Nearly everyone knows the success story of China’s economy, growing at a double-digit annual rate for the past several years. There is a dark side to this picture, however. China has the dubious distinction of being one of the most polluted countries on the planet. Ordinarily, this topic is addressed in technocratic seminar topics at environmental forums and the occasional press article, all of which are more or less the same. China is usually presented as a wanton polluter, unwilling to sacrifice economic growth for a clean environment.

The reality is somewhat different, and like in all things, China is a land of contrasts. Often-unfiltered (and always controversial) incinerators and steel plants using dirty coal operate side by side with electric bicycles, cruising the bike lanes present in every city. There are more operating electric vehicles in China than any country in the world, Chinese batteries from the China Aviation Lithium Battery Company being a favorite of do-it-yourself electric car enthusiasts. You’re as likely to see windmills as coal plants in China, sometimes operating next door to dubiously licensed electronics recyclers dumping heaven knows what into adjacent waterways.

China is not a first world country, and it’s not a third world country either. It’s both at once, and is rapidly industrializing. In a similar stage of American development, an Ohio river caught fire. Despite that and the Love Canal disaster, we still haven’t learned. Still, pollution is a real problem here. No matter how you measure it (official monitoring here is less rigorous than that performed in the US and Europe), the air quality is bad and getting worse. Beijing has some of the dirtiest air in the world. The Asia Society has an excellent Web page outlining the challenges, and the visuals are stunning. Watch the video and check the “Room With A View” tab for a day-by-day view. The US State Department also runs an EPA-certified air monitoring station at their embassy in Beijing. This device samples air quality data hourly and posts it to their Twitter feed. In all fairness, this is only representative of the air quality in the immediate vicinity of the US Embassy which is located in a busy commercial area. Still, I use this as a personal resource to decide whether it’s safe to go outside.

Despite it all, China is making significant and rapid progress. They’ve jumped on recycling in a very big way since my first visit here six years ago. Thousands of cars are staying at home due to fast, clean and cheap subways. The government just started a program to lure highly educated diaspora in specific, targeted industries (mostly related to green technologies) back to China with offers of startup capital and generous tax incentives. A recycling and environmental theme park is even opening at the former site of the 2008 Olympics. The pace of change here is head-spinning to those accustomed to the paralyzed, partisan ways of Washington DC. Just this week, several significant and far-reaching policy changes were announced, any of which would have required months or years of deliberation in the US.

President Obama says “China is not a friend, and they are not an enemy. They are a competitor.” I agree, and I tend to favor upstarts when it comes to wagering. No country in the world needs green energy technology more than China; the economy simply cannot continue to grow by double-digit percentages built on last century’s energy infrastructure. At some point, it just becomes unsustainable. If China wins the race, the US is in big trouble. But if China loses the race, the world is in big trouble. For America to win, China doesn’t necessarily have to lose–but I think we’ll all need to agree on a different set of rules soon. The planet can’t afford the status quo any longer.