The Chinese government must come to grips with the key factors that enable sustainable use of resources

Technological innovation can spin more sustainable use of resources in a number of ways that address various links in the entire process. The first relates to the sphere of production, since technological innovations raise productivity. The second relates to the circular economy, since technological innovation spurs circular use of resources and reduces the damage done by pollutants. The third relates to the distribution of products. The Internet of Things is improving the efficiency of logistics and reducing waste. The fourth relates to the sphere of using products, since technological innovation promotes sharing as well as more efficient use. The fifth relates to the discovery of new resources and the discovery of substitution technologies. It allows resources to be used that were originally hard to access, such as shale gas. The sixth relates to breakthroughs in fields of applications and induced innovations, leading to the development of best applications technologies and best environmental practices.

China’s ‘new form of urbanization’ is another key factor that enables the sustainable use of resources by providing a better spatial configuration in which sustainability can be realized. Urbanization has a two-way impact on resource use: on one hand, it increases demand for resources by spiming economic growth and improvements in the standard of living; on the other hand, cities are a way to use resources more intensively. Concentrating resource factors in cities creates economies of scale as well as of scope, and it fosters dynamic innovations that can greatly improve the efficiency with which resources are used. The essence of development is to enable members of society to lead a good life. Carried out properly, in its ‘new form,’ urbanization can improve the efficient use of resources while at the same time improving people’s standard of living and quality of life. China has by now already entered into the mid- to late period of urbanizing the country. It is therefore quite urgent that the country promote the strategy of ‘a new form of urbanization’ that is centered on people and that is characterized by urban clusters. This not only allows people to enjoy the benefits of concentrated resource factors but also avoids various ‘sick-city syndromes.’

The ultimate aim of possessing and using resources is to improve quality of life, which is not in conflict with the whole idea of sustainable use of resources.

Improving quality of life and the sustainable use of resources are not contradictory. This report believes that the sustainable use of resources can be achieved by considering both factors: production methods and living methods. At the end of the day, improving quality of life relies on improving the functions that goods and services provide - quality of life is not simply a matter of increasing material inputs. There is a great deal of elasticity in the materials that can produce the same functions in different ways, for example, the functions of convenient travel, ample living space, sufficient nutrition, and so on. New Zealand and Canada both have a human development index of 0.913, yet in New Zealand, the per capita demand for resources is just half of what it is in Canada. This report therefore proposes that China’s new strategy for resource use should take direct aim at improving quality of life and that it not focus simply on increasing the quantity of material outputs.

Improving the efficiency with which resources are used requires effective resource governance. This concept includes governance at the macro level as well as governance in temis of specific resources and the environment. At the macro level, reform of the institutional structures that govern China’s socialist market economy has already improved the efficiency with which China uses resources. Since the start of Reform and Opening Up, in overall terms the governance of China’s resources and environment has been in sync with the reform of the country’s socialist market-economy institutional structures. In overall terms, progressive decentralization has enabled the evolution of systems that develop and use resources. In general, China’s resource management policy has been aimed at releasing (decontrolling) authority in the direction of individuals and households, markets, corporations that are owed by a diversity of ownership structures, and local governments. In this process, however, an enormous amount of resources have been wasted. The negative externalities have included the overexploitation of resources and the destruction of ecological environments. At the more micro level, in terms of specific governance of resources and the environment, the government has gradually increased its understanding of negative externalities and the cost to social fairness. It is strengthening control measures and has formed what by now is a pluralistic governance structure. The current forms of resource and environmental governance are in line with the inherent demands of modern governance and reflect the modernization of governance capabilities. However, in practice, serious problems remain. In many cases, authority has not been sufficiently decentralized, and the public carmot participate to the necessary degree. Policy decisions and the performance appraisal system are not transparent. Communications are not well coordinated and so on.

