Daily Archives: September 27, 2021

It is clear to any objective observer that our planets resources and ecological well-being are under assault by the actions of the nearly eight billion people living here on earth. Those of us in the developed world have a far greater environmental impact than people in the developing world, but there is great political pressure in the developing world to increase material wealth. And that political pressure will lead to increased environmental impacts. Our political stability and security depend on the maintenance of material wealth where it exists and economic growth where people are poor. But to achieve those goals, we must learn how to construct a high throughput economy that does not destroy our planets ecosystems. This is the topic of a book I have begun writing, and this piece summarizes the books main themes.

To achieve the transition to environmental sustainability, we must undertake the following five actions:

Our current focus on climate change is essential, but it must not be allowed to crowd other critical environmental issues off the limited bandwidth of our political agenda. COVID-19 demonstrates that issues such as invasive species can disrupt our way of life and demonstrates that climate is not our only sustainability challenge. Since the United States Environmental Protection Agency was created back in 1970, we have made enormous progress in using new technologies to reduce our impact on the environment while allowing economic growth to continue. This suggests that we have the capacity to develop methods of production and consumption that are less damaging to the planet. We simply need to up our game and increase the amount of effort we devote to this task.

It all begins with understanding the current state of environmental degradation. We need to do more research on:

Next, we need to increase our understanding of the specific causes of environmental degradation. These include:

This ideological opposition to science is growing and deeply problematic. People are willing to accept the benefits of science and technology as if they are made from magic but resist science that identifies costs and proposes methods for mitigating those costs.

Once we understand the environmental conditions we have created and how and why theyve been created, we then need a realistic, non-ideological strategy for reducing pollution and growing a renewable resource-based economy. Key elements of the strategy are providing public incentives for clean production and consumption. Of course, first, we need to clearly define a clean economy by developing generally accepted sustainability metrics. Once we know how to define and measure environmental success, we then need to:

In addition to these public incentives, we must turn away from the self-defeating message that sustainability requires sacrifice by articulating a positive vision of the transition to environmental sustainability. This would:

Mike Bloomberg and Joe Biden have both connected environmental sustainability and economic growth. A sustainability-centered economic strategy must explain how it works in detail and use hard data to demonstrate the jobs created and the equity and environmental justice goals achieved. We need to communicate the opportunities created by a transition to a green economy. While many governments have set ambitious decarbonization targets, we need to move beyond this rhetoric to a focus on improving current levels of performance. We need to move away from symbols to operational reality. Government regulation should focus on rigorous and audited measurement of environmental sustainability indicators. Once baselines are established, decades-long efforts should be undertaken to improve and measure performance. Tax benefits should be provided for specific levels of environmental improvement. Tax penalties should be assessed on organizations not improving or allowing the deterioration of environmental performance.

The transition I am describing will mainly take place in the private sector. However, just as government built or partnered with the private sector to build the infrastructure needed to support the 20th-century economy, we need a massive infrastructure rebuild to ensure an environmentally sound 21st-century economy. We need public sector-funded infrastructure to support environmental sustainability. This begins with energy: solar, wind, geothermal, hydro generation, microgrids, distributed electricity generation and high voltage long-distance distribution.

Next, we need a water system built for a warming planet. We need investment in desalination and in the construction of new water filtration and distribution systems. Next, we need to reimagine our waste system to mine it for resources. This requires investment in waste-to-energy facilities, automatic methods of sorting waste, recycling, waste reduction and developing advanced anaerobic digestion technologies to take food waste and return it to farms as fertilizer. We need to do the same with sewage treatment: develop and utilize sewage as a resource for growing food.

In addition to energy and waste, we need infrastructure for transportation. This includes traditional roads and bridges but also includes mass transit construction, operation, and maintenance. We need public and private electric vehicle charging infrastructure. We also need research and development of environmentally sound air and high-speed rail travel.

Another key area of infrastructure is communications technology- rural broadband, urban wireless and advanced cellular communication must be encouraged and subsidized when necessary. These technologies enable the consumption of ideas, entertainment, and social interaction with very low environmental impacts.

Finally, as the COVID crisis has taught us, public health institutions must be rebuilt at the local, national, and global level. We will see additional pandemics if we do not act now. We need:

Unfortunately, none of this will happen unless we change the politics and communication of environmental sustainability. The negativity and arrogance of some environmental advocates contribute to a cultural and ideological divide that reduces support for environmental protection. We need to articulate a positive vision of an environmentally sustainable lifestyle and promote these images through the media, culture, and entertainment. Environmental sustainability advocates need to create and disseminate positive role models and reduce the focus on environmental symbolism and the emphasis on enemies. People that work for fossil fuel companies are not evil. They are simply trying to support their families. We need to persuade and cultivate rather than shame those holding different views.

Our focus should be on sustainability successes rather than on evil polluters. Advocates should articulate the attraction of wellness and the health benefits of a clean environment rather than the dangers of illness from toxics. Scare tactics get attention, and the media loves them, but they are ultimately negative and divisive. Our goal should be to build a wide political consensus rather than insist on a single view of the causes of damage to the planet. Urban environmentalists should restore the traditional alliances with people who hunt and fish. We should also provide natural experiences and images to our increasingly urban population. Some natural experiences should be outside the city, but some should be in restored urban parks and wetlands.

We should work to promote environmental values and ethics. Alliances with religious groups can be used to connect environmental quality to religion and religious institutions. Even if we differ on other issues, everyone likes to breathe clean air, drink safe water, and eat food free of poison.

