Climate Change

Clean goal

China is now at the forefront of global efforts to address climate change and achieve the aim of a greener world

cover P1 clean

July 17-23, 2017
 in Sydney

When the United States decided to pull out of the Paris Agreement on climate change, it propelled China to the forefront of the global climate debate.

“China has a clear opportunity for global leadership on climate policy,” said Frank Jotzo, professor at the Crawford School of Public Policy at the Australian National University in Canberra.

“China can partner with the large emerging economies like India and Brazil and work closely with the EU,” he told China Daily Asia Weekly.

“Taking a climate leadership role could give China a significantly enhanced role in global cooperation and economic affairs. To be successful, it would require continued strengthening of China’s domestic efforts to move to a low-carbon economy. The economics, social and environmental benefits of this shift to China are clear.”

China has been aggressive in its push for renewable power sources such as wind and solar, but that will not mean an early end to coal or oil as energy sources.

“Even if China is leading the world in renewable-energy generation, it is not enough for their energy needs,” said Alvaro Ruiz-Navajas, a portfolio manager and the sector specialist for energy and materials with BNP Paribas Asset Management in Hong Kong.

He said wind and solar made up around 5 percent of China’s total energy mix in 2016 and this is expected to increase to about 14 percent by 2025.

“Coal will reduce its share of the energy mix, from around 63 percent to 47 percent, with gas, hydro and nuclear making up the difference,” Ruiz-Navajas said.

“So, it is important to bear in mind that while renewables have become increasingly important for China, coal will continue as the backbone of their energy mix for the foreseeable future.”

Despite the US decision, China remains firmly committed to the fight against climate change and international efforts for a greener world.

According to data from Berlin-based Climate Analytics, China has overtaken the US as the world’s biggest emitter of greenhouse gas (carbon dioxide) — at 20.09 percent, compared to the US on 17.89 percent and the EU’s 13.34 percent.

At the World Economic Forum’s meeting in Dalian, in Northeast China’s Liaoning province, on June 27, Wan Gang, minister of science and technology, said China will prioritize green development and focus on clean technology.

Investment in innovation is a crucial factor in driving growth, he said, while emphasizing the need for flexible policymaking.

“Technology innovation goes hand-in-hand with innovation in the institutional support arrangements,” Wan said.

At the same time he acknowledged the challenges ahead, and noted: “Over the past two decades, development has boosted our economy, but it has brought about some negative impacts as well, like air pollution.”

Bob Carr, the former Australian foreign minister and director of the Australia-China Relations Institute at the University of Technology Sydney, believes China is well on its way to solving its pollution problems.

“I think you will start to see real changes in the air and water quality within a generation,” he told China Daily Asia Weekly.

A worker retrieves a float at the world’s largest floating solar power plant in a lake in Huainan, East China’s Anhui province, on June 7. The floating solar farm, which can generate 40 megawatts of electricity, was connected to the city’s power grid in May. Credit: AFP

Zhou Xizhou, senior director and head of power, gas, coal and renewables for Asia Pacific at IHS Markit, a global information and analysis group, said: “In China, climate change is not an issue anymore. Everyone accepts the science. The issue now is how to solve the problem.

“There are two issues here,” Zhou said. “One is the smog that engulfs many of China’s big cities. You can see it and taste it. That is an air-quality issue and one that can be sorted at its source.

“The other is climate change, which cannot be solved by one country acting alone because it is an issue that needs a global solution.”

China already leads the world on solar power and wind turbines. It has more hydropower, nuclear power and coal-fired power stations than any country on Earth.

“The push, however, is more to renewables,” Zhou said.

“Ten years ago, 80 percent of China’s power generation was coal. Today it is around a third, but the difference is that these new power stations use ‘clean coal technology’.

“This technology has been around for a long time and has mainly been used in Europe and the US,” he said.

“These power stations use less coal than the older generation coal-fired power stations and generate more electricity.”

