Much like how London dealt with 'Killer Fogs' hundreds of years ago when not enough wind was clearing the air; China can't completely ignore the environment because the costs are simply getting to high. However, it's going to be a long time before they embrace western style pollution controls, because there is a big gap between killing people today and killing them in 40 years.
http://fortune.com/2017/01/10/china-red-alert-pollution-pm2-...
Anyone who thinks the environment is even remotely a reason for China's success in manufacturing is frankly ignorant.
Perhaps I could give them more credit for real progress, but the root cause is still a disconnect from what's on the books being a long way from what's enforced.
Their smog problems largely relate to cars that would not pass US annual emissions standards from 20 years ago. Similarly coal is never 'clean' but it's not that expensive to dramatically reduce particulate emissions.
And yes, cheap labor etc plays a huge role in some types of manufacturing. But, by subsidizing the inputs and lax enforcement of regulations you see dramatic shifts in many types of production well past their less harmful competitive advantages.
Their governments are going to work to improve their standards of living one way or another. If they do it with our cooperation, with our more efficient technology, and with our more efficient production practices they will be able to grow in a way that is less environmentally damaging than the Industrial revolution was.
Enriching them and giving them access to education and giving women reproductive choice is also the only way we are going to foster the necessary reduction in birth-rates we will need to live on Earth sustainably.