I always assumed that Chinese factory owners didn’t care about environmental pollution, as long as they were making money. Turns out things are not so simple…

(Part 2 of 2).

After the tour, Mr. Liang took me to his office. His office had the familiar layout which I now call the 老板 “Big Boss” office layout: a big wooden desk, leather couches facing it, a coffee table. On the desk was a plastic golden bull. I had seen one in Mr. Wei’s office (see factory 1), and I would later see it almost everytime I sat down in a CEO’s office, big or small company. For now, it was an enigmatic symbol. Perhaps it represented Wall Street and thus the pinnacle of capitalism? Or something to do with the Chinese zodiac ox?

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The discussion

“He grew up in America”

I sat down on the sofa. Mr. Liang took his rolling chair and moved it from his desk to across the coffee table. Then Mr. Liang’s business partner, Mr. Deng, came in. Mr. Deng sat down next to me on the couch and offered me a cigarette. I tried to subtly and politely decline, saying, “I’m not used to smoking.”

“It’s because he grew up in America!” Mr. Liang said. I wasn’t sure if he was joking or not…

“…But thanks anyways!” I thought. By pointing the reason for me not smoking to something external (“Steven grew up in America”), as opposed to something internal (“Smoking is bad for one’s health and therefore Steven does not smoke”), Mr. Liang saved face for Mr. Deng [1], and prevented me from being in an awkward position of implicitly criticizing Mr. Deng’s lifestyle choice.

Mr. Deng nodded. He must have seen my body language saying, “I’m not used to secondhand smoke either,” because he got up and opened the window a bit.

I stopped holding my breath.

“So, our friend here is studying at Zhejiang University, but he’s a Chinese-American!” Mr. Liang told Mr. Deng.

Mr. Deng having a curious look in his eyes, asked, “Ah, okay… so when did you move? Where do you parents work? Why are they still there?”

I knew exactly where this conversation was going.

I answered a few questions, and then said, “First let me ask you guys a few questions, is it okay? Then we can talk about whatever we want.”

On we went[2].

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Personal views: “Enough to eat”

Mr. Liang grew up in a peasant family background. He managed to test into university and attend engineering school for electrical engineering in the late 80s/early 90s. After his undergraduate degree, he was assigned a job in his home province[3], but unsatisfied with the pay, decided to try his luck in Shenzhen. At that time, Shenzhen was just starting to boom. Mr. Liang transitioned into a more managerial role. He even worked for Foxconn, the company that makes iPhones, where he boasted about managing a few hundred people.

When I asked him to talk about his views on environmental protection, he started by telling me about his childhood.

“Let me tell you,” Mr. Liang said, “back 20 years ago, when I was growing up, there was no such thing as huanbao[4] (environmental protection) or not. Everything was huanbao.”

Mr. Deng tag-teamed with a quip: “For example, we never used pesticides on the farm. All those plants were safe to eat.”

“But the problem was, there wasn’t enough food to eat!” Mr. Liang took back the baton from Mr. Deng. “I remember when I was a child, I ate just rice and vegetables all the time. Meat was a luxury. Everyone was always in some semi-hungry state. Not starving like China in the 50s or 60s. But not full either. We didn’t have enough to eat.

“Anyways. Then in the 80s and 90s, we started using pesticides. We started building more factories. And polluting our water and air in the process. Do you know why we polluted?”

“Why?” I responded.

When you’re hungry, why would you care about huanbao?”

Mr. Liang paused.

“I guess you’re right,” I said. “But I don’t know. I’ve never really experienced long-term hunger in my life before.”

Mr. Liang continued, “But now China’s on the rise. Now that we’ve had some time to develop, we have to start caring about huanbao. You see all these polluted rivers in Guangdong province, Beijing’s terrible air, or all these food scandals. We can’t keep having this now that we’re not poor anymore. I don’t want my kids to face this. It’s necessary for us to consider the future and start caring about huanbao. And I think we’re seeing that in China now.”

Mr. Liang’s answer was one that I would hear over and over from factory managers in their 40s or 50s, especially those who grew up on farms in the 70s and 80s. The answer went something like this:

● In the 70s and 80s, we [China] were too poor to care about environmental protection.

● China’s development has raised it to a level where it should, and is starting to, care about environmental protection.

● We better do it so that we can breathe clean air, drink clean water and eat safe food!

Implicit in the argument was that below a certain level of economic wealth, economic development trumped environmental protection to some degree. Mr. Liang talked about this concept in terms of his childhood and not having enough to eat.

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Factory practices: “We just use electricity”

When I asked what kind of environmental impacts he thought his factory had, Mr. Liang said, “Nothing, everything is huanbao. We only use electricity here, and we don’t pollute or waste at all. There’s no water pollution. We don’t have any air pollution. Everything is huanbao.”

At first I was a bit frustrated at his answer. Mr. Liang didn’t own a toxic chemical plant, but clearly, there was some waste and pollution, since the used bottles of coating material were disposed of in regular trash, for example. Or all the materials with at least traces of heavy metals that were inevitably being scattered on the floor? Or the fact that electricity usage in China, 65% supplied by coal[5], is especially impactful. Upon further consideration from Mr. Liang’s perspective though, it made sense. It’s helpful to remember that Mr. Liang viewed huanbao as being tied to immediate health effects – nothing his factory did had immediate health effects on neighbors (for example, he wasn’t dumping toxic water out to a local river), so it was fine in his eyes. Given that, Mr. Liang sincerely believed that since his environmental impact was so minimal, of course his factory was huanbao.

