The story that made headlines over the weekend in mainland China wasn’t the widely expected cut in interest rates but a documentary about air pollution, Under the Dome, produced by Chai Jing.
The former anchor at state-run CCTV shot to fame with her investigative stories about the outbreak of severe acute respiratory syndrome in 2003 and coverage of the environment.
She resigned after giving birth last year. Her daughter was diagnosed with a benign tumor while in the womb and had to be kept indoors during her first year.
That prompted Chai to create the online documentary. It said over 60 percent of China’s air pollution comes from coal and oil, because of inadequate cleaning and treatment of the fuels before they are used.
The authorities in China have always kept a tight grip on public opinion. Why would they allow a documentary that touches on major public policies to attract such great attention?
After quitting her job as a state TV anchor, Chai managed to find government officials at various levels to be interviewed for her documentary, and the minister for environmental protection even sent her a text message to express his appreciation.
The documentary has appeared on various video sites and even on the website of the government’s mouthpiece, People’s Daily.
What does all this mean?
More importantly, the film was released just before the annual “two sessions” in Beijing, which means environmental protection looks set to be a hot topic at the meetings of China’s legislature and top political advisory body.
Was that just a coincidence?
The documentary has attracted unprecedented attention, showing how much the public cares about pollution.
The government has signaled its stance against pollution by its indirect support for the film.
The National Development and Reform Commission (NDRC), the country’s top economic planning body, has announced a sharp reduction on prices for incremental volumes of natural gas from April 1.
The decision was made the day the film was launched.
The NDRC said wholesale ceiling prices charged by pipeline firms to distributors on a “base” volume of gas will be raised by 1.6 percent, but prices on incremental volumes will be slashed by 15 percent. Prices on incremental volumes have always been higher than on “base” volume.
The move will help promote use of the clean-burning fuel and led to sharp rallies in several gas plays on Monday.
Gas stocks underperformed last year, disappointing investors who placed bets on the clean-energy sector. However, these stocks soared multifold during 2009 and 2010, and a correction did make some sense.
Lagging performance in gas stocks does not necessarily mean investors should switch their bets. Clean-burning fuels are the only option, given serious air pollution across the country.
Gas plays and other environmentally friendly stocks are definitely the right direction to go. The overall trend in the sector is upward.
It’s hard to predict in advance when the government will roll out new measures to encourage the clean-energy sector. However, as long as it is determined to tackle the issue, the policy incentives will come sooner or later.
Where there is a will, there’s a way. The government’s determination to clean up the environment will boost stocks related to natural gas, waste management, new energy, electricity and so on.
This article appeared in the Hong Kong Economic Journal on March 4.
Translation by Julie Zhu
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