OSD’s Annual Report to Congress on the Military Power of the People’s Republic of China has some illuminating – and somewhat staggering – insight on the current state of affairs with respect to China’s environment and how it influences their national strategic policies. It’s a fascinating look at how the emerging communist nation is dealing with the realities of becoming a global superpower.
Under the heading "Developments in China’s Grand Strategy, Security Strategy, and Military Strategy" the document includes this bullet:

Immediately following the Congress, Shanghai Party Secretary Xi Jinping and Liaoning Party Secretary Li Keqiang were appointed to the Politburo Standing Committee (PBSC), putting them in line for top leadership positions at the next Party Congress in 2012. Party leaders also endorsed inclusion of Hu’s ideological concept of “scientific development” (ensuring balance between economic growth and social and environmental needs) into the Party Constitution.

More insight on China’s strategy and priorities:

Regime survival and the perpetuation of Communist Party rule shapes the strategic outlook for China’s leaders and drives many of their choices. As a substitute for the failure of communist ideology to unify the population and mobilize political support, the CCP has relied on economic performance and nationalism as the basis for regime legitimacy; however, each contains risks that may serve to undermine Party leaders’ efforts to sustain political control. For example, while China’s leaders have stoked nationalist sentiment to manipulate public opinion, deflect domestic criticism, or bolster diplomacy, such as the widespread anti-Japanese demonstrations in 2004 or the anti-U.S. demonstrations in Beijing and other major cities in China following the 1999 mistaken bombing of the PRC Embassy in Belgrade, they are aware that protests can be difficult to control once begun. Similarly, China’s rapid economic growth – vital to the success of China’s leaders – has led to increased economic inequality and dislocation, official corruption, and environmental degradation.

More on how environmental impacts potentially limit economic development, security, and a number of other important national interests:

Environment - A 2007 World Bank report prepared in consultation with Chinese environmental authorities offered the following conclusions:

• The combined health and non-health cost of outdoor air and water pollution on China’s economy comes to around $100 billion a year (or about 5.8 percent of China’s GDP).
• Air pollution, especially in large cities, is leading higher incidences of lung diseases, including cancer, respiratory system problems, and therefore higher levels of work and school absenteeism.
• Water pollution is also causing growing levels of cancer and disease particularly in children under the age of five. It is also exacerbating China’s water scarcity problems, bringing the overall cost of water scarcity to about one percent of GDP.

China’s leaders are concerned that these environmental problems could undermine the CCP by threatening China’s economic development, public health, social stability, and international image. In the spring of 2006, China’s top environmental official, Zhou Shengxian, announced that there had been 51,000 pollution-related protests in 2005 (almost 1,000 per week). Pollution and deforestation in China have worldwide implications. China may have overtaken the United States as the world’s largest emitter of atmospheric carbon dioxide. Japan and South Korea both suffer from acid rain produced by China’s coal-fired power plants and yellow dust storms that originate in the Gobi desert. The PRC’s public actions, such as arrests of public officials and new environmental controls, indicate a greater awareness, but China’s leaders’ ability to manage environmental degradation as a long-term political, if not strategic problem, remains uncertain.

The 2.9mb version (.pdf) of the report is linked here.