Runners coughed and gagged as they limbered up. Thick smog shrouded the Tsing Ma Bridge. Pollution index readings on this morning in February 2006 were at 149, the highest in months. Any reading over 100 is considered unhealthy.

But the 40,000 runners who had signed up to participate in China’s largest footrace, the Hong Kong Standard Chartered Marathon, were ready to go, unaware of the tragedy ahead. By the end of the day, Tsang Kam-yin, a 53-year-old three-time marathoner would collapse and die about a third of the way through the event. About 20 runners would be hospitalized, many for respiratory ailments. In Internet postings following the race, runners complained about asthma attacks and hacking fits after crossing the finish line. “Everyone who took part in the marathon was at risk of harm to their health from pollution,” Anthony J. Hedley, an official with the department of community medicine at the University of Hong Kong, wrote after the race, chiding the organizers for not taking more precautions.

Many experts, like Wharton marketing professor Z. John Zhang, are calling the 2008 Beijing Olympics a “coming-out” party for the world’s most populous nation. National and municipal governments are investing billions of dollars in sports venues such as the Bird’s Nest in Beijing, the modernist national stadium currently under construction; subway-line extensions, and other infrastructure improvements to make the games a world-class spectacle.

But some wonder whether, as during the Hong Kong Standard Chartered Marathon, air pollution will crash China’s Olympic party and focus world attention on deepening environmental problems that threaten the country’s economic growth.

Transforming Beijing

China is clearly worried about its image. In the Olympic run-up, the government is attempting to transform Beijing into a national model of environmentalism — a Chinese beacon of “greenism.” In a recent interview, Sun Weide, deputy director of the Beijing Organizing Committee for the Games of the XXIX Olympiad, described a Herculean effort by authorities to bring Beijing’s air pollution into line with global standards before the Olympic games. The city has relocated, or plans to relocate, more than 100 chemical, steel and pharmaceutical factories outside the city and replace 300,000 polluting taxis and buses with lesser-polluting vehicles. It is seeking to replace coal furnaces with natural gas furnaces and rushing builders to finish construction well before the Olympic games so that dust from the building projects has a chance to settle. Beijing authorities are building four new subway lines, adding many miles of rails and boosting the efficiency of public transportation.

Improvements are being made, Weide noted, pointing out that in 1998, Beijing recorded only 100 so-called “Blue Sky” days with acceptable pollution. By 2005, the capital had tallied 244 Blue Sky days. “We will meet the air-quality standards of the Chinese government and most cities of the world,” he said. Beijing has indicated it wants to match the air quality of Paris in time for the Olympics — a goal that some observers consider unrealistic.

Environmental experts applaud Beijing’s efforts and suggest that a cleaner Chinese capital could be the legacy of the 2008 event. But they also note that China needs more than a quick-fix for its broader environmental crisis-in-the-making. They say China’s problems stem from a weak legal system, corruption, poverty, two decades of double-digit industrial growth, government policies that put job growth ahead of the environment, and Communist propaganda that over-promoted man’s ability to conquer nature.

The effects of pollution can be seen everywhere. Smokestack factories spew toxins and particulates into the air. Rivers teem with sewage. According to Worldwatch Institute’s State of the World 2006 report, acidification has spread to 30% of China’s cropland. Another study, by the Atlanta-based Georgia Institute of Technology, reports that the range of ozone exposure in agricultural regions in the Yangtze River Delta is enough to reduce yields by 10%.

Environmental officials in Guanxi Province, in southern China, note that 92% of the sewage from the province’s cities flows directly into rivers. Installing treatment plants would cost $400 million, a prohibitively large amount in an area where the per capita income is about $1,500 to $2,000 a year.