A realistic transition to environmental sustainability will be a long and gradual process where we change the definition of the political center and anti-pollution policies will be as accepted as policies that seek to prevent violence. Its speed will resemble the slow pace of change as we transitioned from cities that traded natural resources to manufacturing cities and from industrial cities to the service-oriented urban places we now call home. The floods, winds and fires of climate change and the horrific health and economic impacts of COVID have caused many people to question our ability to dominate nature. This makes a new environmental politics possible. We need to understand nature better to both live within its boundaries and maintain our current way of life. As I often say, our species is ingenious and is not suicidal, so I suspect we will somehow manage the difficult transition to environmental sustainability.

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A Realistic Transition to Environmental Sustainability - State of the Planet

Back in the 1940s, progressive and futuristic farmers were aware of the big mistakes farmers and ranchers had made in the earlier days causing lands to deteriorate. Today, we are still trying to improve our relationship with the environment Terms like sustainable agriculture, integrated pest management, organic farming and permaculture are used by folks concerned about minimizing our negative impact on the planet. We now focus on minimizing our carbon footprint as we experience the effects of global warming.

Lets take a look at the concept of permaculture as we face todays challenges. Permaculture utilizes a design methodology to create a sustainable way of life for all species, especially humans. By integrating information about natural ecosystems with human activities and needs, we can create a future that is truly sustainable, environmentally and economically sound, and physically and socially healthy.

Most of the permaculture curriculum deals with what are termed visible structures. These are all the elements that we can see in the landscape such as windbreaks, orchards, aquaculture ponds, gardens, dwellings, roads, etc. These elements are designed according to several design principles such as analysis of needs and yields. Each visible structure or plant and animal species has both needs and yields.

A pollutant might be looked at as an unused resource. Many agricultural systems have one product and lots of pollutants. Permaculture has many products and hopefully few or no pollutants. By placing elements or species in proper spatial relationship to each other, a connection is made that matches the yields of one element to the needs of another, changing a problem into a resource. While fallen fruit from mango or other trees may breed fruit flies and create unpleasant odors, by letting chickens forage in an orchard area, the problem fruit, insect eggs and larvae are converted into a rich chicken food source. Chickens can also provide weeding, manure and insect control to any orchard thus both the chickens and orchard benefit.

Chickens also fulfill another design concept that strives for multiple functions for single elements. In addition to their orchard maintenance functions, they also produce eggs and meat, and consume kitchen wastes. Another example might be a mango tree that produces food, shade, provides bee forage and predator habitat, and could be a natural jungle gym for childrens play.

To conserve energy, designs are laid out by zones that place elements in relation to the dwelling, based on the frequency one visits that element. For instance, fresh herbs that might be used every day, would be placed very near the house, perhaps even in containers near the kitchen door. One might harvest vegetables, papayas, and limes several times a week, so they would also be placed somewhere near the house. A mango or avocado tree or orchards that only come into bearing seasonally would be placed farther away. Pasture animals are usually placed farther away from the house as are forestry and wilderness areas.

Permaculture covers a broad range of topics, always making connections between topics, and always looking for ways to create resources from problems. Special attention is given to trees and their material and energy transactions, especially reforestation and permanent tree cropping and agroforestry systems. Also, attention should be given to water and ways to store and reuse it, aquaculture systems, to soils, their composition and structure, and how to enrich them. It is important to expand these concepts to create sustainable communities. The integration of all these topics creates villages based on permaculture concepts that are the ultimate goal. It sounds a bit Utopian but earlier island cultures either learned this lesson or did not survive. We are now an island culture made up of the entire planet.

In addition to these visible structures, permaculture includes invisible structures, those elements in our society that profoundly affect how we live but which are not seen in the landscape. These all-important structures control some of the means by which sustainable systems can or cannot be established. Some examples include financial systems with strategies for creating wealth and keeping it in local communities such as our islands. Also establishing land trusts for conserving and enriching natural resources, political systems, community-based economic development strategies, and consumer and producer cooperatives.

Permaculture addresses virtually all aspects of our society and economy. It is a valuable concept for people involved in such diverse disciplines as education, agriculture, forestry, land-use or energy planning, landscaping, economic development, financial systems, small business opportunities, legislation advocacy, tourism, environmental preservation, nutrition, and the connections among all of these areas. Locally, nationally and internationally many are attempting to address these issues. If we succeed, humanity can flourish. If we fail, we will see more starvation, mass migrations, wars and pandemics. We have little time to waste!

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Living sustainably has been called many things over the years - West Hawaii Today

Maine FishAbility, part of the Maine AgrAbility program, will sponsor a team of runners in the 2021 Maine Marathon Run for a Cause virtual relay on Oct. 8.

All proceeds will support the Maine Coast Fishermens Association's Fishermen Wellness Program, which helps to provide safety equipment and mental health and wellness support for fishermen and fishing families.

To help sponsor the race team, make a donation on the fundraising webpage.

For more information about Maine FishAbility, a program that works with fishermen who have chronic health conditions, injuries or disabilities to help them continue to work productively and safely, contact Leilani Carlson, 207.944.1533; leilani.carlson@maine.edu. More information also is available on the program website.

About University of Maine Cooperative Extension:

As a trusted resource for over 100 years, University of Maine Cooperative Extension has supported UMaine's land and sea grant public education role by conducting community-driven, research-based programs in every Maine county. UMaine Extension helps support, sustain and grow the food-based economy. It is the only entity in our state that touches every aspect of the Maine Food System, where policy, research, production, processing, commerce, nutrition, and food security and safety are integral and interrelated. UMaine Extension also conducts the most successful out-of-school youth educational program in Maine through 4-H.

