Firstly, the Chinese Leadership has realized that China needs tomove away from rapid economic development, towards sustaineddevelopment that takes into account environmental and socialproblems. However, they not wish to see a significant decline inChina’s real GDP growth since that is likely to have disadvantageouseffects on the country’s employment conditions and stability. Vastnumber of rural immigrants to urban areas and increasing numbersof urban residents are desperately in need of jobs that can only becreated by a relatively high rate of sustained growth. In this sense,10
China is not exempt from the classic controversy of employmentversus environmental policies.As a long-term strategy for the Chinese government, the GreenGDP movement in China is certainly gaining momentum. However,when it comes to enforcement, the central government is facingdaunting obstacles from local governments or even from differentdepartments at the central level due to the divergence in theirinterests. For example, during the two year period of researchleading up to the publication of the “China Green NationalAccounting Study Report 2004”, several provinces were extremelyreluctant to co-operate with SEPA to carry our the work andemployed various ‘strategies’ to make the Green GDP indexfactually meaningless. In May 2005, Li Deshui, the then director of NBS, questioned the necessity of calculating the Green GDP forChina, two months after the start of the national programme. Li’ssuspicion showed a degree of inconsistency between the NBS andSEPA.Compounding statistics was a crucial aspect for most Chineseprovinces. They had the responsibility to account for the measuresof forests and other natural resources. Hence, some regions stood tobenefit from this calculation, seeing in it an opportunity to demandgreater subsidies from the central government as their environmenthas been depleted. However, many more local governmentsobjected to the scrutiny that the Green GDP would put on them andas a result of pressure they placed on the central government, thedetailed regional breakdowns were not published. In China, theefficiency of a province is largely judged by its economic growth. The provinces also had incentives to project incorrectmeasurements that favored their individual economic progress. Thisdifference of interests between the state and local governments ledto incorrect values of natural capital, pollution, etc.Lastly, China was never a global leader in sustainabledevelopment like Norway or Germany. Even by 2004, China was stillonly accounting for pollution damage when the Green GDP proposalwas announced. Simply put, China took on a task it was notprepared to finish. For most academic institutions, there was littlesurprise that China failed. Nonetheless, this bold attempt broughtback into focuses the difficulties and problems in the application of Green GDP Accounting