Beijing’s Air Problem: Will It Scare Away Businesses?

HYPERLOCAL

Life in Beijing can be harmful to one’s health. The average 18-year-old living in China’s second-largest city today will spend about 40 percent of the remainder of his or her life dealing with serious ailments such as cancer and heart disease, according to a report by Beijing’s Center of Disease Control and Prevention.

Water pollution and contaminated food may be among the reasons; so, too, is the city’s poor air quality. The Beijing Environmental Protection Bureau reported that the average density of fine particle matter (the deadliest form of air pollution) in Beijing reached 85.9 micrograms per cubic meter in 2014. That is 1.5 times higher than the standard 35 micrograms per cubic meter set by the World Health Organization (WHO). The city also had 175 days with light-to-heavy pollution last year, with most of it coming from vehicle exhaust and residential coal-fired emissions.

Simply put, businesses want to be in Beijing, but not at the expense of the health of their employees.

What does this mean for the future of international business in the city? Quite a bit, according to CBRE’s Property and Pollution: The Impact of Smog on the Beijing Office Market report. This study, which surveyed 73 Beijing-based office occupiers, found that poor air quality is the second-biggest concern for businesses, next to high rent.

Still, Beijing remains an attractive place for corporations because it is a major hub for the Asian market, has abundant human resources with its population of 21 million inhabitants, and is close to key clients and suppliers.

“While poor air quality is a major concern, Beijing remains the preferred location when companies choose their regional or national headquarters,” Tin Sun, associate director of CBRE Research Northern China, told China Daily USA.

Simply put, businesses want to be in Beijing, but not at the expense of the health of their employees. A report by the American Chamber of Commerce in Beijing surveyed 365 foreign companies and found that 48 percent of them revealed that concerns about pollution were keeping senior executives away. Also, other companies have reported a loss in productivity due to an increase in employee sick days that can be attributed to pollution.

Some businesses are offering high-impact employees extra perks in an effort to keep them in Beijing. “We are seeing some companies reverting to 1980s and 1990s hardship packages for executive-level candidates in cities that are hard hit with pollution,” Angie Eagan, managing director for China at recruitment firm MRIC, told Bloomberg. “These packages are shaped around executives leaving their families in their home country and receiving an allowance for frequent home trips.”

A view of the Beijing Central Business District's skyline.

A view of the Beijing Central Business District’s skyline.

Perks are a short-term solution, though. The long-term goal is to make Beijing a safe and attractive place to live in. One way this can happen is through innovation in building design. For example, installing indoor air purification systems has become a key strategy for landlords to attract and retain office tenants. These conditioned environments are already seen in Beijing schools, recreation centers and malls.

Perks are a short-term solution, though. The long-term goal is to make Beijing a safe and attractive place to live in.

According to CBRE Research, an increasing number of landlords are also making sure air purification standards in older buildings are being met. They are improving “air tightness” in buildings, so there is no ventilation between building interiors and the outside. Air quality monitors are being installed to keep track of pollution in real time, and PM2.5 filters are being set up on buildings, with trained personnel hired to maintain them.

These steps could help prove to skeptics that there is a focus on improving conditions: There’s a broad lack of knowledge regarding air purification systems among major office tenants in Beijing, which may explain why 62 percent of respondents in the CBRE survey believe air purification plans are a marketing ploy created by developers.

The Beijing municipal government has already taken steps to reduce major air pollutants by 30 percent compared to 2010. Such a measure has made some occupiers feel more optimistic that government regulation will improve air quality over the next three years.

The demand for solutions could also open the door for outside businesses that have creative ideas for reducing pollution. Dutch entrepreneur Daan Roosegaarde is building machines that can suck smog from the air. He believes his invention could inspire Beijing residents and businesses to follow suit, creating a culture in which clean, sustainable living is the norm — and not just talk.

“I want to move away from statistics and the usual factsheet discussion,” Roosegaarde told The Guardian. “If you create a place that’s 75 percent cleaner than the rest of the city, you create a powerful incentive for people to clean the whole city.”

Artist rendering of Daan Roosegaarde's Smog Free Park project.

Artist rendering of Daan Roosegaarde’s Smog Free Park project.

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