About the University of Maine:

The University of Maine, founded in Orono in 1865, is the state's land grant, sea grant and space grant university. It is located on Marsh Island in the homeland of the Penobscot Nation. As Maine's flagship public university, UMaine has a statewide mission of teaching, research and economic development, and community service. UMaine is the state's only public research university and among the most comprehensive higher education institutions in the Northeast. It attracts students from all 50 states and more than 75 countries. UMaine currently enrolls 11,741 undergraduate and graduate students who have opportunities to participate in groundbreaking research with world-class scholars. UMaine offers more than 100 degree programs through which students can earn master's, doctoral or professional science master's degrees, as well as graduate certificates. The university promotes environmental stewardship, with substantial efforts campuswide to conserve energy, recycle and adhere to green building standards in new construction. For more information about UMaine, visitumaine.edu.

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Maine FishAbility race team to support fishermen's association, Oct. 8 - PenBayPilot.com

John PerkinsPublished 10 hours ago.About a 4 minute read.Image: WestRockSponsored Content / This article is sponsored byWestRock.

Through materials innovation and technology advances, the packaging industry can be a critical component in working toward a world without waste and a truly closed-loop, circular economy.

In early 2019, Highland Brewing a family-ownedcraft brewery in Asheville, NC faced a dilemma: The plastic packaging itused to bind its beers was no longer accepted at many recycling facilities. Tomeet the expectations of its environmentally conscious and outdoors-orientedlocal customer base, the company needed to find a new solution.

This wasnt the only problem Highland Brewing was trying to solve. At the time,the company was also looking for ways to reduce plastic use overall within itsfacility, as well as increase efficiency in operations to be more cost-effectiveand conserve resources.

Plastic waste and resource conservation are growing issues globally. As asustainability-focused packaging solutions provider,WestRock has many customers including HighlandBrewing that are looking for ways to phase out less sustainable materials intheir packaging and reduce emissions in their operations without sacrificingproductivity.

It might seem like a tall order, but one solution to all these challenges isactually quite simple: automation.

Hear more from BBMG, eBay and Williams Sonoma on activating consumers as the critical missing link in emerging circular models around clothes, footwear and other CPGs at SB'21 San Diego October 18-21.

Automation isnt a novel concept corporations have been capitalizing on theefficiency that automated machinery offers for years. However, thesolutionscoming to market today have vast sustainability benefits for both companies andtheir consumers. They enable optimal use of labor, materials and resources forpackaging, which in turn reduce waste and cost. As one of the only providers ofboth packaging and automation, the value proposition is heightened by addressingsustainability and efficiency at both ends of the spectrum.

Between April 2019 and May 2021, Highland Brewing saved 1.3 million plasticwraps with the introduction of both paperboard packaging and automation,equating to 63,000 pounds of plastic kept out of the waste stream.

Many of our customers, as a first step, are examining fiber as a moresustainable packaging option. And theres good reason for that. According to asurveyconducted by Consumer Brands/Ipsos in July 2021, 84 percent of USshoppers are concerned about plastic and packagingwaste.Highland Brewing was experiencing the direct impact of this concern from itscustomer base.

The adoption of fiber-based, sustainably sourced materials can help companiesachieve their environmental goals and meet new consumer expectations. It alsohelps them avoid their packaging becoming brandedtrash which is a disservice to the reputation of a brand and its products, anddistasteful to those who run into it on the street or in nature. By usingfiber-based materials, companies give their customers the agency to bypass thewaste bin for the blue bin.

To make this shift, companies can begin with smallswaps such as choosing fiber-based packaging one product or system at a time. InHighlands case, we first worked with them to replace their 12-oz can plasticpackaging with paperboard cartons, making it one of the first breweries in NorthCarolina to implement the use of paperboard. This swap, aided by an automatedsystem, made its packaging process easier and more resource efficient.

... But in practice, this isnt always the case. When products are mismatchedfor their boxes, ecommerce companies wasteresourcesand consumers get frustrated. Further, these oversized packages take upunnecessary space in transport, leading to higher shipping costs and increasedemissions.

This doesnt need to be the reality. Recent advances in packaging automationhave yielded solutionsthat help manufacturers and distributors select the right sized box for everyproduct, every time. The operational efficiency of these machines, coupled withthe reduced weight and size of the packaged products, make for a cost-effective,more sustainable solution to customers packaging challenges.

Automation also has the benefit of allowing companies to optimize the resourcesused during production, helping reduce total electricity, water and materialusage. Because improved efficiency was also one of Highland Brewings packaginggoals, we worked with them to implement a high-speedBrewpack cartonerproduced by WestRock and Switchback. The efficiencies found with the newsystem extended beyond operational productivity.

"Were now saving a lot of time in operation, which reduces water usage and CO2emissions, said Highland President and CEO Leah Wong Ashburn. By addingthe system to our lines, weve also been able to reduce our material waste."

These solutions also make a tangible difference for customers seeking tomaximize efficiencies in their lines. Combined processingsystemsmake it possible to produce more sustainable packaging alternatives fasterthrough streamlining, tackling a multi-step or multi-machine process all atonce. The efficiencies gained can translate into reduced emissions and overallcost reductions through material and labor savings.

We all have a part to play in creating a more sustainable future. Throughproduct innovation and technology advances, the packaging industry can be acritical component in working toward a world without waste and a truly circulareconomy.By leveraging automated systems, we can streamline and expedite our efforts.