By participating in global resource allocation, China has made positive contributions not only to itself but also to global resource sustainability. Many challenges lie ahead, however. As the largest developing country in the world and the largest industrial nation and trading nation, China, through its use of resources, has a massive influence on the sustainable use of resources worldwide. Given the weighting of China in the global economy, improving the efficiency with which China uses resources will have a direct effect on driving efficient resource use around the world. China participates in the division of labor of the global value chain - it exports well-made but inexpensive ‘Made in China’ products, and this, too, has improved the efficiency of resource use on a global basis. In addition, as a late-to-develop developing nation, China’s explorations in the field of sustainable use of resources are highly significant for other developing nations. It will not be smooth sailing as China participates in global resource allocation - the wind will not always be in China’s direction, and the country will face many misunderstandings and conflicts of interest. What this means is that China needs to improve how it handles this process.

As a participant in global resource governance systems, and one that is increasingly important, China is a member of the community that is shouldering the responsibility for the shared fate of humankind. The world is just now in the process of moving from ‘modernization for the minority’ to ‘modernization for the majority.’ This poses enormous challenges to global resource governance. China itself is striding quickly in the direction of modernization, but it is only one of other major developing countries that are doing so - India and other nations are also modernizing. ‘Modernization for the majority’ will profoundly and acutely change the patterns by which global resources are developed and used. The patterns that were suited to ‘modernization for the minority’ are going to face the need to adjust. However, despite the xising influence of developing countries, these countries all lack experience in global governance. They also lack actual strength and the ability to use it, which may cause global resource governance to experience greater uncertainties in the future. Since the founding of New China, and particularly since the start of Reform and Opening Up, China has participated actively in global governance systems. It has entered into a number of key international conventions to do with resources and the environment, and it has promoted and tried to put into practice the international development agenda in a number of ways, including the ‘Agenda for the 21st Century’ (Agenda 21) and the United Nations Millennium Development Goals. In recent years, China has been even more active in fulfilling its obligations as a member of the community that is shouldering the responsibility for the shared fate of humankind. It has contributed to advancing the 2030 Agenda for Sustainable Development, the Paris accord on climate change, and the G20 mechanism. It has initiated the establishment of the Asian Basic-infrastructure Investment Bank, and the ‘One Belt One Road’ initiative, among other new governance platforms. It has played an active role in providing public goods for the global allocation of resources. As a major developing country that takes its responsibilities seriously, China believes that these measures will be helpful in promoting a more equitable and rational order for global resource governance.

4 Policy recommendations for advancing the goal of sustainable use of resources

This report believes that China needs a new strategy for the sustainable use of resources. The basic components of this new strategy can be expressed as follows. The guiding orientation of the strategy is to use sustainability to improve people’s standard of living and quality of life. Its main thrust focuses on improving the efficiency with which resources are used, with an emphasis on controlling the total quantity of resource inputs and the total quantity of pollution emissions into the environment. Its emphasis is placed on further developing science and technology, on improving China’s institutional structures and mechanisms, and on aiming for ‘modernization for the majority.’

In order to achieve this strategy, this report makes the following six recommendations.

4.1 The Chinese government should firmly establish the strategic position of ‘the sustainable use of resources’ in China’s overall policy framework and set specific control targets toward achieving that end

China’s modernization policy includes an overall arrangement that combines ‘five aspects in one approach.’ That is, it seeks to coordinate and advance the building up of the economy, the political system, the cultural system, the social system, and an ecologically oriented civilization. We recommend that China use ‘the sustainable use of resources’ as the strategic stalling point in building up an ecologically oriented civilization. This involves top-down formulation and coordination of a comprehensive strategy for using and exploiting resources and organizing the actual implementation of that strategy. As fast as possible, it means pushing forward the establishment of spatial patterns (zoning) that conserve resources and protect the environment and industrial structures, production methods, and living methods that conserve resources and protect the environment. We therefore recommend that the government establish a ‘Central Steering Committee for Building an Ecologically Oriented Civilization.’ We recommend formulating 2030 control targets that define the ‘two total amounts,’ namely, resource inputs and pollution emissions. In formulating management goals for the total amount of primary resource inputs by 2030, the aim is to strive for a peak quantity by about 2030, after which inputs should start to decline from that historic high. We recommend formulating management goals for the total amount of all kinds of emissions. The aim here is to reach peak values of all emissions, including greenhouse gases, by 2030, and start a decline at least by that year.