China is far behind peer countries in air quality standards. According to the World Bank, 16 cities in the world with the worst air pollution are located in China. The country’s Ministry of Science and Technology has estimated that 50,000 newborn babies a year die from the effects of air pollution. Tens of thousands of factories in the Pearl River Delta, an area where U.S. retailers like Wal-Mart source products for stores, are blamed for polluting Hong Kong. Some have suggested closing the factories in the days before the Hong Kong marathon as a way to help reduce the pollution.

Other countries aren’t insulated from China’s environmental problems. Chemical spills have flowed into eastern Russia, contaminating Russian drinking water, and Chinese-borne pollution has been detected on the California coast. Long reliant on coal for power, China’s emissions of carbon dioxide, the most important global warming gas, are expected to surpass those of the United States in 2009, according to the International Energy Agency.

Pan Yue, vice minister of China’s State Environmental Protection Administration, summed up the problem when he wrote, in a November 2006 commentary republished in the Wall Street Journal, that “China is dangerously near a crisis point” with its environment. A third of China’s people drink substandard water and a third breathe badly polluted air, according to Pan. “True, China has made the kind of economic advances in three decades that required 100 years in Western countries. But China has also suffered a century’s worth of environmental damage in 30 years.”

Weak Legal System

Eric W. Orts, professor of legal studies and business ethics at Wharton, says that pollution, if left unchecked, will drag down China’s economic growth and result in huge healthcare costs. In addition, China’s pollution will, over time, erode its competitive position in the global economy. “If you want to be an international player, you have to be a place where executives can come and live and not worry about their kids getting lung cancer.”

One obstacle to faster environmental improvements is a weak legal system, according to Orts. Without the threat of economic damages from civil lawsuits, pollution controls have a “classic externality problem.” There is no outside legal mechanism to punish polluters. “Mao [Zedong] basically killed or reeducated most of the lawyers and judges. There was a whole generation wiped out by the Cultural Revolution….You really didn’t worry about contracts or personal property under Mao.”

Close links have developed between private business and local governments, which jointly operate enterprises, even though local governments are charged with enforcing environmental and economic regulations. Yet enforcing environmental laws often works against the economic interests of local government. “The system is corrupt and there are no lawyers who can bring a basic lawsuit,” Orts notes.

China hasn’t embraced grassroots movements or non-profit organizations, such as Greenpeace or the Sierra Club, which have been forces for cleaner environmental movements around the world. The central government cracks down on non-governmental organizations, or NGOs, “because it’s not part of their view of how society develops,” Orts says.

Yet, he adds, some hopeful signs are visible. The Chinese government has commissioned world-class sustainability architect Bill McDonough and partner Michael Braungart to design a prototype green city. McDonough believes a city should be ecologically sound, like a forest. “The energy systems will be solar. China will be the largest solar manufacturer in the world,” McDonough noted in a BBC report. (Some experts say, however, that China’s pollution prevents the sun’s rays from getting down to the ground, thereby reducing the capacity of solar panels to generate energy.)

In addition, the Chinese government is boosting its investments in the legal system, says Orts. The clean-up effort related to the 2008 Beijing Olympics shows “at least they understand that this is a major issue.”

Zhang, who was raised in China, agrees that China has a pollution problem. But, like many Chinese, he is more forgiving of the situation. He sees improvements that Westerners — who may be experiencing China for the first time — don’t see. Many cities, for instance, are planting trees and beautifying areas. The nation is climbing out of deep poverty and environmental damage is one price it has had to pay for prosperity, Zhang notes. “The tolerance level is higher.” Stay a few days in Beijing and breath the air and “you don’t feel that terribly bad. When you are hungry, you worry about food, no matter how dirty you are.” The analogy that the Chinese offer is that “the nation is a construction site and everything is not tidy,” Zhang says.   

As for the Olympics, the Chinese will present a modern city focused on the best environmental practices. It will be, in some ways, a monumental sales pitch to other Chinese cities and the world — showing what great strides the country is making. The central government likes to establish models and then have those models replicated around the country, Zhang says. “So in that sense, you are building up a model city [for the 2008 Olympics]. You are building a showroom.”