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

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

COP21 Breaking News_10 December:#ParisAgreement: Points that remain in suspense

MEPs want to ensure sufficient funding for Connecting Europe’s future

This Netherlands football stadium creates its own energy and stores it in electric car batteries

“Be aware where you put your I Agree signature on and something else”; now Facebook by default opts you in an unseen private data bazar

Commuters in these cities spend more than 8 days a year stuck in traffic

Energy Union: EU’s effort towards a cleaner climate with integrated energy market

Here are 3 alternative visions for the future of work

Is the European Banking Union an impossible task?

Scotland and First Minister Salmond enter the most challenging battlefield for independence: Europe

This heroic doctor is waging war on rape and the stigma around it

“I believe that startups are for grown-up men, those, who have already achieved something “

Trump and Brexit: After the social whys the political whereto

Central African Republic: UN chief hails signing of new peace agreement

Main results of G20 summit in Buenos Aires, Argentina

In Gaza, UN envoy urges Israel, Palestinian factions to step back from brink of a war that ‘everybody will lose’

‘Stop and listen’ to victims of terrorism, UN chief urges in message marking international day

He died so I could live: UN peacekeeper pays tribute to fallen colleague

Costa Coffee products (Copyright: Costa Coffee; Source: Costa Coffee website, Press area)

The start of the “Caffeine rush”: Coca-Cola acquires Costa Coffee days after Nestlé-Starbucks deal

A call for a new crop of innovators

“At the Environment Assembly citizens expect clean, not hot air”, the Head of UN Environment in Europe underscores in a Sting Exclusive

European Business Summit 2013: Where Business and Politics shape the future

It’s time for cybersecurity to go pro bono

“America first” policy goes against EU-US partnership, say MEPs

Why Eurozone urgently needs the ECB to print and distribute at least €500 billion

Online platforms required by law to be more transparent with EU businesses

Norway is known for its cold weather – but it’s been in the grip of a severe heatwave

3 ways activists are being targeted by cyberattacks

New state aid rules: Commission increases national support to farmers up to €25,000

The hidden cost of the electric car boom – child labour

Climate Change : An Already Health Emergency

VW emissions scandal: EU unable to protect its consumers against large multinationals

Libya: Attack on foreign ministry, an attack on all Libyans, stresses UN envoy

The Banking Union divides deeply the European Union

Why medicine is relevant to the battle against climate change

How Europe beat the financial crisis – and the risks it still faces

New European frontiers for renewable energy development

UNICEF delivers medical supplies to Gaza in wake of deadly protests

The world’s e-waste is a huge problem. It’s also a golden opportunity

Predatory labour taxation not an issue for the Commission

Security Council renews mandates of UN force monitoring separation area between Israel and Syria; AU-UN hybrid mission in Darfur

New identity cards deliver recognition and protection for Rohingya refugees in Bangladesh

Draghi sees inflationary bubbles

Violent disorder is on the rise. Is inequality to blame?

Multilateralism: The only path to address the world’s troubles, signals Guterres

Bundesbank’s President Weidmann criticises France and the EU. Credibility at risk?

EU unfolds strategy on the Egypt question

GSMA outlines new developments for Mobile World Congress Shanghai 2018

The Fourth Industrial Revolution is driving Globalization 4.0

EU to scrutinise foreign direct investment more closely

Employers’ organizations work towards improving the enabling environment for sustainable enterprises

Africa-Europe Alliance: first projects kicked off just three months after launch

Reinforcing EU border security: Visa-exempt travelers will be pre-screened

Sub10 Systems @ MWC14: Bridging the Ethernet of the Future

ECB: The bastion of effective and equitable Europeanism keeps up quantitative easing

Our present and future tax payments usurped by banks

UN welcomes Angola’s repeal of anti-gay law, and ban on discrimination based on sexual orientation

China is a renewable energy champion. But it’s time for a new approach

Who will win the AI race? If countries work together, then the answer could be all of us

Eurozone: Avoiding a new Greek accident

The Ultimate Career Choice: General Practice Specialist

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