Back in 2019, we had three dumpsters and one recycling bin, Ashburn says.Now, we have three recycling bins and one dumpster.

Published Sep 27, 2021 8am EDT / 5am PDT / 1pm BST / 2pm CEST

This article, produced in cooperation with the Sustainable Brands editorial team, has been paid for by one of our sponsors.

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Craft Brewer Extols Benefits of Pivot to Better Packaging - Sustainable Brands

As science-based conservation organizations with long and deep roots in the Durham community, we want to express our unqualified support for the Durham Town Councils recent vote to remove the Mill Pond Dam the head-of-tide dam that prevents the natural flow of water between the Oyster River and Great Bay Estuary.

A dam was first constructed on the Oyster River in 1649 to run small mills in a colonial settlement. For the first time in thousands of years of human history in the region, there was no ebb and flow between fresh water of the Oyster River and the tidal water of the Great Bay Estuary. The many species of fish and wildlife that migrate between the two could no longer move freely from river to sea through the different phases of their life cycles. Sediment flowing from the landscape built up behind the dam, unable to be scoured from the river channel in heavy rains. Water quality worsened in the Oyster River as the Mill Pond became shallower, warmer, and more depleted of life-giving oxygen.

As centuries passed, multiple iterations of the original dam helped drive the economy of the town and the region, but the dam that remains today provides no power, it is structurally deficient, and is considered a hazard by regulators. Head of tide dams such as the Mill Pond Dam would not be built today -the ecological damage caused by such dams is well documented. The Mill Pond Dam continues to create a barrier between fresh water and tides, it blocks migratory fish passage, and it contributes to the impairments in water quality that are recognized by the NH Department of Environmental Services and US Environmental Protection Agency (USEPA).

The Great Bay Estuary is one of 28 places recognized by the US EPA as an estuary of national significance. There are many municipalities and organizations throughout our region including Conservation Law Foundation, The Nature Conservancy and the town of Durham that have been working together for years as part of the Piscataqua Region Estuaries Partnership to restore and protect the rivers and bays of this special place. Through science and research, education, legal advocacy, land conservation and habitat restoration, we are collaborating to reverse the downward spiral in the Estuary. While we have much more work to do, we are making headway. The removal of barriers in the estuary, like the Great Dam in Exeter, Sawyer Mill Dam in Dover, and Crommet Creek culvert in Newmarket, are all major milestones on the long road to recovery for the Great Bay Estuary.

We applaud the thorough, thoughtful, and respectful process undertaken by the Town of Durham to explore all options to remedying the deficiency of the Mill Pond Dam and water quality problems in the Oyster River.

Repairing the structure, while continuing to block natural spawning migration routes for species such as rainbow smelt, would merely shift the financial and environmental burden to future residents of Durham. After review of the numerous studies and reports prepared by the towns consultants, as well as our own analysis and experience with river restoration in other locations, the weight of evidence makes clear that removal of the Mill Pond Dam will result in a significantly better environmental outcome for the estuary and Oyster River system than repairing it.

As natural resource managers, we understand how difficult this decision is for the community. Many have strong ties to the dam and to Mill Pond for its recreation values, historic legacy and aesthetic qualities. The Councils focus on transparency, scientific analysis and rigorous questioning has allowed the public to gain not only an understanding of the financial costs of the various options, but also the environmental and natural resource implications associated with repair or removal of this infrastructure.

In addition to the clear ecological benefits of removing the dam, a restored tidal river system will bring the community additional recreational and natural resource opportunities, with no financial obligations or risks associated with the continued maintenance of expensive infrastructure. Intact natural systems are inherently more resilient to pollution and other stresses resulting from development and a changing climate.

Removal of a dam does not mean erasing history. Many communities in similar circumstances have found creative and meaningful ways to acknowledge the historic nature of such infrastructure while celebrating the environmental and natural resource benefits of a restored river system. We have no doubt that by working together creatively as a community, Durham can both dramatically improve the Oyster River while acknowledging its industrial past.

We are grateful that the Durham Town Council took the time needed to research this complex issue, listened respectfully to diverse and passionate voices in the community, and ultimately followed the science. While not everyone may be happy with the final decision, the evidence is clear: the natural resources of Durham will be improved by removing the Mill Pond Dam, and the Oyster River and Great Bay Estuary into which it flows will be healthier and more resilient as a result.

Charles DeCurtis, Freshwater Manager, The Nature Conservancy in NH

Melissa Paly, Great Bay Piscataqua Waterkeeper, Conservation Law Foundation

Rachel Roulliard, Director, Picataqua Region Estuaries Partnership

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Your View: Removing the Mill Pond Dam in Durham is the right decision for our environment - Seacoastonline.com

Investors should view recent interventions by the government in the context of its history and longer-term strategic ambitions

The wise make their own decision; the ignorant follow the crowd

Chinese proverb

Back in the late 1980s, in the latter stages of the Cold War, an urban myth began circulating about then Soviet leader Mikhail Gorbachev, his Chinese counterpart Deng Xiaoping, and US President George H.W. Bush. In the story, Gorbachevs chauffeur-driven car comes to a junction and pauses. Pointing left is a sign labelled Socialism, pointing right is a sign labelled Capitalism.

Irritated by his drivers indecision, Gorbachev barks: Why the delay? To the right!

A short time later, Bush Snrs car sweeps through the junction, taking the righthand fork at high speed. Bush gestures his approval to his driver they are on the right route.

As evening draws in, Dengs car arrives at the same junction, and the driver is told to stop for Deng to get out of the car. After assessing both directions for a while, he nods to himself. He then reverses the sign and returns to the car. To the right to socialism! Deng instructs his driver. And dont look back!

