Chinese State Capitalism and the Environment

About the SpeakerAlex Wang is an Assistant Professor of Law at UCLA School of Law. His primary research and teaching interests are in environmental law, Chinese law, comparative law, and torts. He has been a visiting assistant professor at UC Berkeley School of Law.Wang was previously a senior attorney for the Natural Resources Defense Council (NRDC) based in Beijing and the founding director of NRDC’s China Environmental Law & Governance Project. In this capacity, he worked with China’s government agencies, legal community, and environmental groups to improve environmental rule of law and strengthen the role of the public in environmental protection. He helped to establish NRDC’s Beijing office in 2006. He was a Fulbright Fellow to China from 2004-05. Prior to that, Mr. Wang was an attorney at the law firm of Simpson Thacher & Bartlett LLP in New York City, where he worked on mergers & acquisitions, securities matters, and pro bono Endangered Species Act litigation.Wang holds a J.D. from NYU School of Law, and earned his B.S. in Biology with distinction from Duke University. He is on the Advisory Board of the Institute of Public & Environmental Affairs (IPE), a leading Chinese environmental organization. He is also a member of the Council on Foreign Relations, the National Committee on U.S.-China Relations, where he was a fellow from 2008-10, and the Advisory Board to the Asia Society’s Center on U.S.-China Relations. He is a regular speaker on issues related to China and environmental protection. About the TalkChinese state-owned enterprises are commonly viewed as rogue vested interests thwarting state environmental goals through capture of rule making, enforcement, and allocation of state subsidies. While state capture is a useful lens of analysis, this framing has too often obscured how SOEs and central authorities have traditionally been more or less aligned in treating environmental protection as a low-priority objective. Given this alignment of interests, past evidence of SOE non-compliance does not create a strong inference that central authorities are unable to garner SOE compliance with state priorities. With this as foundation, I argue that the recent rise of “green development” priorities in China places central authorities in uncharted territory in their approach to regulating SOEs. In recent years, central authorities have attempted to shift SOE behavior toward green development goals through a combination of accommodation/bargaining (carrots) and bare-knuckled, sometimes extra-legal efforts to weaken the sources of SOE influence (sticks). The approach has also included modest expansion of traditional regulatory and market tools that are commonly favored by Western commentators. The limited embrace of these regulatory and market tools, however, suggests, among other things, a continued unwillingness (or inability) to expand the power of courts and regulatory agencies, and the likelihood that the state will sustain a relatively high-level of intervention in markets and economic activity. Ultimately, this particular approach to authoritarian environmentalism has the potential to deliver some level of environmental performance in the near term. This dynamic has implications for assessments of Chinese state legitimacy and regulatory approaches in authoritarian and emerging economy contexts.