Three ways China can make the New Silk Road sustainable

Jinping UN News 2018

UN Photo/Loey Felipe President Xi Jinping of the People’s Republic of China addresses the general debate of the General Assembly’s seventieth session.

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Shouqing Zhu, Research fellow, Center for Finance and Development of Tsinghua National Institute of Financial Research & Sha Song, Specialist, Knowledge Networks and Sustainable Development, World Economic Forum Beijing.

The emergence of China as an economic and political power in the past decade has made waves in the ocean of geo-economics and geopolitics, especially with the country’s “Belt and Road Initiative” (BRI), a recent ambitious infrastructure project along the ancient land and maritime Silk Road routes. Through the BRI, China aims to strengthen connections between Asia, Europe and Africa, and promote cross-border trade, economic integration and inclusive growth.

While the BRI is generally viewed as an opportunity to address the infrastructure gap and boost economic growth, it is not without controversy. China is the largest emitter of greenhouse gases in the world, responsible for 30% of global carbon emissions. It has an abundance of surplus industrial capacity, much of which is heavily polluting. Meanwhile, some Chinese financial institutions and corporations made mistakes in other countries and their handling of environmental issues has attracted criticism from the international community.

On the flipside, China has also been a leader in renewable energy investment, accounting for 36%, 40% and 36% of the world’s total investment in hydro, wind and solar respectively. It also plans to invest $360 billion more into renewables from 2017-2020. China is making leaps and bounds in technological innovation, spending $408.8 billion on research and development in 2015, surpassing the European Union and catching up with the US.

China has played a positive role in the fight against climate change since the US withdrew from the Paris Agreement, and its corporations are increasingly taking the lead in renewable energy development overseas, investing $32 billion – more than any other country. One example of the country’s foreign direct investment activity is the 244 megawatts’ worth of wind farms that the China Energy Investment Corporation is building in South Africa.

With trillions of dollars projected for infrastructure investment in the BRI and China going all out to integrate its huge market with those countries, it is fair to ask how we can make this an opportunity for green transformation in the region.

Facing international pressure and critique, the Chinese government is fully aware of the imperative of “greening” the BRI, highlighted by the release of two government directives in May 2017: The Belt and Road Ecological and Environmental Cooperation Plan and Guidance on Promoting Green Belt and Road.

China has also taken measures to implement these directives. One is the International Coalition for Green Development on the Belt and Road, a multi-stakeholder platform convened by the ministry of ecology and the environment. This platform is open to multilateral organizations, government departments, corporations and think tanks from around the world, and has a mission to share good practices and provide policy solutions to sustainable development.

Another initiative is the Green Investment Principles for the Belt and Road, a set of voluntary guidelines currently under development by a consortium of international organizations led by the Green Finance Committee of the China Society for Finance and Banking.

To ensure that environmental friendliness, climate resilience and social inclusiveness are built into the new investment projects and daily business operations in the Belt and Road region, we need to make the following happen:

  • Firstly, China must take mandatory measures to enhance social responsibility in Chinese corporations. In the past decade, various Chinese government departments and industry associations issued guidelines for responsible overseas investment. But all these guidelines are of a voluntary nature and, therefore, compliance is poor. It is time to give them teeth. At a business level, corporations must embed sustainability into corporate strategy and organizational culture, set up robust sustainability management systems, integrate ESG (environment, social and governance) into operations and investment decisions, and institute information-sharing and conflict-resolution mechanisms to maintain good communication with stakeholders and resolve disputes with employees and communities in a timely manner.
  • Secondly, “greening” investment and business operations in the Belt and Road will only happen through joint efforts from investors and recipients. Host countries must, therefore, create a conducive and stable environment for green investment. This requires countries along the Belt and Road to “green” their fiscal, regulatory and financial systems, including making fiscal and taxation policy friendly to green business, addressing information asymmetry by regulatory measures, utilizing green financial instruments such as green bonds and green indices, and encouraging accounting for the entire lifecycle in the supply chain.
  • Thirdly, underlining all of the above is the ability to design systems and develop instruments in government departments, financial institutions and corporations. This is an area where collective action is needed. Multilateral organizations, especially the UN system, need to set up – or support others to set up – platforms for stakeholders to share knowledge and experience. A good example of this type of capacity-building platform is the Global Green Finance Leadership Programme, championed by the Centre for Finance and Development of Tsinghua University in collaboration with the IFC-supported Sustainable Banking Network (SBN) and China Council for International Cooperation on Environment and Development (CCICED). At its launch event in May 2018, more than 120 government regulators and financial executives from 35 countries in the Belt and Road participated in a week of knowledge-sharing workshops in China.

