Any economy, especially one growing as fast as China’s, is going to produce pollution and waste. By utilizing cheap energy sources, China has been able to produce a lot of things very fast, and unfortunately, the cheap sources of energy are usually things like oil or coal, which are sort of dirty.
However, according to a survey in 2006, consumers are very environmentally conscious, ranking environmental concerns even above economic concerns. As a group, Chinese consumers are extremely conscious of which companies are the most green and produce the least waste and pollution.
So, the answer is that China has been able to grow economically in a relatively green way. This, however, is not because of anything that the government has done, but because of the consumers in China. Consumers anywhere in the world have the power to support green companies and hurt polluting companies simply by buying from the green companies instead!
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