Fast forward to today, and China, under the strongman leadership of Xi Jinping, is again at a fork in the road as it seeks to achieve its long-term goals of sustainable prosperity and stability. Based on recent events, policymakers seem prepared to take potentially significant pain to remap Chinas growth model.

Multiple factors have precipitated this shift, not least the countrys ageing population who face the risk of getting old before getting rich, coupled with a more confrontational external environment.

A slew of new regulations in the Year of the Ox, including a tightening of rules for Chinas booming tech sector, have spooked domestic and international markets. While some changes may seem to have come out of nowhere, many have been well signposted under the aspirational goal of common prosperity. Notwithstanding the clear economic imperative for these changes, if we consider them in the context of the last 100 years in China, we can better understand their rationale and how they relate to Beijings vision for the future.

If China can successfully remap the contours to its growth model without triggering a hard landing or global recession, it should present attractive opportunities for investors. This remapping also raises important questions for economies elsewhere, not least whether there will be a demand shock to commodities that will disproportionately hit raw material-exporting emerging markets.

A century of Chinese communism and the germination of targeted intervention

After tremendous growth in the last 30 years, China is big enough and confident enough to determine its own way forward. Not for the sake of being different, but because it has taken its own idiosyncratic path to this point and has its own singular influence on the way it approaches national and global challenges. When governing 1.3 billion people, at the human level there will certainly be pressure from events, casualties along the way, and no doubt costly mistakes.

We should not lose sight of the fact that the Chinese economy is fundamentally a planned economy. This year marks the 100th anniversary of the formation of the Chinese Communist Party (CCP), a point for reflection on what has been achieved and what still needs to be done before the next centenary of great importance, 2049, which will mark 100 years of the Peoples Republic of China.

But we should also remember other events that took place in the run-up to Chinas adoption of communism, events still seared in the national psyche.

In the mid-19th century, a weakened China was forced into granting concessions to foreign powers and to open ports for trade in a series of unequal treaties. The reasons for the Qing Dynastys inability to protect China are manifold, but one important aspect was its belief that China was the Central Kingdom. It focused internally, while the rest of the world progressed in the white heat of technological change that characterized the industrial revolution.

This inward-looking philosophy hampered Chinese progress, in stark contrast to the new leaders in the rest of the world. This is a mistake modern China is keen not to repeat; it wants to be a global trading partner but on its own terms.

At the turn of the 20th century, the Eight-Nation Alliance (Germany, Japan, Russia, Britain, France, the United States, Italy and Austria-Hungary) marched into a China in disarray. There was much looting of Chinas cultural relics and its heritage. The shame of these events hung heavy on the shoulders of many Chinese and was, in part, a catalyst for the formation of the CCP in 1921 both a political party and revolutionary movement.

The partys founding fathers made a number of pledges, including for xiao kang zhi jia (), which translates as common prosperity. This ideal resonates with the party under Xi it was deemed a fundamental principle of Chinese socialism at the 18th party congress in 2012, while the latest five-year plan for 2021-2025 demanded an action plan to achieve clear progress towards realizing this objective fully by 2050.

Common prosperity is defined as a more equal society with better social welfare, not egalitarianism, and entails further household income growth, better public services, stronger social safety net, narrower income gap between different groups, regions and rural-urban areas.1 Progress towards narrowing the urban-rural income gap has been steady over the last eight years,2as illustrated below.The greatest factor in Chinas wealth inequality is home ownership with estimates of it accounting for up to 80% of the difference. The Chinese government understands it needs to address this issue if it is to secure long-term stability.

This narrowing has happened as overall poverty in China is being eradicated. The story is optimistic the baseline standard of living is rising as the gap between urban and rural incomes is being closed.

Even after the formation of the CCP, Chinas century of humiliation continued with the civil war between nationalists and communists put on hold to present a united front against a full-scale invasion from Japan in 1937.

History belongs to the victors, and modern Chinese history reports that the country was liberated by Mao Zedong and the CCP in 1949 and has been building a more secure and prosperous future of its own since then. The Chinese people have looked to distance themselves from the pain and humiliation of foreign direct rule/invasion and re-establish the country as a respected force on the world stage. Furthermore, the modern Chinese state was forged, in living memory, through revolution so there exists a not unfounded fear of re-revolution. Through long-term planning for prosperity of the many, the CCP is mitigating against instability and this ever-present threat.

More recently, investors have begun to worry about sweeping regulatory changes in key sectors. But we need to remember Chinas journey to and beyond that signpost, what it has endured along the way and look at these changes through a wide-angle lens. If not overtly predictable, these changes are rational, and investors should continue to seek opportunities that a well-run, albeit fundamentally planned, economy can create. The timeline below looks at the balancing tensions that China has been managing over the last 50 years and provides context to recent regulatory shifts and the opportunities they may lead to.

With this simple model as an historical backdrop to better understand the rationale for recent regulatory changes, it is worth exploring other events where Chinas recent history has had an understandable influence.

Firstly, the countrys rapid rate of growth in recent decades cannot go on forever not least because the baseline has risen and the population is ageing. There will be a flattening of the growth curve although to a still more than respectable level for most large economies. Nevertheless, Chinas economy will change to deliver a better quality of growth.

Allied to this, and to fulfil the common prosperity pledge, the standard of living for many low-income households must improve. This explains a renewed focus on sectors like healthcare and education with a simultaneous cooling of the property sector. The impetus behind such thinking is highlighted by the increased frequency of Xi referencing common prosperity, as shown below3.

