Since the initiative of economic reform in 1978, China has enjoyed high economic growth for three decades. This growth has however been driven mainly by export- oriented, labour-intensive manufacturing activities. In 2008 the total value of China’s export accounted for 32% of the country’s GDP. In the mean time, tens of millions of workers were employed in the export sector. As a result the Chinese economy is very vulnerable to external shocks such as the 2008 US sub-prime credit crisis and the resultant recession and decline in demand for Chinese exports. To sustain economic growth in the future, China’s policy makers are keen to boost the role of innovation in the country’s economic development so that the economy will eventually be transformed into a knowledge-intensive one which is less dependent upon external markets (Schaaper 2009, Zhang et al. 2009). This goal is clearly envisaged in the country’s “Medium-to-Long Term Plan of National Science and Technology Development (2006-2020)” announced in February 2006.
Pollution is one aspect of the broader topic of environmental issues in China. Various forms of pollution have increased as China has industrialized, which has caused widespread environmental and health problems.
The index has been close to the top of the charts(PSI). Smog over BeiJing makes the sun a thin orange disk and adds a mysterious aura to the city as pedestrians and buildings fade into the gloom. On the worst days, people keep children indoors and scuttle about in masks with only their eyes showing.

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