Hog wash: Economic development in China

There has been some speculation in recent weeks as why 16,000 dead pigs floated down the Huangpu River. The rotting carcasses threatened the water supplies of those depending on this river system including the 23 million inhabitants of Shanghai. (Now, to add insult to injury, there are dead ducks to contend with as well).

Characteristically, there has been plenty of sooth-saying from Chinese government officials, but the scepticism aired on Chinese social media platform Weibo suggests that this is doing little to reassure residents.

The problem, according to a report in The Guardian yesterday, is the sheer scale of pig production. Last year, China produced and consumed half the world’s pork (about 50m tonnes), and with a mortality rate of 2-4%, up to 300,000 carcasses need to be disposed of each year. Things become difficult when the capacity to process dead pigs does not keep up with the growing number of pig farms. Until now, it seems, this issue has been managed by some ‘entrepreneurs’ who have been buying up dead and diseased pigs and butchering them for sale as pork to unsuspecting consumers. A crackdown on black market traders has put a stop to all this and so farmers have resorted to dumping the carcasses in the river.

Mainstream economics refers to this as a ‘negative externality’ arising from a market transaction. I call it wanton destruction of natural capital, fuelled by rampant consumption and unsustainable production. GDP will go as a result of the expenditure required to rid the waterways of dead animals, but this is not economic development.