Since the seminal Grossman and Krueger (1994) QJE article examining the empirical relationship between GDP and pollution, much has improved in the area now known as the Environmental Kuznet's Curve literature. The basic argument still goes something like this - when incomes are low there is very little pollution, as incomes rise so does pollution, then as income rises further pollution levels begin to fall. There are differing theories as to why this happens and there are different results in the literature, both, confirming and debunking the existence of this curve. There is no denying that China is on the upward portion of the curve. There are, however, some serious questions to be raised - including but not limited to (1) when will China's growth lead to improving environmental conditions? (2) Will it be too late to save China's environment - clearly it is already too late for the millions of sick and dead?, and (3) how should we be measuring the marginal cost and the marginal benefit of another unit of growth?
If you are interested in what others are saying - check out the comments over at The Jolly Green General.
I almost forgot - Go Dukes! (JMU) and Wolverines! (UMich). That's for John and Tim