Red China or Green?
By THOMAS L. FRIEDMAN
Published: June 30, 2006

It takes a while to get used to Lima’s Chinatown – the largest in South America – with all its Chinese shopkeepers and restaurant owners speaking Spanish. But once I found the “sopa wantan” and the “pollo con castana de caju” (wonton soup and a Peruvian chicken with cashew nuts) on the menu at the Wa Lok cafe, the neighborhood definitely started to feel like home. And even my Spanish fortune cookie (“Learn to read between the lines”) seemed somehow appropriate.

In the mid-19th century, thousands of Chinese were imported to Peru as slave laborers, replacing black slaves who had been freed. They worked sugar plantations and built railroads – until they, too, were liberated.

Today, Chinese are again flowing to Latin America. This time, though, it isn’t as laborers. It’s as businessmen and government teams looking to acquire farms, forests and mines to fuel China’s growth. Yes, “the sucking sound” you hear coming from Latin America these days is in Chinese.

Fish meal, soybeans, oil and gas, iron ore, steel, timber and coffee from Peru, Brazil, Argentina, Ecuador, Venezuela, Bolivia and Colombia are all being pulled into China. To be sure, China, like America and Europe before it, is entitled to acquire resources in Latin America. It is paying market prices and fostering a growth spurt – albeit a resource-driven one – all across Latin America.

But here’s the rub: U.S. and European multinationals today operate in the developing world under a powerful environmental microscope. Most are public companies, sensitive to any article or blog or e-mail campaign that might accuse them of despoiling the environment – and thereby trigger backlashes by shareholders or consumers, who expect a high level of green behavior. Also, a web of U.S. and European environmentalists and media constantly monitor their companies’ global footprints.

Chinese companies do not yet operate inside such a web. So they are on a global campaign to amass oil, gas, farms and mining concessions, from Latin America to Africa, with few of the legal, public opinion or peer-pressure constraints of Western firms.

That is why one of the biggest environmental challenges in the world today is how to turn “Red China” into “Green China” – not just at home, but abroad.

China is becoming more sensitive at home to the costs of its polluted rivers and air and the overuse of its natural resources. That is encouraging. But we don’t want China to export its degradation – cleaning up at home, while despoiling ecosystems abroad.

This could easily happen. On a tour of Latin America in 2004, President Hu Jintao said that China would invest $100 billion over 10 years in developing resources here, and the ports and railroads to transport them. Since 1999, the Latin American share of China’s total imports has more than doubled, according to Intelligence Research Ltd.

Here in Peru, China’s Shougang steel company bought the Marcona iron ore mine in 1991 – one of the largest in Latin America – along with a Pacific deep-water port. But it is located next to a natural bay, loaded with wildlife. Shougang has regularly made it into the Peruvian press, accused of dumping effluents into the bay and not treating its workers well.

The amount of press it gets here, though, “is nowhere near what a North American company receives,” a U.S. consultant in Peru said to me. And none of this makes news in China.

One good sign is that the Chinese oil company Sapet, which the Peruvian government recently awarded a permit to explore for oil on some pristine land inhabited by some of Peru’s indigenous people, has approached local environmentalists to consult on how to proceed. “It is too early to tell whether their environmental performance will be up to the best international practices or not,” said Alfredo Ferreyros, who heads the Peru office of Conservation International and took part in the meeting. “But the indigenous peoples are already opposed.”

Alas, it took 20-plus years for Western companies and countries to understand and manage their footprint on the natural world. A few days ago, I was in a rain forest on the Tambopata River where Mobil Oil once explored. It did it in a way, though, that left no trace today.

But we don’t have 20 years to wait for China to figure this out. There needs to be a broad dialogue with China now – by governments, environmental groups, companies – on how to make its global footprint green. Without that, not only will the planet suffer, but China, in time, will trigger a real backlash against itself.