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Cao Mingdi: Time to go green and drive economic growth


By Cao Mingdi    Source: China Daily    Published: 2016-4-1

The 13th Five-Year Plan (2016-20) has for the first time made "green" development, along with innovation, openness and sharing, part of China`s growth philosophy, making it a new driver of economic development.

China`s rapid economic growth has brought with it serious environmental problems, so future development faces severe restrictions on resources. This means the economy will need to focus more on green development.

In 2011, during the 12th Five-Year Plan (2011-15), energy consumption per 10,000 yuan ($1,545; 1,364 euros) of GDP decreased 2 percent on the previous year, while last year it fell by 5.6 percent compared with 2014. Increasing energy efficiency in the new plan will not only solve ecological and environmental problems but also create room for economic development and make green industries the new pillar industries.

China should speed up the transformation of traditional industries. At present, industrial development has slowed and enterprises` profits are decreasing, so we should focus on saving energy and reducing emissions to strengthen the green transformation of enterprises that create pollution and use a lot of energy and water, especially in low-end industries with overcapacity such as steel, cement, flat glass, electrolytic aluminum and coal.

Second is to strengthen sustainable and low-carbon development, reduce the material consumption per unit of output, and strengthen standards to control the volume of energy and water consumption and land use. Sustainable production also needs to be promoted among all enterprises to improve the nonfossil energy ratio and make the use of fossil fuels such as coal more efficient, while construction of a smart grid must be strengthened to improve the industrialization of electrical cars and to control carbon emissions.

Time to go green and drive economic growth

Third is to actively promote the energy-saving and environmental protection industry, making it a new growth point. It is one of seven strategic emerging industries that China will accelerate, providing not only equipment, products and services for green development, but also a long industry chain that can offer large employment opportunities.

Green consumption, which refers to the behavior of saving resources and protecting the environment, such as advocating thrift, reducing waste, and choosing environmental products and services, had a clear effect during the 12th Five-Year Plan. Last year, China`s energy consumption equaled 4.3 billion metric tons of standard coal, up 19.2 percent on 2010, although average growth in the past five years has been 3.6 percent.

Coal consumption, seen as a major source of pollution, fell for the first time last year, decreasing 3.7 percent compared to 2014. Moreover, the proportion of clean-energy consumption - hydropower, wind power, nuclear power, and natural gas - in total energy consumption has increased steadily, from 13 percent in 2011 to 17.9 percent last year.

We should promote green products, such as energy-efficient electromotors, eco-friendly cars and efficient lighting products; encourage people to buy water-saving products for taps, toilets and washing machines; and do more to promote new-energy vehicles and the construction of charging facilities for their users.

China should also enlarge the green consumption market. To speed up the building of circulation channels for green products, we need to encourage the establishment of green markets, shopping malls and supermarkets, and ask stores to set aside areas for green products, as well as expand the consumption markets for green products in rural areas.

We should also increase the supply of green products and services and support more companies to invest in the research, design and manufacture of green products, as well as use the Internet Plus strategy to promote green consumption, encouraging e-commerce enterprises to sell directly or cooperate with offline companies to engage in green consumption.

China became the biggest exporter in the world in 2010, but in the past few years it has been common to see countries, especially the developed ones, use environmental protection to set green trade barriers on Chinese products.

Exports are still an important driver of economic growth for China. Developing green trade and pushing forward the export of products that can meet higher environmental protection standards will increase the competitiveness of Chinese products.

China should verify whether exports meet international standards. It should strengthen environment protection regulations for exporting companies, to make sure they abide by the law, and perfect China`s environmental standards and technical regulations to integrate international standards.

The country should also optimize the foreign trade structure and increase its proportion of green products. It could adjust the structure of the export tax refund rate, increase the refund rate for exported green products, and simplify its approval and tax refund processes. We could also put more emphasis on increasing the financial support for green-product exports, and increase the credit insurance scale for green products, especially the financing of exports of complete sets of technical equipment that evidently have environmental benefits such as high-speed rail.

The author is a research fellow at the Chongyang Institute for Financial Studies, Renmin University of China.

Key Words: green growth   China   innovation  

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