This is an interesting article regarding China's economic growth and its possible negative effects to its environment, AEI - Short Publications. It seems that China's first hurdle with its enormous economic growth is how to deal with the public and international media reaction to environmental problems. The article begins with several stories of protests by the Chinese people, and the known cover-ups by the Chinese government relating to chemical spills, dangerous power plants, chemical and pharmaceutical plants in bad urban and residential areas.
However, the article goes on to show that China has become a "real-world test case" (AEI.org et. al., December 2005) for a theory known as the environmental Kuznets Curve (EKC). EKC refers to the relationship between the economic growth and the decreasing quality of the societies environment. Under the EKC theory, it is believed that the growth of the economy causes a deterioration of the environment. This deterioration continues until the societies median income increases, and can then support improvements to the environment.
If this theory is correct for China, there are examples of improvements: China "has the largest fleet of natural gas buses in the world"; they are currently more aggressive than the U.S. in adopting ambient air quality goals; and the amount of discharge of industrial petroleum-related pollutants have reduced by 50% over the past 10 years.