Erecting trade barriers slows economic growth and hurts labor standards in China.China is taking serious steps to improve the protection of its environment.

• China has had environmental protection laws in place since 1979. Its environmental protection agency was upgraded to ministerial status in 1998.
• China has significantly lowered its energy intensity (defined as total energy consumption divided by gross domestic product). Since 1977, energy intensity in China has declined more than 55 percent while it has increased in most developing countries. Without this decline in energy intensity, China would be emitting twice as much CO 2 into the atmosphere.
• Numerous projects are under way to increase China’s oil and natural gas reserves and to transport these clean energy sources within China to replace coal as a source of power.

Increased trade liberalization in China through its accession to the World Trade Organization (WTO) has improved environmental protections.

• Bringing China into the WTO expanded its access to pollution control technology. China’s environmental services commitments in its WTO accession agreement open China to sewage and solid waste manage-ment services, cleaning services for exhaust gas, noise abatement services, and sanitation services. The opening up of these sectors to experienced firms from the United States and elsewhere ensures that China has access to the best environmental services technology.
• Increased trade has created unprecedented economic growth in China. As income expands in developing countries, the level of environmental protection improves as resources for enforcement are increased and citizens begin to demand a cleaner environment and better protection of natural resources.
• Many services liberalized in China’s WTO accession agreement have an important environmental dimension. Banking helps provide investment capital to build new environmental facilities in China, such as waste disposal. Insurance improves market signals so that potential environ-mental costs are internalized into prices. Tourism can generate foreign exchange and give China greater incentives to protect its fragile and threatened ecosystems.
• China’s liberalization of its trade and investment controls has opened the door for American companies to invest in China. U.S. companies operating in China typically bring environmental “best practices” and habits of good corporate citizenship with them. This sets a good exam-ple for Chinese companies to emulate.