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China's lethal mix of earthquakes, corruption, and greed

By Peter Navarro
web posted May 26, 2008

Imagine that your government forced you to have only one child – under penalty of sterilization, beatings, and/or stiff fines. Imagine further that your one child is crushed to death during an earthquake because that same government allowed your child's school to be built with shoddy building materials and in violation of numerous building codes.

For many grieving mothers and fathers in China, this stark imagining has become the harshest of realities. In fact, the real tragedy of the recent China earthquake is that a significant number of the deaths and injuries were not the result of a merciless Mother Nature but rather a lethal combination of government corruption and entrepreneurial greed.

Earthquake damage
A woman hangs her laundry near the rubble of her house in the Sichuan province

The quake in question hit Sichuan province on May 12th and registered a highly destructive 7.9 on the Richter scale. While the official death toll has already risen to more than 20,000, when all of the bodies are eventually counted, that toll will likely exceed 50,000. The grim reality is that many of the dead and injured perished in poorly constructed schools and homes and other buildings that had no absolutely chance of withstanding the earthquake's deadly force.

The problem of shoddy building materials is endemic in China, and it is a particularly severe problem with cement and steel. It's not that the Chinese don't know how to properly make these materials. Rather, inferior cement and steel creep into the construction process because as a common characteristic of the Chinese business culture and lax regulatory environment, entrepreneurs regularly skimp on product quality as a way of boosting profits.

A similar problem exists with ultra-lax building code enforcement. At least on paper, China has a set of building codes almost as tough as those of the United States or Japan. In practice, however, the central government's codes are rarely enforced at the local level – particularly outside the confines of major cities like Beijing and Shanghai and particularly in poorer provinces such as Sichuan.

This problem of local autonomy goes far back into China's history and its imperial times and is reflected in the ancient Chinese proverb "the mountains are high and the emperor is far away." It is a problem that plagues China on everything from environmental protection and worker health and safety to the construction process.

On top of this, China's extremely weak legal system makes it virtually impossible for victims to seek any proper redress. Not only are the laws unclear, but the judiciary is often pro-developer. Moreover, as a by-product of the repressive nature of the Chinese regime, would-be claimants are subject to beatings. The result is precisely the kind of shoddy construction that has claimed so many lives in the recent quake.

Given China's incredibly dark earthquake history, there is absolutely no excuse for the government to allow any of this. In fact, in 1976, China suffered an earthquake that resulted in the highest number of quake-related casualties in the last four centuries. This earthquake occurred in the Tangshen area of China and damage reached as far as Beijing. While official statistics place the number of dead at 255,000, the actual number is more likely to be well above 600,000.

The only close competitor in modern times is the deadly Sumatra earthquake of 2004 which killed 228,000 – but many of those died not from the quake but the ensuing tsunami. And it must be noted that the only other quake topping 200,000 in casualites was also in China – the deadly 1920 Gansu earthquake. That's why there is absolutely no excuse for government officials to condone the type of fly-by-night development process that exists.

There are important lessons in these frank observations for both a repressive Chinese government in desperate need of reform and a world increasingly reliant on Chinese manufacturers who are far too willing to cut corners on safety. Chinese government officials must come to understand that the brutal suppression of free speech and the lack of legal protection for Chinese citizens provide the ideal breeding ground for corruption and greed. At the same time, consumers in the West have yet another data point to illustrate the deadly hazards of relying on Chinese manufacturers to provide us with everything from car parts, food, and toys to pharmaceuticals and, yes, building materials. ESR

Dr. Peter Navarro is the author of The Coming China Wars: Where They Will Be Fought and How They Will Be Won. He is a business professor at California-Irvine and wrote the bestselling investment book If It's Raining in Brazil, Buy Starbucks, and The Well-Timed Strategy: Managing the Business Cycle for Competitive Advantage. His work has appeared in Business Week, Los Angeles Times, New York Times, Wall Street Journal, and Harvard Business Review. A gifted public speaker, he has appeared on Bloomberg, CNN, CNBC, NPR, and all three major network news shows and has also testified before Congress at the U.S. – China Economic and Security Review Commission's hearing on the U.S. – China relationship. For more information, please visit http://www.comingchinawars.com.





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