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China relaxes environmental rules as trade war bites

- Oct 07, 2018 -

China has relaxed winter anti-pollution measures as it prioritises economic growth over the environment, in the midst of a damaging trade war with the US.

-Lower overall targets for particulates in key urban areas

-Local authorities, not central government, to enforce measures

-Relaxed rules on coal could boost availability of gas for chemicals

With the new US tariffs on $200bn in Chinese imports now in place at 10% and likely to rise to 25% on 1 January, China’s economy is starting to feel the pinch.

China’s latest official manufacturing purchasing managers’ index (PMI) slipped to an eight-month low of 50.8 points in September, from 51.3 in the previous month.

Chinese manufacturers of finished goods for export to the US have been hit particularly hard, and have cut their purchases of raw materials.

For example, US tariffs on finished goods containing polyvinyl chloride(PVC) helped Chinese domestic prices slump by 9% in a week to a nine-month low in late September as demand dropped.

As China’s economy slows, its leaders are relaxing environmental rules in the hope of stimulating growth.

The country’s official news agency, Xinhua, reported on 27 September that a target of a 3% year-on-year reduction in average intensity and the number of days with high levels of the particulate PM2.5 would be implemented in Beijing, Tianjin, Hebei and surrounding areas.

The target applies from October 2018 to March 2019 and affects producers of thermal power, steel, petrochemicals and cement.

Under the new rules, blanket bans on the use of coal for domestic heating will not be included this winter

Instead, local authorities will set the targets to match local gas and power generating capabilities. This could improve supplies for chemical production this winter.

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