China has launched a month-long nationwide probe into hazardous chemicals, mines, transportation, and fire safety one week after a chemical plant explosion in eastern Jiangsu province killed 78 people.
Observers say that will put the world’s largest chemical industry under tighter scrutiny and regulation of the management of hazardous chemicals to prevent similar man-made disasters from happening again.
Some argue the sector’s malpractice and corruption is so deeply-rooted, however, that any quick-fix measures are unlikely to change the “blood-stained” growth pattern of the industry.
Authorities continue investigating the cause of last Friday’s blast in Chenjiagan Industrial Park in Xiangshui county, which injured another 600 people.
State media reported that a manufacturing facility belonging to Tianjiayi Chemical Co that contained benzene, a highly flammable chemical, has been linked to the blast.
Tianjiayi Chemical is a pesticide maker and producer of more than 30 chemical compounds. In February, the State Administration of Work Safety found 13 types of safety risks at the factory, including the mishandling of toxic benzene tanks.
According to local environmental protection bureaus, the producer has rolled up more than $262,000 in fines since 2016 for breaches of environmental regulations.
“The explosion in Xiangshui has uncovered much negligence in law enforcement. For example, the staff’s [lack of] qualifications [in managing hazardous chemicals],” said Cao Mingde, professor of law, environment legislation at the China University of Political Science and Law.
“Also,” he added, “two top executives of Tianjiayi Chemical who have been convicted of violations of environment pollution and illegal management of hazardous chemicals, should have been banned from undertaking similar business ventures” for a minimum period of two years.
Lessons not learned
Mingde said a sweeping overhaul of China’s chemical sector is much needed, with an urgency to facilitate legislation governing the management of hazardous chemicals and tighten regulations to ensure strict enforcement.
Similar calls, though, were heard in the wake of the 2015 blast in Tianjin that took 173 lives.
But few lessons appear to have been learned as statistics show that 620 chemical accidents have occurred over the past three years, claiming a total of 728 lives.
“There is an urgent need to enact the Dangerous Chemical Safety Law and bring systemic change to chemical management,” said Greenpeace East Asia toxics campaigner Deng Tingting in an email to VOA.
She noted that a national law, which was proposed after the Tianjin explosion, is still being drafted. The law has been slowed because of government restructuring and resistance from industries.
After the Tianjin blast, the investigative body proposed using market mechanisms to encourage better management, increasing transparency, and improving the legal system. But she said few of those suggestions have been implemented.
Citing the matter’s sensitivity, a representative at Jiangsu Chemical Industry Association and a chemistry engineering professor, contacted by VOA, refused to comment.
An industry insider, who spoke on the condition of anonymity, blamed illicit businesses, saying the government can’t possibly monitor the country’s 26,000-strong chemical producers 24/7 like a babysitter.
He also argued that the minimum distance between a chemical plant and a residential area, currently at 500 meters by law, should be flexible in accordance with the risk level a chemical plant poses.
Both Cao and Deng urged increasing the minimum distance as it seems insufficient to prevent risks after several schools and kindergartens, located two kilometers away from the Jiangsu blast site, were found to have been affected. Estimates show that one-third of the country’s chemical producers are set up in densely-populated areas.
Wu Lihong, a long-time environmental activist in Jiangsu, is pessimistic about pledges to overhaul the sector. He claimed local officials not only cut corners, but also take bribes and collude with businesses to maximize the province’s or their own personal gains.
The province has the highest number of chemical producers with approximately 4,500.
“Over the past decade, Jiangsu has made one of the largest financial contributions to the central government,” said Wu. “It serves as a cash cow for the central government. So, businesses go to authorities, who will cut corners for them by lowering environmental standards or making their trouble go away, even if an explosion is involved.”
Making things worse, the sector’s financially-disadvantaged workers often side with their business owners in fending off environmentalists or reporters, who try to bring their malpractice or pollution to light.
“Workers at chemical plants [are fully aware that] their own health is at risk, but they are given a salary level, which is 35 to 50 percent higher than that of their peers in the shoemaking and metal hardware industries,” Wu said. “So, many take up the chores, putting incomes before their health. People in the poor county of Xiangshui [are short-sighted and] would prefer to be poisoned to death than starved to death,”
Any whistleblowers there will be violently suppressed or even imprisoned, he said. This is something he knows from personal experience; Wu previously served a three-year jail term when a local court enacted retribution for his 10-year crusade against pollution in the Jiangsu’s Lake Tai. (VOA)
The Great Wall has slowly but strategically spread its roots in the Indian IT/technology and allied sectors in India, and there is no stopping the dragon which has only grown fierce — threatening industries after industries across the spectrum as India celebrates its 71th Republic Day.