4.2 The Chinese government should improve the mechanisms, standards, regulatory supervision, and governance systems that relate to the sustainable use of resources

This recommendation requires accelerating the building of market mechanisms with respect to resources, thereby improving resource allocation efficiency. It involves stepping up efforts to improve the property rights system that applies to natural resource assets, ensuring that resources are used in return for compensation, expanding market access, and breaking through and eradicating all forms of administrative monopoly, including monopolies granted by administrative bodies to preferred enterprises at the expense of others. This requires constant improvement of standards that relate to resources and the environment, in order to improve resource efficiency and protect the environment. It requires strengthening market- access regulations so that they incorporate such things as energy conservation, the conservation of land and water, environmental standards, technical standards, and security standards. We should ensure that key areas are in alignment with international standar ds. We recommend speeding up the revisions of all standards (regulations) that relate to such things as energy consumption, water consumption, land consumption, pollutant emissions, product quality, and environmental quality. We should strive to become a global leader in standardization in the fields of energy efficiency and pollutant discharges. Local jurisdictions should be urged to formulate stricter local standards as per laws3 and should set vrp certification systems for energy efficiency and environmental indicators that are not only in line with international systems but also appropriate to China’s national circumstances. We must improve the effectiveness of governmental regulatory supervision and strengthen environmental regulatory supervision - as fast as possible, we should build a modem regulatory system that pertains to the environment. In the near term, we emphasize that the government carries out regulatory management in compliance with laws, which thereby guarantees regulatory supervision that is open, equitable, and impartial. In that regard, we must improve on the comprehensive system of environmental and resource governance and actively promote open disclosure of information about resources and the environment. That includes improving two-way comrmmication mechanisms, strengthening the title of law itr environmental governance, and improving the results-based performance evaluation system. We must improve mechanisms that ensure accountability with regard to resources and the environment.

4.3 China should build up green industries and a green economy by adopting a full-life-cycle approach to resources

This recommendation aims at raising the total productive output of resources, that is, resources used per unit of GDP, as well as the comprehensive efficiency with which resources ar e used. It emphasizes such things as mining ores in an integrated way, using the multifunctionality of resources, and actively developing and promoting multigeneration power supply technologies so as to improve the economic value and efficiency of outputs and reduce environmental pollution. Second, this recommendation seeks to improve how basic infrastructure and resource-intensive products are used and to increase their levels of maintenance. It aims to turn around the kind of thinking that focuses on building new infr astructure and new buildings and does not put enough attention on preserving what already exists, in order to extend the usable lifetime of buildings and basic infrastructure. Third, we recommend making information on how to use atrd maintain resource-intensive consumer durables as widespread as possible by using modem media. This relates particularly to home appliances and automobiles, and it involves improving systems that allow for maintenance and preservation. Fourth, we recommend upgrading China’s industrial structure at a faster pace by shifting it in the direction of green industries and putting major effort into remanufacturing. We recommend developing the ‘circular economy’ by putting greater effort into top-level design of industries that retrieve and recycle renewable resources. We should improve the institutional and regulatory frameworks that apply to the retrieval and reuse of renewable resources and increase the scale of the industry and the standardization of its operations. In doing this, we should make foil use of the role of market mechanisms, increase investment in research and development (R&D), and ensure that more research is transformed into applications.

4.4 The Chinese government should promote technological and business model innovations in the sphere of natural resources

Government should increase its investment into cutting-edge technological innovations, particularly with respect to basic theoretical research on new materials, bioengineering, unconventional sources of energy, new-energy-powered vehicles, and artificial intelligence. We recommend supporting the efforts of corporations to optimize their overall systems design and to use innovative business models. We should implement green industrial policies in order to further gr een development. We should employ methods that both support and guide corporations so that they use innovative green technologies, renovate their production processes, and improve management skills. This requires in-depth coordination and cooperation among government, enterprises, and research institutes in the field of resources and the environment, and it requires focusing on the coordination between industrial policies and environmental policies.