Common prosperity is not new

The slogan: A house is for living in, not for speculation

Rising house prices can and do redistribute wealth within an economy increasing the wealth of the haves, homeowners, but effectively reducing that of the have nots, those yet to own a house. The property sector, while fundamental in raising peoples living conditions, should be seen as part of the get-rich-first attitude, which has been encouraged to propel China down the road of economic development. Although extremely important and housing must be both affordable and accessible property is not a strategic sector as it will not deliver quality growth.

China has recently hit the headlines, and raised investor heckles, through two major credit events involving property developer Evergrande and distressed debt asset manager Huarong in addition to the introduction of new regulations. It is important to understand the linkage between these events.

China experienced breathtaking growth, fuelled by rapid industrialization, after joining the World Trade Organization. This growth was prompted by Chinas flirtation with western capitalism. Evergrande and Huarong are classic symptoms of agency theory, where the management of these companies embarked on aggressive debt-funded growth at the expense of the interests of other stakeholders, including shareholders. A critical difference between the two is that Huarong is 61% owned by the Ministry of Finance, making it difficult for Beijing to distance itself from its debt, whereas Evergrande is a private conglomerate.

Huarong looks to have been bailed out by the government to prevent embarrassment and avoid what commentators predict could be Chinas Lehman moment. Evergrande, on the other hand, has been left to meet its fate as market forces direct.

Evergrande is the story of a private, street-smart operator. The company was opportunistic and aggressive on the way up, and grew rapidly through debt. This model worked for a while but Evergrande failed to see the tide turning in time despite this being well signalled by the government. Evergrande was collateral damage, its business model an obstacle in the way of what China is seeking to achieve in redistributing wealth and focusing on more strategic sectors.

Despite the reaction of investors to the Evergrande and Huarong credit events, the governments handling of them was predictable. Prior to 2018, the government was trying to rein in leverage, especially in the real estate and local government sectors, but this was interrupted by escalating trade tensions with the United States and then Covid-19.

The governments hardening attitude to real estate was always going to be a bold move as construction and its supply chain account for 25% of the Chinese economy half of the worlds cranes are in China and up to 40% of local government fiscal revenue4. But policymakers are keen to deleverage a sector that has experienced bubbles that affect lives and livelihoods. As the chart below demonstrates, wealth is being built in the real estate sector and this, set against the articulated strategic thrust of the government, is creating and exacerbating inequality.

The states growing influence in tech

China aspires to be a technology-driven country. The pace and depth of the uptake of technology and innovation is colossal. During one of our annual trips to China in 2016, my European husband took our young daughters to paint pictures at a market stall in the southern city of Guilin, while I was away meeting local issuers. My daughters (and husband) would sit on tiny plastic stools around tiny plastic tables arranged in such a way as to be as far as possible away from the moped rat runs a scene that would be replicated across towns and cities in China at the time.

As he had done on many occasions in previous years, my husband ordered three ice lollies in broken Mandarin from the adjacent street stall and held out a 10-yuan note. To his surprise, his money was refused; the street vendor would prefer to turn down the sale than to take cash. He told my husband, No WeChat, no deal. This was a clear illustration that the winds of technological change are perhaps stronger and more far-reaching with early adopters in countries looking to catch up compared to those with legacy systems and perhaps populations mostly made up of late adopters.

Tech is a sector of great strategic importance and commands the focus of Chinese policymakers. Tech regulation is not unique to China, and there are a myriad of motivations driving this, including anti-trust and the desire to nationalize big data5.

As things currently stand, big data is the sole property of a few large platforms for China to move up the value chain, it is desperate to digitalize the economy and believes big data should be a national resource and open to everyone. This is a clear ideological fracture with the way many other governments view data, personal privacy and competitive advantage.

The recent introduction of regulations for the tech sector has perhaps been implemented without enough thought on the wider repercussions although it is unlikely the governments motivation is to attack the private sector nor close its doors. History has hopefully taught China that a closed-door approach is risky, perhaps allowing its rivals to again surge ahead.

A contemporary example of Chinas learning from history, being open to outside ideas, and having a willingness to learn from others in order to catch up is its reaction to US trade tensions. From March 2018, the restrictions imposed by the US on high-tech goods made policymakers sit up and take notice. If China really wants to be a powerful and well-diversified economy, it must redirect resources and soon. Time is of the essence in the face of a less extreme, yet more difficult to handle, US administration6. Too much of the economy is currently focused on construction and infrastructure at the expense of adequately resourcing high-tech and more strategic sectors.

Education for all?

Another example in the drive for common prosperity that aligns with the founding ideas of the CCP is the education sector. For centuries, the education system has been based solely on meritocracy; a public service central to the implementation of creating and maintaining a fair and inclusive society.

In the context of education being a force for public good, it could be perceived that any for-profit provision is not wholly desirable. It is extremely important for the children of Chinese families to get into good schools and as the exam system is clean, the only way to progress is to study hard. This is where private and public equity-funded organizations stepped in to exploit this need and, in the process, create a profitable after-school tutoring sector.

Unfortunately, the increasing price of after-school tutoring opportunities to get into the best schools became unattainable for those outside the affluent middle class, which did not fit well with the vision of China for 2049.

There was a double whammy when it comes to demographics. China is rapidly approaching an ageing population the countrys working population peaked in 2012 and needs many more higher-value workers (better educated and prepared for the challenges of the 21st century) entering the economy. The current birth rate in China is approaching zero, which carries huge risks for economic growth, a situation that has recently been exacerbated by the increased financial burden of raising a family and rising housing costs.

