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A Closer Look at China’s Overseas Investment

When it comes to overseas development finance, China is definitely a country to watch. Due to the country’s unprecedented economic growth, China’s overseas investments have increased exponentially in recent years. Between 2009 and 2010, two Chinese state-owned banks lent more money to other developing nations than the World Bank did. In fact, between 2002 and 2011, China’s outward foreign direct investment (OFDI) stock grew from $29 billion to more than $424 billion.

But what factors are driving all of this growth? What areas of the world are on the receiving end of China’s OFDI flows? And what sorts of social and environmental standards are in place for banks’ and enterprises’ investments? WRI seeks to answer these questions and provide additional background information in its recently updated slide deck, “Emerging Actors in Development Finance: A Closer Look at China’s Overseas Investment.”

The Trillion RMB Question: How Can China Fund its Sustainable Urban Transport Growth?

This piece was co-authored with Daniel Bongardt, Project Director of Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ) China.

China—especially its cities—has embraced sustainable transport in a big way. The Ministry of Housing and Urban-Rural Development recently urged Chinese cities to increase the number of travelers using non-motorized transportation to at least 50 percent by 2015. The country has been undergoing the most rapid expansion of urban rail systems in world history, and it leads Asia in bus-rapid-transit (BRT) and busway implementation. Plus, dozens of cities are expanding non-motorized transport. Hangzhou, for example, has built up the largest public bike program in the world, accumulating 65,000 bicycles in fewer than two years.

But while China leads the developing world in sustainable urban transport expansion, the country faces great challenges when it comes to financing the construction, maintenance, and operation of new and existing public urban transport projects.

The Great Challenge of Funding Sustainable Transport Projects in Chinese Cities

China lacks dedicated funding structures for planned public transit, biking, and walking facilities—at both the national and local levels. The Ministry of Transport provides funding only for inter-city highway projects, acquiring this revenue from gasoline taxes and vehicle registry fees. Local governments, which are often in charge of urban public transport development, currently support metro or BRT construction through per project-based funding, mainly via land leasing and local loans--neither of which is sustainable.

Policy Experts Provide Insights into China’s Leadership Transition

This post was co-authored by Dominique Labaki, an intern with WRI's External Relations department.

Last Friday, experts from the ChinaFAQs Network and top media representatives participated on a press call on climate and energy policy under China’s incoming president, Xi Jinping, and other new leaders. The participants focused on the drivers underlying China’s energy and climate policies and actions. Key issues included whether the country can sustain its renewable energy growth, confront rising coal demand, and follow through on its climate change targets in the 12th five-year plan. All of these issues are emerging as the country faces its first major economic slowdown in more than a decade. This blog post highlights experts’ discussion during the press call.

New Leadership and the 12th Five-Year Plan

Kenneth Lieberthal, Senior Fellow in Foreign Policy and Global Economy and Development at Brookings, opened the discussion. As he explained, nearly 70 percent of China’s top leadership positions are expected to change in November, but the make-up of the Standing Committee of the Politburo remains uncertain. In Lieberthal’s view, China’s new leaders will first focus on domestic challenges, primarily around re-balancing the economy.

What Is the Future of King Coal in China?

This post originally appeared on WRI's ChinaFAQs site.

When it comes to coal consumption, no other nation comes close to China. The country reigns as the world’s largest coal user, burning almost half of the global total each year. About 70 percent of China’s total energy consumption and nearly 80 percent of its electricity production come from coal, and its recent shift from being a historical net coal exporter to the world’s largest net coal importer took only three years.

China’s great thirst for coal is undeniably troubling from a sustainable development standpoint. However, the situation may be changing. I recently joined three other experts to speak at a Congressional briefing entitled, “Why China Is Acting on Clean Energy: Successes, Challenges, and Implications for U.S. Policy.” While my fellow speakers spoke about the progress of clean energy development in China, I sought to explain how the growing constraints on coal development are acting as one factor pushing China to move more aggressively towards clean energy.

Listen to the recording of WRI's press call on "China's Leadership Transition and Implications for Energy and Climate.