The problem with clean coal technology is that it cannot get rid of the carbon problem altogether, Zhou said.

China has set targets to improve the environment in its current five-year economic development plan.

Some of the areas China has targeted for reduced emissions include coal-burning industries; boosting the use of cleaner and the more efficient use of coal; promoting electricity and natural gas in place of coal; and support for wind, solar and bio power.

Premier Li Keqiang, during an official visit to Germany early last month, said China will continue to work steadfastly to implement the commitment of the Paris climate deal and join hands with all parties to tackle climate change.

In a joint press conference on June 1 with his German counterpart Angela Merkel, Li said China should shoulder its international responsibilities and address the challenge of climate change with other countries.

“Combating climate change is a global consensus,” China Daily quoted Li as saying. “With tremendous efforts, China will move toward the 2030 goal step-by-step steadfastly.”

China is still a developing country but it will not step back when it comes to tackling climate change, according to Zhao Ming, associate professor at Tsinghua University’s School of Environment.

“Collaboration and dialogue are the only ways to solve the global environmental problems,” Zhao told China Daily Asia Weekly.

“China has proposed very ambitious plans to reduce emissions, with its energy carbon emissions projected to peak in 2030 and non-fossil fuels in the primary energy mix to reach approximately 20 percent in the same year.

“These goals will not change with the withdrawal of the United States (from the Paris Agreement on climate change), because these are not only in accord with China’s own interests but also with the interests of the world.

“By reducing emissions, China can reduce its reliance on fossil energy, improve energy-utilization efficiency, minimize pollution and improve the ecological environment.”

At the same time, he said, “developing renewable energy and developing a carbon market as well as carbon finance can also promote employment and improve our economic structure”.

“This is the responsibility and commitment of a big country, and it also reflects the foresight and sagacity of its strategy,” said Zhao, who specializes in low-carbon technology and management.

The Paris Agreement on climate change was agreed to by 197 countries in December 2015. The accord commits world leaders to keep global warming below 2 C. The agreement’s long-term goal is for net zero emissions.

“China is undergoing an energy transformation,” Shu Yinbiao, chairman of China’s State Grid Corporation, told the World Economic Forum in Dalian. He said traditional fossil fuels should be replaced by clean energy.

State Grid is a Fortune 500 company and one of China’s biggest employers. For seven days, from June 17 to 23, it powered Qinghai province in Northwest China entirely from renewable energy.

China aspires to shift its traditional energy mix, so that renewable energy accounts for 50 percent or more of the grid. Beijing closed its last coal-fired power plant in March, and will invest in electric vehicles to combat environmental pollution and create healthier cities. The Beijing-Tianjin-Hebei region will not need coal for its heating by the end of the year, according to forecasts.

“It’s a world consensus to realize the transition to clean energy,” said Shu. “It’s an urgent task for China to help build such a world.”

China is creating a new world order in clean tech, according to Alex Molinaroli, chairman and CEO of Johnson Controls, a global diversified technology group.

Technology breakthroughs in areas such as energy storage and energy efficiency are key, and policies should be in place to make every step of recycling profitable, he told the World Economic Forum.

“Sticking to the Paris Agreement is good for growth” in China, said Ruiz-Navajas at BNP Paribas.

“Addressing environmental issues is a way to stabilize growth — and, at the same time, addressing one of the main concerns of their society.”

Additional reporting by Xu Weiwei.

Coal burns bright but gets cleaner Fossil fuel likely to remain Southeast Asia’s dominant energy source for another 20 years despite the push for renewables

July 17-23, 2017
By KARL WILSON in Sydney

Like it or not, coal is going to remain a major component of Southeast Asia’s energy mix for the foreseeable future despite the rise of renewables.

Since the Paris Agreement on climate change was signed at the end of 2015, governments in the Association of Southeast Asian Nations (ASEAN) have reassessed their energy requirements by increasing the use of renewable energy sources, such as solar and wind.