From smartphones to automobile/electric vehicles, from digital payments and consumer electronics to social media, Chinese companies have created massive ripples in the country in the last couple of years, while American giants like Amazon and Facebook/WhatsApp face the political heat.
China, which is a fastest-growing trillion-dollar economy with a current GDP of $14.14 trillion is on the path to become a $20 trillion economy by 2024 and India is its “sweet spot” — with millions of consumers buying Chinese goods which has decimated domestic players in certain sectors.
Take the case of smartphone industry. According to Hong Kong-based Counterpoint Research, Chinese smartphone brands captured 72 per cent of the market in 2019 compared to 60 per cent a year ago.
Behemoth like the BBK Group (the parent company of OPPO, Vivo, Realme and OnePlus brands) captured 37 per cent market share while Xiaomi (along with Redmi and POCO brands) came second at 28 per cent.
Led by Xiaomi and BBK Group, the Chinese brands have invested heavily in manufacturing devices and accessories in India.
Xiaomi currently has seven smartphone manufacturing plants in India in partnership with Taiwanese multinational electronics company Foxconn and Singapore-based technological manufacturer Flex Ltd.
More than 99 per cent of smartphones that are sold in India are manufactured locally. Across these seven plants, Xiaomi has employed more than 25,000 people.
Xiaomi also locally sources and assembles PCBA (Printed Circuit Board Assembly) in India. It has invested in setting up smart TV manufacturing plant in partnership with Dixon Technologies in Tirupati, Andhra Pradesh. The company last year infused Rs 3,500 crore into its Indian business unit.
Vivo has committed Rs 7,500 crore as part of its India expansion plan while Chinese company TCL is investing Rs 2,200 crore in Tirupati for plants that will produce mobile handsets and TV screens.
Amid the onslaught, where do you see domestic players like Micromax, Intex, Lava and Karbonn (known as ‘MILK’ brand)?
According to Navkendar Singh, Research Director, IDC India, while we cannot rule out any player making a comeback, especially in such a dynamic market like India, it looks nearly impossible for Indian mobile phones brands to win back any relevant portion of the market.
“China-based brands have been in India for almost 5 years plus now. In this time, apart from snatching the market share almost entirely from the other brands, they have gained immense knowledge about the workings of the India market in terms of consumer thinking, preferences, channel dynamics and marketing interventions,” Singh told IANS.
The Chinese brands are continuously committing resources and investments in all these key areas.
“Moreover, with more than 3/4th of the market being with 5 players, it is becoming increasingly challenging for any new or old brands like Indian brands to attempt any sustained comeback,” Singh elaborated.
So what are the options for the Indian smartphone players?
“Indian brands can surely look at the feature phone segment, where almost all major China-based brands have chosen to stay away from (expect Shenzhen-based Transsion Group which is the leader). Also, their brand salience remains strong with that consumer segment and Tier II and III markets,” said the IDC executive.
Cut to the Auto Expo 2020 and you will have a better understanding of how Chinese companies muscle their ways.
Top Chinese firms such as SAIC (owner of MG Motors), BYD (maker of electric buses and batteries), Great Wall (which is the biggest SUV maker in China) and FAW Haima, among others, have reserved nearly 20 per cent space in the annual jamboree of carmakers and industry leaders, at a time when the Indian automobile industry is going through a severe slowdown.
Bucking the slowdown trend, SAIC has recorded healthy sales ever since it launched the Hector SUV. At present, the carmaker’s first offering SUV Hector has an order book of 20,000 bookings. It has till date sold nearly 16,000 units of Hector since its launch in July 2019.
The Chinese automobile major has now launched its first electric offering called ZS EV, at a starting price of Rs 20.88 lakh. The company said that it has secured an overwhelming response for the new-age electric SUV, with over 2,800 bookings in 27 days.
To let its EVs run smoothly in India, MG Motor India is building a five-way EV charging ecosystem in association with major domain players.
China’s leading EV company, Sunra, has expressed interest in setting up a factory in the country as it sees India emerging as the world’s biggest market for electric bikes in the next four to five years.
The EV firm has partnered with 16 private companies in Delhi. Nearly six e-bike models of Sunra are under the Automotive Research Association of India (ARAI) test and two of its models are available in some of the showrooms.