Bloomberg News

Executive Can’t Escape Smog in Beijing-to-Shanghai Move

December 17, 2013

Shanghai Pollution

People wearing masks walk along The Bund in Shanghai on Dec. 8, 2013. Source: ChinaFotoPress/Getty Images

Bill Russo moved more than 700 miles from Beijing to Shanghai on Dec. 1 and thought he’d left the smog behind him. Five days later, he was wheezing again.

“What was shocking was how bad it’s been,” said Russo, a vice president at car stereo maker Harman International Industries Inc. (HAR:US) “Shanghai over the years had a reputation of being better,” said the executive, who had some of the fine-particle masks he left behind in Beijing sent to him.

Record levels of pollution this month busted perceptions of Shanghai as a place to escape the smog that’s shrouded Beijing and other parts of China. Worsening air quality in the country’s commercial hub prompted warnings to keep children indoors, spurred companies from Unilever to Uniqlo owner Fast Retailing Co. (9983) to give workers face masks, and may hinder Shanghai’s push to be a global financial center by 2020.

“I felt like I had dust in my mouth and throat all the time,” said Thomas Walser, a manager at a relocation company who moved to Shanghai from Austria in 2009.

After Shanghai ordered vehicles off the road and factories to cut production, Baosteel Group Corp. said it will limit processing of sinter, the iron ore nodules used to make steel. The company that controls China’s largest listed steelmaker also suspended outdoor operations of its chemical facilities.

‘Land Blind’

China (CNGDPYOY) ordered commercial pilots to learn to “land blind” in smoggy conditions, to help address chronic flight delays partly caused by low visibility. Starting next year, pilots flying to Beijing from the nation’s 10 busiest airports must be qualified to land when visibility falls below 400 meters (1,300 feet), the official China Daily said on Dec. 12, citing unidentified people at the Civil Aviation Administration of China.

Spring Airlines Co., China’s biggest carrier outside government control, said it’s training pilots to land in smog. Shanghai’s pollution earlier this month affected operations, the carrier said, declining to be more specific. Pilots in China need to be qualified to be able to land when visibility falls to 800 meters with runway visual range of 550 meters, said Spring Airlines Senior Vice President Shen Wei.

Shanghai’s air pollution index surged to a record 482 on Dec. 6, the worst since monitoring began last year. The air quality index monitored by the U.S. consulate surged past 500 to the “beyond index” level. For at least seven of the first 10 days of the month, the air was considered too toxic to allow children and the elderly outdoors.

Satellite Image

Levels of PM2.5 -- particles smaller than 2.5 microns in diameter that pose the biggest health risk -- hit 602.2 micrograms per cubic meter, or about 24 times the World Health Organization’s recommended limit. A satellite image dated Dec. 7 on the NASA Earth Observatory website showed haze stretching from Beijing to Shanghai.

By Dec. 10, Shanghai’s government said air quality improved to “lightly polluted.” The pollution warning was removed yesterday Dec16 with PM2.5 levels dropping below the World Health Organization’s recommended 25 micrograms per cubic meter deemed to be safe for 24-hour exposure.

Unilever (UNA), the world’s second-largest consumer-goods maker, has distributed face N95 rated masks, which filter at least 95 percent of particles, to employees in Shanghai. On Dec. 6 it told most staff to work from home the following Monday, and a manager’s meeting scheduled for Dec. 10 was canceled.

Hotel Filters

Fast Retailing, operator of Uniqlo clothing shops, handed out masks to employees in Shanghai, the company said in a statement.

Because of the smog, InterContinental Hotels Group Plc (IHG)’s 30 hotels in Shanghai will be cleaning their air conditioning systems more frequently, similar to what they do in Beijing, it said in a statement. In some hotels, staff will rotate air purifiers through the rooms.

In Beijing, air quality was worse than government standards on more than 60 percent of days in the first half, the Ministry of Environmental Protection said in July. Shanghai’s was below government standards on less than 35 percent of the days and had no days rated as “heavily polluted,” it said. The PM2.5 annual standard for cities is 35 micrograms, the report said.

The capital in January suffered its worst bout of air pollution with PM2.5 readings averaging 194 micrograms per cubic meter per day, with an intraday peak of 886 on Jan. 12.

Social Unrest

Exposure to PM2.5 contributed to 8,572 premature deaths in Beijing, Shanghai, Guangzhou and Xi’an in 2012, and led to economic losses of $1.08 billion, according to estimates by Greenpeace and Peking University’s School of Public Health. China has 16 of the 20 most-polluted cities globally, according to World Bank estimates.

Pollution has become the top cause of social unrest in China, Chen Jiping, a former leading member of the Communist Party’s Committee of Political and Legislative Affairs, said in March.

While the worsening pollution alone won’t stop companies from moving people to China, it has “a big impact” on executives with children, said Steve Mullinjer, regional leader for Asia and the Middle East at executive-search firm Heidrick & Struggles International Inc. (HSII:US) The dirtier air “is restricting the type of people they can get or transfer or hire,” he said by phone from Shanghai.

The “living environment” is the top human-resources challenge facing European companies trying to retain talent in China, said Ioana Kraft, Shanghai-based general manager for the European Union Chamber of Commerce.

Pollution Apps

“I can’t recall it being so bad in the 10 years I’ve lived here,” said Kraft, who is originally from Germany. “Everyone was concerned: checking the pollution apps and buying masks. Then the masks were out of stock, the purifiers were out of stock.”

The city has long been seen as more “commercially oriented” and has been a destination for expatriate workers for longer than Beijing, said Simon Lance, China regional director for recruiting firm Hays Plc. (HAS)

Over the past two years, there has been an increase in people considering Shanghai over the capital “just because they felt that the overall environment here is better than cities like Beijing,” said Cheryl Ong, Shanghai-based associate director of recruitment consultant Morgan McKinley China. “Air is the main factor.”

Sales of air purifiers on Alibaba Group Holding Ltd.’s Tmall site surged to as much as six times the daily average in the first week of this month.

3M, Honeywell

3M Co. (MMM:US), which donated face masks to kindergartens in Beijing as well as to traffic policemen in Shanghai, plans to increase production in China after stock sold out on Dec. 6 and 9, said Royce Hua, the company’s corporate communications chief in the country. That might take about three months to achieve, he said, declining to be provide more details.

Honeywell International Inc. (HON:US), whose products (HON:US) range from aviation controls and auto turbochargers to solvents and medical devices, said respirator masks were sold out on its Tmall online store from Dec. 6 to 9.

Sales of building air filtration solutions and air purifiers made by the Morris Township, New Jersey-based company (HON:US) have grown more than 50 percent annually over the past several years, said Lydia Lu, a vice-president for communications. Honeywell has given masks to its staff and a local union is arranging for local employees’ to purchase air purifiers at a discount.

“The opportunity of being here is great because of the opportunity to be a part China’s economic development and contributing to that,” said Harman’s Russo. “The risk you put yourself in is that there are compromises you’ll have to make in terms of quality of life and the risk you’re taking to your health.”

“You can’t live in China, or Beijing in particular, for long before you realize that it’s having an impact on your health.”

To contact Bloomberg News staff for this story: Natasha Khan in Hong Kong at nkhan51@bloomberg.net; Alexandra Ho in Shanghai at aho113@bloomberg.net

To contact the editor responsible for this story: Frank Longid at flongid@bloomberg.net


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  • HAR
    (Harman International Industries Inc)
    • $105.3 USD
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  • HSII
    (Heidrick & Struggles International Inc)
    • $22.92 USD
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