Even so, coal will stay the dominant source of energy for the 10-nation bloc for at least the next two decades.

A study by the World Coal Association, in collaboration with the ASEAN Centre for Energy, makes this clear.

Released in May, ASEAN’s Energy Equation is the first comprehensive cost-benefit analysis of climate and energy policies that cleaner coal technologies bring to a region looking to coal to fuel its growing economy.

“High-efficiency coal is — and will continue to be — the most affordable option to meet electricity demand growth for many emerging economies, while reducing emissions at the same time,” the report said.

It suggested that increasing investment to encourage the use of lower-emissions coal would reduce cumulative emissions by 1.3 billion tons over the next 20 years.

Energy demand in Southeast Asia has expanded by two and a half times since 1990, its rate of growth among the fastest in the world.

The International Energy Agency, in cooperation with the Economic Research Institute for ASEAN and East Asia (ERIA), in its regional outlook report said electricity demand in Southeast Asia is expected to triple by 2040 with the focus on coal expected to continue.

To meet the increase in demand, 400 gigawatts of power generation capacity — roughly equal to the combined installed capacity of Japan and South Korea today — will be added across the region between now and 2040.

An excavator extracts coal at an open-pit mine in Jambi, south Sumatra in Indonesia, on May 19. High-efficiency coal remains the most affordable option to meet electricity demand for many emerging economies but renewables are expected to play an increasing role. Credit: AFP

“The share of coal in power generation rises from 32 percent to 50 percent, contrary to the trend seen in most other parts of the world, while that of natural gas is expected to fall from 44 percent to 26 percent,” the report said.

“The rise in coal use is underpinned by economic factors, abundant supplies and the need for rapid electrification, but also highlights the need to accelerate the deployment of more efficient technologies to address the rise in local pollution and carbon emissions.”

The report added that renewables such as solar, wind and hydro-based electricity generation are likely to increase by three and a half times by 2040.

Frank Yu, principal consultant for Asia-Pacific power and renewables with energy consultancy Wood Mackenzie, said there is “a clear drive for renewable energy in Southeast Asia, especially when renewable cost has been dropping significantly in recent years”.

“Some countries are still cautious because current renewables tariffs are more expensive than those of alternative fuels. However, this concern has gradually eased,” he said, giving the example of what had been happening in India in recent months. Indian wind and solar power tariffs fell to record lows earlier this year, as the country works to cut electricity shortages in one of the world’s biggest clean energy programs.

“Coal, however, will still be in strong demand in some countries such as Indonesia, Malaysia and Vietnam in the near term,” Yu said.

He said advanced “clean” coal plants can cut the intensity of the main greenhouse gases by up to 10 percent. But this depends on many factors, including power supply efficiency, coal quality and plant utilization.

“These factors will impact on power-generation emission intensity,” he said. “I think the main message coming out of the region is the rise of renewables.”

In a paper on the role of coal in Southeast Asia’s power sector, the Oxford Institute for Energy Studies said governments across the region have started to reassess their power development plans. They are introducing more renewable energy sources, promoting energy efficiency measures, and reducing the contribution of coal in the electricity mix.

“This reassessment, however, does not constitute a shift away from coal,” the report said. “Despite the scale back, coal still dominates the targeted additional capacity, followed by natural gas, hydropower and other renewables.”

The report said that most of the additional coal capacity planned for completion by 2025 is concentrated in two countries — Indonesia and Vietnam. “But in both countries, the targets are challenging,” it said.

Venkatachalam Anbumozhi, senior energy economist with ERIA, said Southeast Asia faces a “set of interconnected yet fundamental energy-transition dilemmas”.

“The region’s rapidly industrializing economies, intensifying levels of urbanization and increasing prosperity of the middle class have created an unprecedented demand for energy and electricity services,” he said in a recent paper.

