Growth policies that trigger Green Economy – III (China)

   China: Ambitious targets for the Greener world

(This article continues in the 4 part series of Policies for Green economy in USA, Japan, China, India by Rangika, Nathan, Gan and Pankaj at Anaheim Green MBA program. This post looks into the Chinese economy and the steps it has taken in that direction)

China has become the second largest economy in the world, with major trading power and the private sector companies playing a major role in its economy.

 The world economic growth and energy demand is concentrated in developing countries, especially the BRIC to which China belongs to. These markets continue to face the challenges of promoting economic growth and mitigating the environmental impact of their growing techniques.

Many economists today speculate that China could become the world’s largest economy in the near future. However, this will depend on whether the government is able to continue and deepen its economic reforms. After the reform during the late 1980s and 1990s, the private sector grew remarkably, accounting for as much as 70% of China’s GDP by 2005. However, China still faces several challenges such as pollution and growing income inequality that threaten social stability, which would be the hurdle for China’s further rapid economic growth.

China’s economy is expected to grow by 50% to 49.3 trillion Yuan over the next five years, with its working population also expected to peak around 2015 to 2017. One of the biggest government policies is to shift from a focus on the quantity of growth to the quality of growth, further improvising on its green transition, which will be critical if they are to move towards its 40% to 45% carbon-intensity reduction target by 2020.

China’s first attempt at the Green GDP program launched in 2003 got cancelled by the central government in 2007. However, the Five Year Plan released in March 2011 has seen some policies addressingChina’s environmental issues, with a number of sections promoting ‘green development’ and environmental conservation by creating new markets using market mechanisms including emissions trading or a carbon tax. China’s new strategy focuses greatly on seven particular industries:

  • Alternative energy
  • Biotechnology
  • New-generation information technology
  • High-end equipment manufacturing,
  • Advanced materials
  • Alternative-fuel cars
  • Energy saving and environmental protection

 The government policy hopes to provide the right policy framework and substantial amounts of investment in certain industries over the next five years, in order to increase the capacity as well as their competitiveness in the green sector by a significant percentage. The government is planning on investing over 5 trillion Yuan in the energy sector, over 3 trillion Yuan in environmental protection and over 100 billion Yuan in the alternative-fuel cars industry over the next ten years. China’s ambition is to increase its share in the global clean technology and energy markets while solving the country’s pollution problems.

China is a tale of 2 cities – one of the fast growth in the dirty coal sectpr and the other in the above mentioned green sector. Both of these cities will be moving at a rapid pace to meet the challenges China faces in the coming decades.

(Above image: Chna Daily at


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