Sunday, November 19, 2006

Air Pollution Threatening Health of Hong Kong's Economy

Sources: Hong Kong Smog Damaging Economy, Hong Kong's Market Chief Idenfities Air Pollution as a Threat to the Economy

Ronald Arculli, Chairman of Hong Kong's stock exchange, has recently acknowledged that the high levels of air pollution across China's Pearl River delta is not only threatening human health, but also the region's economic growth, and ultimately Hong Kong's market competitiveness. Hong Kong's pollution problem has received criticisms from investment bankers, international chambers of commerce, and professors in economy. The terrible air quality has caused residents to relocate to cleaner surroundings in Singapore and the Philippines and is making business professions reluctant to travel to Hong Kong. Hong Kong's chief executive, Donald Tsang, made air pollution the central theme of his annual policy address last month.

Despite identifying this problem as a threat to Hong Kong's economic standing, Arculli argues that Hong Kong maintains an open economy, an established rule of law, and is keeping head-to-head with its economic rival, Shanghai. Two years ago, Hong Kong officials set a goal to reduce air pollution by 55% by 2010; however, inconsistent monitoring and regulating has resulted in little improvement. Any improvement brought on by stricter controls on vehicle emissions in an effort to reduce traffic pollution has been negated by a general rise in air pollution as the region's economy experienced growth. Some experts are warning that unless this approach is aggressively modified and made effective, mortality and illness rates will increase and long-term economic growth will be stunted. Greenpeace conducted studies showing that the area's pollution levels exceeded international standards by over 200%.

1. To what extent should Hong Kong shift its focus to address the air pollution crisis at the expense of efforts to develop the economy? To what extent is one goal necessary to the achivement of the other?

2. What do you think are the biggest contributing factors as to how and why Hong Kong's pollution problem got to such levels?

3. What steps will be required to get the pollution crisis under control?

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