“Average energy use per capita of the 10 ASEAN (member countries) remains quite low — about 0.61 metric tons of oil equivalent per person, compared with 1.10 for China, 4.67 for Japan and 1.69 for the world.

“However, the use of commercial energy has increased substantially in the last 25 years. The region is endowed with about 8 percent of the fossil fuel resources in the world.”

Anbumozhi said nearly all of the region’s coal reserves are located in Indonesia (83 percent) and Vietnam (10 percent). Natural gas and oil are found in Brunei, Indonesia, Malaysia and Vietnam.

Indonesia and the Philippines have substantial reserves of geothermal energy, ranking them as the second- and fourth-largest producers of energy from geothermal resources.

Hydropower is abundant in Thailand, Indonesia and Vietnam. And all the countries are endowed with biomass — a non-commercial source of fuel developed from organic materials, particularly in rural areas, for cooking and energy.

“The diversity of available energy resources provides opportunity for cooperation throughout the region,” Anbumozhi said.

“Southeast Asian countries face challenges in developing and distributing energy resources, from their remote locations to those urban centers of production and consumption where they are needed most.”

Anbumozhi noted that the challenges of energy resource development, distribution and energy poverty are rivaled by the difficulties of improving energy security and reducing carbon emissions.

“As of 2015, this region has at least 134 million people, or 22 percent of the population, without access to modern electricity. It is home to thousands of low-lying islands comprising major portions of Indonesia and the Philippines that are extremely disadvantaged in terms of energy access.

“Following on from the Paris Agreement in December 2015, and the ratification of Intended Nationally Determined Contributions (targets set by countries to try to stop global temperatures rising above 2 C), the countries in the region are paying more attention to advancing viable and scalable low-carbon energy transformation options,” he said.

Financial sector to help protect ecology In a pioneering move by China, the central government is building a national system to boost green funding

July 17-23, 2017

As China strives to protect its ecological integrity, the financial sector is coming to the aid to contain pollution and help advance the industrial transformation.

Green finance — a concept still unfamiliar to most — entered the economic lexicon in June after the central government decided to set up five pilot zones nationwide.

The State Council, China’s cabinet, arrived at the decision at an executive meeting on June 14, which was presided over by Premier Li Keqiang. Financial institutions will further enhance their shoring-up for environmental protection projects and industrial upgrading with favorable policies on interest payments and loans.

The pilot zones will be set up in East China’s Zhejiang and Jiangxi provinces, Guangdong province in the south, Guizhou in the southwest, and Northwest China’s Xinjiang Uygur autonomous region, according to a statement released after the meeting.

Systematical innovation for green finance will increase the financial sector’s support to improve ecology and boost the efficient utilization of resources. The statement said the pilot zones are also an important way to continue China’s commitment to the Paris climate accord after US President Donald Trump announced in early June that the US would withdraw from the agreement.

The statement said the government will support financial institutions to set up green finance departments and welcome foreign capital to participate in green investments. The development of “green credit” will be encouraged to take the environmental credentials of companies into account.

The country will start pilot markets for trading rights of resources such as water and energy. The central government will provide support in fiscal, tax and land policies for green industries and projects, while a risk-prevention mechanism will be established.

Green finance was first proposed in the Government Work Report delivered by Li in March 2016. The term, reiterated by the premier in this year’s work report, was first officially defined in a guideline co-released by the National Development and Reform Commission and another six ministries last August.

By definition, it means financial services that help increase investment and financing, project operations and risk management in fields such as environmental protection, energy conservation, clean energy, green transport and buildings.

The guideline made China the first country where the central government boosts green finance nationwide by building a national system, Chen Yulu, vice-governor of the People’s Bank of China, the central bank, said during a policy briefing on June 16.

“The necessity to establish such pilot zones cannot be overestimated as the decision was the first concrete measure to implement the guideline,” said Wang Yao, president of the International Institute of Green Finance at the Central University of Finance and Economics.

