern computing, has the potential to zoom in and out between molecules of, for example, iron ore being refined into iron, and the macroview of a blast furnace, and in addition, to the regional, national and global perspective, pollution included.
The 3D contoured map of an iron ore molecule - two atoms of iron overlapping with three atoms of oxygen - suggests how the bonds can be efficiently broken to produce pure iron and release oxygen. Instead of the 1,000-year-old practice of blindly heating the ore to 1,600 degrees and blasting the oxygen free to bind with coke to billow off as carbon dioxide, this understanding could lead to cool refining.
As an analogy, rather than pocketing billiard balls by violently shaking the pool table, intelligent minimal force with a cue can be directed to achieve the same result. Tim Sylow, who manages global iron ore sales for BHP Billiton, and with a background in blast furnace engineering and thermodynamics, sitting in on a Tsinghua University research in progress meet, exclaimed: "That would be industry's holy grail!"
These concepts inject rigorous science into the pricing of environmental goods. Rather than meekly guessing some small amount as a fine for some act of polluting, or whimsically designating a price to trade waste, Material Balance can calculate the exact amount, and entropy analysis and modern chemistry can calculate its severity.
The objective scores are analogous to the introduction of the breathalyzer for drunk-driving, and do away with guessing, secrecy and blustering denials.
Looking back on 250 years of economic development through the Industrial Revolution started in Europe, and the economists' explanations of it, the stark conclusion is that microeconomics does not add up to macroeconomics - what is profitable for an individual or a firm may not be the best for the country or the globe. It is a sleight of hand to boast progress in production of "goods" while piling up "bads" in someone else's backyard.
The call for development to be comprehensive is now embodied in the current draft amendment to the Party Constitution. With the new wave of scientific concepts incorporating total accounting, entropy analysis and molecular mapping, industrial processes can be monitored from the scale of atoms to the global environment, and the numbers add up.
Ironically, we have come round through modern science to what in China has been an ideal for a very long time - that human activity should be in harmony with nature.
The author is a researcher from Australia
(China Daily 10/17/2007 page11)