If we do well with the above, we believe the BRI will be a win-win solution for development and that China could make a contribution to the green transition to sustainability in the countries along the ancient Silk Road.

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Factory workers are facing a mental health crisis. Here’s how to respond

EU: 13 major banks may pay fines 10% of worldwide turnover

Mother of all mergers between Facebook Messenger, WhatsApp and Instagram: EU Data Privacy restrictions against Facebook’s imperialistic plans

5 facts to know about Africa’s powerhouse – Nigeria

Long live Eurozone’s bank supervisor down with the EU budget supremo

Job automation risks vary widely across different regions within countries

World response to AIDS epidemic at a ‘critical juncture’

5 things you probably didn’t know about global health

Three-quarters of South Sudanese children have known nothing but war, says UNICEF

Top UN court rules it has jurisdiction to hear Iranian claim against US over frozen assets

Taxation: Commission refers Spain to the Court for imposing disproportionate sanctions for failure to report assets held abroad

Can the EU really make Google and Facebook pay publishers and media?

Millions at risk if Syria’s war moves to last redoubt of Idlib, warns senior aid official

4 ways the US can take the lead in the fight against human trafficking

Is Britain to sail alone in the high seas of trade wars?

Cryptocurrency mining could become the new face of energy storage. Here’s how

Britain aligns with EU rivaling US on trade and Iran, abandons bilateral ‘Midsummer Night’s Dream’

EU and Overseas Countries and Territories boost cooperation at annual Forum with €44 million

Mood changes in Europe in favour of growth and jobs

US-North Korea summit ‘an important milestone’ towards denuclearization, says Guterres

As a rising global power, what is India’s vision for the world?

This company grows crops inside, stacked on top of one another

Brands can be a force for good and for growth. Here’s how

Draghi joined Macron in telling Germany how Eurozone must be reformed

Marginalized groups hit hardest by inequality and stigma in cities

Northern Bahamas ravaged by ‘disaster of epic proportions’ as UN releases $1 million in emergency funds

Polluted lungs: health in the center of environment discussion

A Sting Exclusive: “Infrastructure can lay the groundwork for the Sustainable Development Goals” by Mr Fulai Sheng, UN Environment Senior Economist

Do the EU policies on agro-food smell?

Space science now a ‘fundamental pillar’ of 21st century human development: top UN space official

Guterres lauds UN peacekeeping, highlights need to bridge ‘critical’ gaps

Hollande decisively rebuffs Merkel’s and Rehn’s austerity policies

Vendor Pulse – 2000

Electronic cigarette – is it really a safer alternative to smoking?

Berlin Calling: DCX Expo on track to grow, in association with The European Sting

The battle for the 2016 EU Budget to shake the Union; Commission and Parliament vs. Germany

EU and India re-open talks over strategic partnership while prepare for a Free Trade Agreement

How the finance industry can save the world

EU shapes its ambitious strategy on India

MEPs wants to increase research funding to €120 billion in 2021-2027

Is the EU competent enough to fight human smuggling in 2015?

UN rights expert calls for civilian protection as fighting escalates between military and armed group

Energy of African youth ‘propelling’ new development era as UN ties bear fruit

Trump denies climate change existence while Paris Agreement is not fully supported by G20 ahead of COP24

A Sting Exclusive: “Digital iron curtain makes no sense in 5G era”, by China’s Ambassador to EU Mr. Zhang Ming

How much more political is the new EU leadership? Does this include personal bend?

Gender is where the feminist and LGBTI movements meet. Here’s why

EU to present a “hefty” exit bill to the UK moments before Brexit negotiations

5 facts about global military spending

UN working with both sides, after hidden tunnels confirmed along Lebanon-Israel ‘Blue Line’

EU Trust Fund for Africa: Can it be beneficial for Italy and tackle the migration crisis in the Mediterranean?

Parliament makes it easier to organise a European Citizens’ Initiative

The vicious cycle of poverty and exclusion spreads fast engulfing more children

Health Committee MEPs back plans to boost joint assessment of medicines

Don’t dismiss start-ups founded by millennials. This is how they succeed

New Report Offers Global Outlook on Efforts to Beat Plastic Pollution

Victims of terrorism remembered

Monday’s Daily Brief: numbers of hungry people rising, millions of children need vaccines, Mali children need more protection

‘Starvation’ now a reality for displaced Syrians stranded in camp near Jordanian border

Trump questions US – Europe kinship, approaches Russia

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s