Fortune’s impression about China: the massive, massive infrastructure build-out, the biggest in the history of humanity.

The fast growing Chinese economy posts many challenges to the world. One of such is pollution. In 2002 during his visit to Baylor University, I asked Robert Fogel, the Nobel-winning Chicago economic historian, about his view on China’s pollution problem. His answer was startlingly simple —Just compare today’s China to Chicago in the early 20th century: Chicago back then was a fast growing dirty butcher town and transportation hub, and now look at what Chicago has become.

The message conveyed in Fogel’s simple answer is two fold: 1) for poor countries, the concern over economic development naturally dominates the concern over environment; 2) Chinese will have the greatest incentives to cure their pollution problem once they realize this can’t go on forever. For this matter, I always think China will come out as the world leader in energy efficiency innovation. Why? China faces the gravest energy challenges so the greatest pressure to innovate and break through in energy-saving technology. What will push such innovation to happen faster is crisis. Yes, I do think China needs (and possibly will have) multiple mini energy crises to make this pressure even greater. But I am optimistic.

An excellent panel discussion on What’s Next for the American economy, with Joseph Stiglitz of Columbia University, Meredith Whitney of Meredith Whitney Advisory Group, Oliver Sarkozy of Carlyle Group, Jack Welch, former General Electric CEO and Austan Goolsbee of White House Senior Economic Adviser.

Part I

Part II