China's tremendous economic growth has not been all positive, especially from ecological point of view, with problems like air and water pollution. China's government has taken some serious steps to reduce extreme pollution levels, but things haven't changed for better, in fact most recent data showed that China's air and water pollution are increasing. It is because China's need for energy is constantly growing, and its main energy source is coal. Coal combustion releases many "dirty" particles into air causing air pollution, and China has also recently overtaken USA becoming the world's biggest CO2 emitter.
The latest study showed that only 38 percent of 585 cities surveyed recently registered air quality comparable to national health standards, down from about 45 percent in a 2005 study. Water pollution has also increased because healthy water sources have reduced by additional 7,24 % since 2005. A World Health Organization (WHO) report estimated in 2007 that diseases caused by air pollution kill 656,000 Chinese citizens each year, and polluted drinking water kills another 95,600. China has the highest annual incidence of premature deaths caused by air pollution in the world. There have been also trends of high miscarriage rates and lower IQ rates noticed among population.
Coal powered plants, though dominant are not only source of air pollution in China as air pollution is also caused by vast number of China's vehicles. China's government started solving this problem 10 years ago but situation is only becoming worse mainly because provincial and local-level authorities tend to achieve economic growth at all costs which undermines central efforts to make clear progress on air and water pollution.
Such high rates are not only catastrophic only from ecological point of view, there is also tremendous damage to China's economy as well. According to World Bank report in 2007 air pollution is costing China 3.8% of its GDP while water pollution is costing additional 2%. This report also estimated that combined health and non-health costs of air and water pollution had cost China's economy in 2007 at around US$100 billion.