China in transition towards a circular economy: from policy to practice

Publication Date15 Sep 2020
AuthorYuhong Zhao
SubjectProperty management & built environment,Building & construction,Building & construction law,Real estate & property,Property law
China in transition towards a
circular economy: from policy
to practice
Yuhong Zhao
Faculty of Law, The Chinese University of Hong Kong, Hong Kong
Purpose The purpose of this paper is to examine Chinas approach to circular economy (CE) and
investigate how the foreign concept of CE has been turned into a national strategy for implementation in
production, circulation and consumption. This study aims to highlight the Chinese characteristics in the
implementation of CE from central to local levels including the trial and testby pilot schemes andthe
role of local governments in CE transformation of industrial parks and in building CE cities. Based on
what has been achieved, this paper aims to identify the gaps to be lled in the next stage of CE
Design/methodology/approach This paper engages in critical analysis of statepolicies, plans, laws
and regulations and case studies of Suzhou New District and Shanghai city in the building CE-oriented
industrialpark and CE city, respectively.
Findings China has taken a top-downapproach to CE characterised by strong government involvementin
both policy and planmaking and implementation at local levels. The governmentsnancial investment and
administrative assistance proved to be crucial in the early stage of CE implementation to closethe loop at
industrial parks and in cities. In comparison, participation by enterprises and individuals is still weak and
limited,which should be the focus of the next stage of CE implementation.
Originality/value There is an absence of legal literature that studies circular economyin China. This
paper lls the gapby examining the development of CE law and policyas well as CE implementation at local
levels from industrialparks to cities.
Keywords Circular economy, Resource conservation, CE pilot schemes, Waste reduction,
Industrial parks, Reduce reuse recycle
Paper type Research paper
1. Introduction
As a closed-loop system, the circular economy (CE) promotes the restructuring of industrial
processes so that one manufacturers waste output becomes the material input for another (Pearce
and Turner, 1990). It thus provides a sustainable alternative to the traditiona l linear economy in
which resources are extracted, transformed into products, consumed and then disposed as waste.
This linear take-make-dispose approach generates wastes, causing pollution and environmental
degradation. CE instead reduces resource consumption through reuse, recycling and recovery of
products at their would-be end-of-life and thereby abates pollution discharge and waste disposal.
Because of these perceived benets, China formally adopted the concept of CE into state policy in
This article is based on a paper presented at the Conferen ce on Rethinking Property Approaches in
Resources for the Circular Economy hosted by Coventry University in June 2019. The author is most
grateful to Dr Katrien Steenmans for inviting him to participate in the conference and for her assistance
and support in editing the paper for publication. He also appreciate all the comments and questions of the
conference participants and anonymous referees that have helped him in writing this article.
China in
towards a circular
Received2 March 2020
Revised16 June 2020
27June 2020
Accepted28 June 2020
Journalof Property, Planning and
Vol.12 No. 3, 2020
pp. 187-202
© Emerald Publishing Limited
DOI 10.1108/JPPEL-03-2020-0014
The current issue and full text archive of this journal is available on Emerald Insight at:
2005 to address the tension between its accelerating industrialisation and the constraints of
natural resources and environmental carrying capacity (State Council, 2005).In 2008, the Circular
Economy Promotion Law [1] (CEPL) was promulgated to demonstrate str ong political
commitment to CE and provide the statutory foundation for the development and
implementation of policy measures and market-oriented instruments.
Following intensive industrialisation and fast economic growth in the 1980s and 1990s,
China faced unprecedented pressure of rapid depletion of natural resources and serious
environmental degradation. The concept of a CE was therefore appealing to the Chinese
government, as it promotes resource conservation and environmental protection by reducing,
reusing and recycling resources and wastes from production to consumption, instead of Chinas
previously existing development model characterised by energy-, resource- and pollution-
intensive and low resource efciency industrial operations compared to international
standards. For example, its consumption of steel, copper, aluminium, lead and zinc per unit of
gross domestic product (GDP) was fourve times the world average (Xie et al., 2009). The
combination of high resource consumption and lo w resource efciency resulted in signicant
waste generation and serious pollution discharge; during the mid-1990s, the annual economic
cost of air and water pollution was estimated at USD2454bn, approximately 3.5%7.7% of
Chinas GDP depending on different methods of calculation: human capital and willingness to
pay. The human capital approach values mortality and morbidity impacts as lost productivity
and out-of-pocket expenditures, whereas the willingness-to-pay approach measures the value of
human life and health in the market (i.e. the amount people are willing to pay to reduce the risk
of injury or death) (Johnson et al., 1997). By 2003, the total cost of pollution was ¥362bn or
2.68% of GDP by human capital approach, and the cost went up to ¥781bn or 5.78% of GDP
by willing to pay approach (World Bank and State Environmental Protection Administration,
2007). The ofcial conservative estimate of the cost of environmental degradation reached
¥511.8bn in 2004, accounting for 3.05% of its GDP (State Environmental Protection
Administration and State Bureau of Statistics, 2006)[
2]. The Chinese Central Government
acknowledged the urgent need to change its resource and pollution intensive growth path at
the start of the 21st century by formally endorsing CE in 2005 to build a resource-saving and
environmental-friendly society (State Council, 2005). CE, as dened in the CEPL, generally
covers activities that reduce, reuse and recycle materials in production, distribution and
consumption processes.
This paper reviews and analyses the Chinese Government-led top-down approachto CE
over the past 15 years from law and policy making by the central government to
implementation and practice at local levels. For this purpose, Section 2 discusses the socio-
economic context in which China embraced CE and turned it from a concept into a national
development strategy by promulgating CE policies, plans and legislation. Section 3
examines the implementation of CE law and policies through pilot projects supported by
local governments. Section4 criticises the delayed implementation of the extended producer
responsibility (EPR) scheme. Section 5 emphasises the urgency to extend CE from
production to consumptionand to implement CE in the wider society.
2. Top-down approach to circular economy: policies, plans and law
Chinas economic growth, evidenced by an average annual GDP growth in excess of 10%
between 19811995 and 20012010, has been achieved predominantly as a result of
economic activities by resource-intensive and pollution-intensive heavy industries (Qi et al.,
2016). The following sections explore how adopted CE policies, plans and law aim to offer
China a path for long-term sustainable development by alleviating the increasing tension
between shortage of resourcesand Chinas ongoing industrialisation andurbanisation.

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