When asked about his company’s interactions with the local EPB (environmental protection bureau), Mr. Liang told me, “Besides the original permit to start this factory, nothing.”

“Seriously, nothing?” I asked back.

“Yeah, the EPBs only care about manufacturers who pollute the local water, and we clearly don’t do that.”

His answer again shook my sensibilities (I still think the situation is a bit extreme), but it’s important to see things from the Chinese perspective: the local EPB was probably staffed by tens of staff members, but there were hundreds of factories in Mr. Liang’s city. To do regular inspections would be next to impossible. Thus the EPB triaged and probably focused on much more polluting factories such as chemical plants.

In addition, the way Mr. Liang responded to this question about EPBs was also interesting. He didn’t hide a potentially embarrassing fact. He told it straight up, without beating around the bush. Mr. Liang had good guanxi with me, but he also must have been sincerely unembarrassed and unsurprised by the fact that the EPB didn’t do regular inspections.

I asked Mr. Liang whether his customers cared about if his products or factory were huanbao. Mr. Liang told me that the customers would not come to his factory to do audits, and only cared about whether his products had RoHS and CE certifications[6]. In retrospect, this made sense, since Mr. Liang did not sell directly to Western retailers (factories I’ve visited who sold to Western retailers did get audited from customers).

Finally, I asked Mr. Liang my final interview question: “Overall, how do you think your factory is doing with respect to environmental impact?”

I wasn’t surprised when he said, “Our products are RoHS certified. We don’t emit major pollutants. I think we are huanbao.”

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Conclusion: several major themes revealed

My tour of Mr. Liang’s factory was a dazzling light and robotics show, but it was the interview that revealed the most insight. Mr. Liang and his factory are an archetypical example of two themes I’ve seen over and over in interviews.

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Huanbao is ultimately tied to personal health

Mr. Liang viewed huanbao from an immediate, personal health, perspective. He talked about good environment in terms of blue skies, quality air, safe food, clean rivers, etc. All of this ultimately relates to health and personal well-being on a very direct level. Almost all the factory managers I’ve interviewed also used the same kind of rhetoric. They never talked about huanbao in terms of global climate change, CO2 emissions, rainforest destruction, or endangered animals. These latter environmental impacts are viewed more as indirectly affecting quality of life so as to not be as important as economic development.

The way in which Mr. Liang described his factory’s level of huanbao corroborates this point. The only external accountability that Mr. Liang’s factory had was its RoHS certification. And RoHS is essentially a health objective: to prevent the product from being toxic.

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Factory is huanbao as long as it doesn’t pollute directly

The first theme relates to the second theme, which is that only the worst, direct impact environmental offenses count as violating huanbao. For example, Mr. Liang had said, “There’s no water pollution. We don’t have any air pollution. Everything is huanbao. As long as those were fine, it’s fine.”

This make sense from a historical perspective, since China is still transitioning from economic development trumps all to thinking about environmental protection as well. The first step to that is to care about direct pollution. As another factory manager would tell me later, “Just ten years ago, everyone was dumping chemicals into the local rivers. It was completely black. Now the effluent is being treated, and the river is at least not black anymore. Of course it’s still a lot worse than the US with all your blue skies and blue water, but it’s huge improvement for our city in just ten years.”

Are there more insights? I’m still trying to figure them out myself, but a logical next step is always to visit more factories!

[1] Here’s a good intro to face saving in East Asian cultures. Cigarettes are an important gift medium among men (though this is changing). Combining this with the concept of face, it can be perceived as rude to turn down a cigarette.

[2] A list of interview/discussion questions I asked can be found here

[3] Back then, it was common for university graduates to be assigned a work location and job by the government after graduation. No job search required!

[4] In Chinese, 环保 huanbao is sort of a catch-all word that means the act of being environmentally friendly (adjective), along with the act of environmental protection (noun). So “my company is huanbao” (my company is environmentally friendly) and “my company has good equipment for huanbao” (my company has good environmental protection equipment) are both proper sentences in Chinese. In these essays, I use huanbao instead of “green”, “sustainability”, “environmental protection” to present the way my Chinese interviewees view environmental protection or being environmentally friendly, which can be quite different from the way it is typically used in Western media.

[5] See the electricity section of the US Energy Information Administration’s China report here

[6] RoHS (restrictions on hazardous materials) is an European directive that requires electronic and electric material be free of six specific hazardous materials.


2 thoughts on “Factory 3: LEDs, part 2— the discussion

  1. This is really neat stuff, and I’m glad you’re posting it where I can read! Did you ever take an ES class at Wellesley? There’s something called an Environmental Kuznets Curve (EKC) which predicts a progression from a low-polluting economy to one that pollutes more, and then with prosperity (and after seeing what they have done to the environment on the way to that prosperity) people start caring more and have the means to reduce their pollution. It was fascinating to read what Mr. Liang said and hear how it is basically word-for-word what you would expect to read in an EKC case study: “Now that we’ve had some time to develop, we have to start caring about huanbao.”

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