Chinese Leaders and WRI Experts Share Knowledge on Low-Carbon Development

China and the United States have a lot in common. China’s rapid economic development and America’s industry have turned the two nations into world’s largest energy users, as well as the biggest emitters of carbon dioxide. So it’s fitting that experts from these two countries share ideas on how to grow their economies in ways that also protect the environment.

That’s exactly what happened this week when WRI hosted a high-level Chinese delegation in Washington, D.C. The event was part of a larger study tour organized by MIT, Shanghai Jiao Tong University, and the Organization Department of the Communist Party of China. More than 20 representatives from Chinese research institutions and central and local government gathered to learn about low-carbon development strategies and policies, with WRI serving as one of the tour’s first stops.

“I spent a great deal of time in China, and I believe very strongly that we have as much or more to learn from you as you have to learn from us,” said WRI’s president, Andrew Steer, to the Chinese delegation.

Building Energy and GHG Reporting Scheme for Enterprises

A Guangdong Strategy Study

"Energy and GHG reporting scheme for enterprises" refers to a series of policies, regulations, and measures of data collection and calculation related to energy consumption and GHG emissions that aim to support government decision-making on energy management and low-carbon development...

Mapping Potential Water Risks in China's Wei River

The Wei River in west-central China is not just the largest tributary of the Yellow River, but it has also been a critical water source for communities for thousands of years. To manage this important resource, water authorities in China just announced that they plan to invest 6 billion yuan - more than US$950 million - this year to fight floods and pollution in the Wei.

This investment in water management comes after flooding on the Wei killed dozens of people and forced tens of thousands from their homes in the fall of 2011. On top of these terrible human costs come severe economic impacts. According to some estimates, the 2011 flooding cost China more than 6 billion U.S. dollars.

Eco-Compensation in China: Opportunities for Payments for Watershed Services

Water supply and availability could be the most pressing problem restricting China’s economic growth in the next 10-15 years, according to a new report by the Asian Development Bank. Not only are water resources limited (only about 30 percent of total water resources are available for use), but many surface and groundwater sources are suffering from severe pollution.[^1] The Chinese government is now looking to invest in new ideas to improve water quality and supply, and WRI is using its water quality trading expertise to explore the potential of market-based methods to improve water quality and increase the supply of clean water from Chao Lake, the fifth-largest lake in China.

For China, Sustainable Urbanization Has Many Benefits

This piece was written with Richard Lavin, President, Caterpillar Group. It originally appeared in China Daily.

China's recent history has been marked by tremendous economic growth and dynamism as it has progressed from a modest farming society to a thriving manufacturing success in less than three decades. As China's economy continues to grow, it must now wrestle with a new emerging challenge: How will it handle the shift from a majority rural population to a majority urban one?

This question represents one of the biggest sustainability challenges of the 21st century.

The statistics speak for themselves. By 2030, at least 220 cities in China will have at least 1 million residents, dwarfing the 35 million-people cities that Europe boasts today. Many of these cities in China will be built from the ground up. Designed the right way, they will serve as a global model for the sustainable, low-carbon city of tomorrow.

But for China to play this world-leading role, it will need to overcome many of the problems that plague fast-growing cities across Asia, Latin America and Africa. In many of these countries, rapidly expanding economies and a booming middle class are increasing pressure on scarce natural resources. Air and water pollution, traffic congestion, poor housing, and overcrowding are just some of the urban environmental and social ills for which cures urgently need to be found.

China's Population Challenge: Designing Sustainable Cities for the Future

This piece originally appeared on Forbes.

Between meetings with President Obama this week, China’s vice president and leader-in-waiting Xi Jinping will make time to visit Iowa farm country. Back at home, cities– not the countryside– will likely dominate Xi’s domestic agenda.

In a momentous shift, more people in China now live in cities and towns than in rural areas. Forty years ago, eight in ten people in the world’s most populous country were peasant farmers, living off the land. Today, 51 percent of its 1.35 billion people live in sprawling cities, with high-rise skylines.

China surpassed this milestone in a fraction of the time it took Western Europe to shift from rural to urban societies. Nor is it alone. A similar exodus is taking place across Africa and Asia, prompting the United Nations Population Fund to estimate that almost 5 billion people worldwide will live in cities and towns by 2030, up from around 3.5 billion in 2010. This transformative shift in human society offers both big challenges and great promise for sustainable development.

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