10/01/2018
Over the past few decades, the People's Republic of China (China) has arguably experienced the largest economic expansion of any country in history, and this has been largely as a result of its efforts to launch and develop Special Economic Zones.
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| A special economic zone in Guangzhou City, China |
When China introduced the ground-breaking ‘Reform and Open-Door’ policy in 1979, SEZs were devised as the main tool to materialize the new experimental strategy. Initially set up in four coastal cities, SEZs quickly proved their success in attracting foreign investments and stimulating trade and industrial development. National and sub-national level SEZs and SEZ variants mushroomed across the country following the success of the initial models, and they eventually became the locomotive of the rapid economic advancement which brought China to its current economic prominence.
Rapid industrialization, however, has had devastating effects on the environment and on public health, particularly in most industrialized cities in China. This created high pressure on the Chinese government to take more substantial measures to promote more innovative and green economic development. Increasing competition for resources and weakened price competitiveness of Chinese products in the international market also pressed industries to adopt more sustainable means of production.
The Chinese government implemented a series of programs to stimulate green transition of industries and the entire economic value chain. The first, the Eco Industrial Park (EIP) demonstration program, started in 2003, aimed to promote transformation of conventional industrial zones into a resource efficient and clean model or construction of new industrial zones based on industrial symbiosis and clean production principles.
The Circular Economy Demonstration Industrial Parks (CEDIP), launched in 2005, was based on the same principles as the EIP program, including promotion of Reduce, Reuse and Recycle (3R) and emission reductions. However, it aimed to approach the Circular Economy within the broader context of promoting sustainable urban development around SEZs. China’s adoption of Circular Economy as one of main themes in China’s 11th Five Year Plan (FYP), China’s mid-term development strategy for 2006 - 2010, further bolstered support for the CEDIP program. In 2012, the CEDIP program was replaced with the Circular Transformation of Industrial Parks (CTIP) program to support the 12th FYP and China’s global climate change commitments, placing a strong emphasis not only on sustainable industrial zone development but also on the promotion of clean and high added-value industries such as new energy, clean vehicles, and information technology.
In parallel with CTIP, in 2013 the government launched the Low-Carbon Industrial Park (LCIP) demonstration program to operationalize China’s new constitutional goal of ‘ecological civilization’. The program stressed carbon monitoring and accounting and relevant infrastructure development in the context of promoting low carbon industrial zones.
Primarily thanks to strong national-level promotion by the central government, all of these programs have been deemed successes. The theme of Circular Economy and green industrial transition regularly appeared in the FYPs, providing a clear, high-visibility signal of the central government’s support for these policies. These consistent messages facilitated uptake of the programs in the private sector, as well as voluntary participation by local governments. In addition, successful implementers and participants in all of the three programs received official certifications. Increasing participation in the programs created added incentives, as the growing number of SEZs generated greater competition among the SEZs to attract investment. Overall, an estimated 13% of 1,568 national and provincial-level SEZs now belong to one of the three programs, and 33 SEZs were participating in at least 2 programs as of 2013. The collective benefits of these SEZs were substantial, such as reduced toxic discharges, reduced greenhouse gas (GHG) emissions, and job creation.
Another success factor of China’s green SEZ programs has been the central government’s efforts to simultaneously build up appropriate policies and relevant market mechanisms, instead of focusing only on direct financial subsidies and tax benefits. The Chinese government began a project to mainstream environmental records as a principal criterion in accessing financial services and products, and has also concentrated its efforts in nurturing the Clean Development Mechanism under the United Nations Framework Convention on Climate Change. The government’s effort to promote clear monitoring and evaluation standards and indicators also helped program participants understand and follow program requirements, and enabled the central government effectively review progress and determine how best to award subsidies or certification.
There have been some challenges in China’s SEZ programs. Overlapping mandates between the three green SEZ programs and the lack of clear coordination mechanisms among participating ministries represent a few of these challenges. Additionally, local government capacity for managing GHG emission monitoring and accounting also needs to improve to more effectively integrate green industry programs with China’s national climate change goals.
Huy Hoàng
(Global Green Growth Institute source)
