Companies must externalize as many costs as possible in free-market capitalism. Without adequate government protections you will end up with this kind of environment.
from the New York Times:
Nearly 14,000 Companies in China Violate Pollution Rules
By EDWARD WONG
“Environmental inspectors in northern China have found that nearly 14,000 companies, or 70 percent of the businesses they examined, failed to meet environmental standards for controlling air pollution, according to a state news agency report.
The inspectors working for the Ministry of Environmental Protection came up with those results after two months of work across 28 cities in northern China,…..”