4.5 From a unified planning perspective, the Chinese government should coordinate urban and rural development and the domestic and global approaches to resource governance

This recommendation requires carrying out top-down coordinated planning of the zoning of urban and rural development such that it complies with the harmonious coexistence of humans and nature. It regards urban clusters as the main form by which urbanization should take place in the future so that resource factors can have a better ‘division of labor’ between urban and rural areas and among cities, that is, become more concentrated where necessary' and thereby put to more efficient use. With urban clusters as the master plan, we recommend formulating better standards (regulations) that can lead to green cities, smart cities, and livable cities and carrying out sustainably oriented urban plarming so as to create a better spatial configuration for sustainable use of resources. Given the ongoing trend of population mobility, we recommend improving levels of public service in cities, particularly in large and medium-sized cities, thereby encouraging the population that is transitioning out of fanning to become settled urban dwellers in order to use urban resource factors more intensively. We recommend deepening reforms that define different ownership rights to rural land, namely, land under rural housing, land used for commercial purposes by collectives, and land that is contracted for agricultural piuposes, in order to reduce the amount of wasted and idle land. We recommend pushing forward structural reforms on the supply side of agriculture and expanding programs that withdraw vulnerable ecosystems from farming or grazing and return them to forests and grasslands while at the same time creating jobs in the public sector that relate to environmental protection. We should participate vigorously in global resource and environmental governance and expand international channels by which resources are allocated. We should fulfill China’s commitments to the 2030 United Nations Sustainable Development Goals and actively support in-depth dialogue and cooperation with multilateral and bilateral governance bodies. We should improve pluralistic governance models and be proactive in launching collaboration on global resource governance with corporations and nongovernmental organizations. Given the particular nature of China’s resource endowments and given its comparative advantages, we should expand the importation of resources as needed. This involves setting up and improving markets within China that trade in bulk commodities and futures. It means making frill use of the role of industry associations and improving China’s ability to influence price formation. It includes improving the security and capacity of China’s key trade routes. We should vigorously push forward the liberalization and facilitation of trade and investment, expand international trade cooperation with major countries, and oppose protectionism. We should advocate for and help build the concept of a shared community, by which we mean that we recognize that humankind’s fate is held in common. We should make full use of newly emerging platforms and mechanisms in that regard, including the G20, the SCO (Shanghai Cooperation Organisation), and the Brazil, Russia, India, and China (BRIC) mechanism, as well as the One Belt One Road initiative. This includes promoting trade and economic cooperation on a regional and bilateral basis. It also includes expanding international charnels for resource allocation and furthering the ultimate aim of shared development among all countries.

4.6 The Chinese government should broadly promote green concepts and sharing models that are in accordance with an ecologically oriented civilization

This recommendation involves making full use of new media to create a social atmosphere that respects the ecological environment. It involves orienting public opinion in the direction of rational and progressive ideas, strengthening information about China’s national resources and environmental situation, raising public consciousness about resource conservation and environmental protection, and generally ensuring that all people, at all times and in all ways, are aware of the need to create an ‘ecologically oriented civilization.’As we broaden awareness of green-consumption ideas, we should advocate for a new outlook on living that promotes green consumption. We should encourage the formation of new business models and formats that incorporate shared use of resources, including new modes of travel and shared living. Given advances in Internet and mobile information technologies, we should aim to improve the efficiency of transport systems that use shared vehicles and housing that uses shared facilities so as to reduce tailpipe emissions and reduce the consumption of resources and energy required by construction.


  • 1 This term is expanded on in the report and refers to a paradigm shift in how China looks at development.
  • 2 Comprehensive governance is a specific term that is defined in the report.
  • 3 The term, local in this context, refers to provincial-level jurisdictions, that is, not counties or smaller jurisdictions.

1 Resource use in China

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