Not only is China actually making more of an effort to enforce its labour law, finally; but it is also rapidly increasing minimum wages, due to rising inflation. The problem is if increasing utilities and raw materials (for food for humans/animals and for industrial manufacturing) increase, and the response is that salaries increase, this will lead to a spiral of increasing inflation.

I am no economist, but this seems a bad thing -yet the government cannot hold salaries as they are as prices are increasing so much. One reason why prices are increasing (admittedly a very small reason) is that prices are not starting to reflect their true costs; i.e. without subsidies. Few prices actually reflect their real cost, including the environmental footprint, but it is a start.

This start is good for CSR, in that prices that take into account so-called ‘externalities’ is what is needed, and as desperate as the World is for fast change, such sudden change might be too sudden, leading to rising inflation and related social tensions. What will happen as prices continue to rise? Will consumption start to drop? This is what is desperately needed. We need a society that is not based on consumption, as we do not have enough resources to consume! If the end result is a society that is less consumption dependent, that is much more sustainable.

Unfortunately in the process to that new system (which we can barely even envision, consumption is so fundamental to our current economic system), there will be many shocks affecting employment, food security and poverty. As always, the poorest will be the ones least able to weather these shocks, and most affected by them. In China, with 300 million people supposedly lifted out of poverty in the last 30 years we have already seen the revision of the numbers in poverty, which is massively higher once taking into account Purchasing Power Parity. As Inflation increases, as our consumption based system creaks and groans, not only will many of these 300 million fall back into theoretical poverty through the ongoing revision of the poverty line, but they will also suffer real poverty as their meagre incomes struggle to keep up with their requirements to buy life’s basic necessities. As china grapples with its environmental crisis, the last thing it needs is to have to deal with another poverty crisis. Of course, what many of us realised a long time ago, is that poverty and the environment is inherently related. By reducing poverty but destroying the environment, China has been living on borrowed time. The environmental crisis is catching up, and it might drag more people into poverty as a result… showing that much of China’s development has been temporary and easily reversible. We have to hope this will not happen; that we can solve the environmental crisis and prevent another extreme poverty crisis.