According to Ecotextile News, the Chinese government recently “ordered the closure of over 2,000 companies in 18 different industries – including the dyeing and finishing sector – as the country mulls a new environmental tax on manufacturing to crack down on highly polluting industries.”

This environmental tax will likely be enforced on carbon dioxide emissions and discharges of polluted water and, according to Ecotextile News, “would form part of Beijing’s drive to make its economic growth cleaner.”

This is welcome news for the worldwide eco community struggling to crack down on highly polluting, highly energy-wasting facilities, but will this only force the outed to set up shop in another country that doesn’t have proper enforcement in place?

According to MSN, a typical scenario when production is moved from countries like China to lower-cost labor markets in Vietnam and Bangladesh, “a huge restructuring in the global supply chain aimed at reducing costs,”  is the next logical step. Currently, a smaller (but no less dramatic)  restructuring is the movement of companies inland in China from coastal areas.

One of the biggest supporters of the move? Walmart whose shifting of the way it buys its private-label goods (eg. Faded Glory) it is estimated can save $4 billion to $12 billion with a few minor adjustments.

MSN says: “The company also thinks it can find cost savings by even further globalizing the way it buys goods. Instead of its current practice of buying for each national market separately, Walmart is creating four global merchandising centers. For example, a center in Mexico City will handle merchandising for emerging markets. The company plans to extend this strategy to global sourcing of fruits and vegetables, too.

As a result, companies in coastal China will find themselves in competition on price not just with companies in inland China but also with companies in even-lower-cost economies around the world.

In textiles, for example, a company in coastal China, where wages range from $117 to $147 a month, will find itself in competition with companies in Bangladesh paying $60 a month.”

While these new moves in the Chinese government’s crackdown on pollution will allow them to meet environmental standards under a current Five Year Plan, what will be the repercussions? Is there a whole other conversation to be had about ethics?

Above image by Jakob Montrasio

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