This obstacle must be removed or at least reduced to allow better conditions for economic (and family) growth. A second large part of this burden, after the cost of housing, is the perceived need for expensive after-school tutoring for the child to be a success.

To fulfil its pledge to create common prosperity, to fit with its desire for quality growth, and to fit with the culture of a long-term planned economy (perhaps at the expense of market sentiment), the government felt the need to act aggressively and decisively, with strict and comprehensive regulations to make the after-school tutoring sector not-for-profit.

This has had a significant impact on the education sector but also sent shockwaves through other sectors and spooked international investors, although these actions must also be viewed as rational in the context of Chinas history and the issues it faces today and tomorrow in its search for equality, sustainable growth, social cohesion and fundamentally the stability of the CCP.

Navigating the next fork in the road

As a result of the global pandemic, questions have been raised about the role of governments in an economy, and we have seen an expansion of their influence especially in developed economies.

China has staged a GDP per capita growth miracle, which has risen from US$500 to US$10,0007 in 25 years. While this has led to improving living standards, it masks important details. During this period, it has been necessary to create an environment where some have become super rich to catalyze economic growth. Relative to developed markets, China still lacks a sophisticated tax system and social security safety net, which explains why the government is not satisfied with the progress it has made in lifting its poorest citizens out of poverty.

To deliver on the goal of common prosperity, China wants to further reduce the fat tails in GDP per capita. The chart below for 2018shows how China has its desired bulge in the middle compared to its near regional neighbour South Korea (albeit on a different path)8, but believes there is work to be done to better distribute wealth in line with the pledges made by the CCP a century ago. In some respects, this is what continues to drive modern-day China.

Source: McKinsey Global Institute, China and the world, July 2019

While there should be no doubt that Chinas recent policy changes have been motivated by political goals, there is also an economic rationale in the efforts to channel resource where it is needed for the common good. It is an ambitious programme that would doubtless only find fertile ground in a state where the ruling cadres are secure for years to come, with limited to no independent institutions and perhaps what one might describe as a communal culture. This is a different game to the one most international investors are used to playing.

The emphasis on common prosperity and further equality is what will drive a rebalancing of the economy. This will have a flattening effect, but should deliver more sustainable economic growth as well as social cohesion, which makes sense for China at this point in its journey.

China has travelled a long way in the last 100 years and perhaps it doesnt really matter what it says on the signpost. It will remain a planned economy that will look for opportunities for international collaboration with its own twist. For investors, there will continue to be attractive opportunities for those who understand where China has come from, recognize why it is on its current path, and heed its signals.

Amy Kam is a senior portfolio manager at Aviva Investors. Based in London, she co-runs Aviva Investors emerging markets corporate bond strategy.

*****

1Common Prosperity and Policy Implications - UBS

2 Common Prosperity and Policy Implications - UBS

3 Bloomberg

4 Ting Lu, Nomura China Economist

5 Thanks to Becky Liu of Standard Chartered Bank for valuable insight during our conversations.

6 Thanks to Ning Zhang of UBS for many extremely helpful discussions on China growth and US-China confrontation.

7 World Bank data.

8 McKinsey China and the World: inside the dynamics of a changing relationship, July 2019.

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Regulatory shifts in China: A new fork in the road? - The Asset

WASHINGTON As Democrats push ahead with President Joe Bidens $3.5 trillion rebuilding plan, theyre promising historic investments across the arc of an education from early childhood to college and beyond in what advocates describe as the most comprehensive package of its kind in decades.

The education provisions in Bidens Build Back Better proposal would serve as a bedrock for schooling opportunities for countless Americans and test the nations willingness to expand federal programs in far-reaching ways.

Equity is a focus, as it seeks to remove barriers to education that for decades have resulted in wage and learning disparities based on race and income. And by expanding early education and child care programs, it aims to bring back workers, especially women, who left jobs during the COVID-19 pandemic to look after children whose schools were closed.

All told, Americans would be entitled to two years of free preschool plus two years of free community college. Millions of families would be eligible for expanded child care subsidies. And there would be more federal financial aid for low-income college students.

We havent done anything like that in my memory, said Jessica Thompson, associate vice president of the Institute for College Access and Success, an education nonprofit. Its the dream.

Congress is working to meet Mondays self-imposed deadlines, and Bidens broader proposal could come before the House later in the week. But Democrats must first overcome divisions within their own ranks over the scope of the plan. The $3.5 trillion proposal reaches nearly every aspect of American life, from health care and taxes to the climate and housing, largely paid for by raising taxes on corporations and the wealthy.

The price tag will likely drop and ambitions scaled back to appease more centrist lawmakers wary of big spending. But the cuts are drawing concerns from progressives and others who say they have already compromised enough.

Funding for historically Black colleges and universities, for example, has been slashed from Bidens earlier plans. As lawmakers eye other possible cost-saving moves, money to repair aging school buildings could lose out.

At a recent House committee hearing, Rep. Frederica Wilson, D-Fla., argued that any more cuts could jeopardize the success of its education programs.

Even with the robust investments proposed here, we are still shortchanging vital programs, she said.

Democrats are pushing ahead on their own because Republicans decry the proposal as a step toward socialism that will worsen inflation and strain the economy. They argue that free community college will benefit wealthier students who access the resource, at the expense of those with lower-incomes. And even on child care, which typically brings bipartisan support, Republicans say the plan goes too far.

We should be focused on ensuring hardworking taxpayers can find the best care for their children rather than blindly throwing money at the problem and calling it a solution, said Rep. Virginia Foxx of North Carolina, the top Republican on the House Education and Labor Committee.

Taken together, the $761 billion in education investments make up a fifth of Bidens total package. Theyre intended to provide a stronger academic start for children, especially those from low-income families. The higher education plans aim to get more adults into college and help them graduate with degrees that will lead to higher-paying jobs.

Even if the package is approved over solid GOP opposition, some of the marquee education proposals would face a big hurdle: getting buy-in from states.

For example, the community college and preschool plans would apply only in states that opt in and cover a portion of the cost. Supporters worry that some states will reject the programs over political grounds or to avoid the cost.

Democrats proposal for universal preschool one of Bidens campaign promises would create new partnerships with states to offer free prekindergarten for all 3- and 4-year-olds. The federal government would cover the entire cost for the first three years before scaling back until states are paying 40%. After seven years, it would end or need to be renewed.

A separate provision would expand child care benefits to a wider swath of families, and cost for families would be capped at no more than 7% of their earnings. Unlike other aspects of the agenda, it wouldnt require state participation cities or counties could opt in even if their states dont.

With free community college, Biden hopes to deliver a benefit that hes been pushing since the Obama administration. Under the proposal, anyone in a participating state would be eligible attend two years of community college without paying tuition.

States that opt in would get federal funding through a formula; they eventually would be asked to cover about 20% of the cost. The bill would provide enough funding to support the program for five years.

Other provisions include a $500 increase to the maximum Pell grant for low-income college students, new investments in teacher training programs and $82 billion for school infrastructure. In a move heralded by college affordability advocates, it would also make federal college aid available to students in the Deferred Action for Childhood Arrivals program.

The plan has been lauded by education advocacy groups, even though many were hoping for a bigger increase to the Pell grant program.

Denise Forte, interim CEO of the Education Trust, said the bill has the potential to open new doors for communities that have long been left behind. But she said the plans success will largely rest on its acceptance by states.

Some states may see the barrier as too high, even though theres a significant return, she said. And some of the states that may not be willing have the highest proportion of students of color who lack access across the range of these issues.

Theres also criticism that the bill fails to deliver some of Bidens promises, particularly to Black Americans and other key voting groups that helped deliver him to the White House.

In previous proposals, Biden called for at least $45 billion to support research at historically Black colleges and universities. The bill includes just $2 billion for that purpose, though, prompting pushback from HBCU leaders who issued a letter on Wednesday requesting several more billions of dollars.

Tensions have mounted over the issue in recent weeks, with some Democrats in the Congressional Black Caucus threatening to withhold support from the bill unless more funding is added.

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Biden plan seeks to expand education, from pre-K to college - The Columbian

LAHORE:Chinese Acting Consul General in Lahore Peng Zhengwu has said that keeping in view the daunting challenges to world especially cold war, COVID-19, rising unilateralism, conventional and non-conventional security issues and so on which together pose a severe threat to global and regional security, there is an urgent need for human society to seek out a new philosophy and make the international system and order fairer and more reasonable.

According to a press release issued on Sunday, he said that over the past 72 years weathering all odds and getting over multiple crises, China had witnessed profound and transformative change and it was the Communist Party of China (CPC) that made this change possible.

He expressed these views at a seminar titled The 72nd Anniversary of the Founding of the Peoples Republic of China and President Xis Governance organised by Institute of International Relations and Media Research (IIRMR) in a local hotel.

Chinese diplomats, scholars, academicians, analysts and others attended the seminar held in connection with the celebrations of the 72nd anniversary of the founding of the Peoples Republic of China known as China National Day set to be marked on October 1.

Mr Peng said that CPC had led the Chinese people to win a complete victory in eradicating absolute poverty. It has raised Chinas per capita GDP from less than US$200 at the start of the reforms and opening up to today over US$10,000. China has met the poverty eradication target set in the United Nations 2030 Agenda for Sustainable Development 10 years ahead of schedule, and according to the World Bank's international poverty line, the number of Chinese people lifted out of poverty over the past 40 years accounts for more than 70 percent of the global total, he added.

Peng heralded that China would continue to propel the CPEC forward and termed the 10th JCC precursor of good fortune. He said, President Xi put forward a concept building a global community of shared future since 2012.

IIRMR Chairman Muhammad Mehdi dubbed CPEC as a golden opportunity that should never be missed. Pakistan can also do the wonders provided Chinese strategy is practised, he said. IIRMR President Yasir Habib Khan said Pakistani leadership must have to meet public demands, otherwise, misfortunes might spiral out of control.

Additional Foreign Secretary (r) Nazir Hussain said that Pakistan needed to harvest the benefits arising from the CPEC phase-ii, especially the special economic zones and to exercise fiscal discipline.

PU Faculty of Law Dean Professor Dr Aman Ullah praised China for investing in its human resource seriously with sustainable economic policies. PU Department of Economic former head Dr Qais Alam rejected the qualms that China wanted hegemony or a cold war with the West. He asserted We should keep a balance between China and the West, working with both powers for common human destiny.

PU Pakistan Study Centre Associate Professor Dr Amjad Abbas Khan Magzi underscored the need to work on agro-based economy to tackle poverty as more than 20 percent of Pakistan's GDP was contributed by agriculture. Forman Christian College University Department of Economics Assistant Professor Dr Salah Ud Din Ayubi said the prospects of the Pak-China bilateral relationship depended on the growing connectivity between the leadership, businesses and people in the two countries in the years to come.

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Chinese envoy for strategy to tackle threat to global security - The News International