The pilot zones have already industrialized, or are undergoing industrial upgrading, or are in far-flung and less-developed regions, Wang said. Experience and lessons absorbed from different conditions can easily be adapted to other regions, he added.

“We still lack experience in the new green finance, which demands pilot reforms to find replicable practices in wider regions,” the premier told the State Council meeting.

Chen of the People’s Bank of China said each of the pilot regions had different conditions. Zhejiang and Guangdong have developed economies and financial sectors, but are eager to upgrade their current development models. How to integrate the financial market with industrial upgrading will be a key for the two provinces, he said.

For example, the city of Huzhou in Zhejiang is already one of the country’s five cities which have compiled a “balance sheet” of natural resources. Quzhou city has carried out a pioneering project for green credits, green bonds and industrial funds, Chen said. These advantages will facilitate the establishment of new pilot zones, he added.

In comparison, Guizhou and Jiangxi are less developed economically, but possess rich resources for green industries. The two provinces are set to boost green finance on their way to a less-polluting model for economic growth, which will focus on modern agriculture, rural drainage systems and energy conservation.

Nevertheless, Xinjiang is an important gateway of the Belt and Road Initiative and will lay more emphasis on fields such as clean energy and high-end manufacturing, including solar power equipment, Chen said. The China-led Belt and Road Initiative aims to connect Asia with Africa and Europe through an infrastructure and trade grid, revitalizing the ancient Silk Road routes.

Lu Zhengwei, chief economist at Industrial Bank Co, said each of the five regions has its own conditions while building a green finance system. By carrying out the project, China’s green finance will proceed more easily with lessons learned, he said.

Building a cleaner tomorrow To meet national goals, at least 50 percent of new urban property in China must be eco-friendly by 2020

July 17-23, 2017

Song Yingqian is on a roll. She was desperate to live in an apartment in a new energy-saving building along with thousands of other property hopefuls.

The development was so popular that the new tenants were selected through a lottery process.

Luckily, Song’s name popped out of the computer. Now, she can eventually buy the apartment if she lives there for more than five years.

“I was so fortunate,” said the 32-year-old accountant, who works in Beijing.

Indeed she is, because her two-bedroom apartment, like all the others in the bloc, has the latest green technologies.

“Solar water heaters are in every apartment,” Song said. “It will save me 450 yuan ($66.2) on my electricity bills annually.

“The building also has energy-efficient elevators and hallway lights in public areas,” she added.

Gardens also surround the development in the northwest Haidian district of Beijing, with the tower blocks designed to maximize “sunlight and rainwater for irrigation”.

Buildings such as the one Song will move into are the future in a city that suffers from congestion and pollution.

Data is sparse on the construction of green residential property. But, overall, the construction industry in China is expected to exceed $1 trillion by 2020, with an annual growth rate of 4.7 percent.

“The proportion of green residential developments will also continue to increase during the same period,” BMI Research stated, although again figures are scarce.

China has the largest construction sector in the world and is redoubling its efforts to create cleaner, smarter and safer buildings.

Green property tends to be environmentally friendly and energy efficient. This also includes the building materials and design.

In the 13th Five-Year Plan (2016-20), China set out goals for green building construction and renovation. By 2020, at least 50 percent of new urban buildings have to be certified as “green”.

To help jump-start this transformation, leading engineers and scientists in China, together with overseas experts, are working closely on building technologies and solutions.

A scale model of an energy-saving building is shown at an innovation exhibition in Beijing. Credit: Da Wei / For China Daily

Among the list of priorities is energy and water reduction as well as carbon emissions from building sites.

In March, China’s Center of Science and Technology and Industrialization Development (CSTID), under the Ministry of Housing and Urban-Rural Development, improved the labeling system for green buildings in the country.

The Green Building Evaluation Label, or Three-Star Rating System, evaluates projects based on six categories, including land, energy, water and material efficiency.

The rating system was built around software developed by International Financial Corp, a member of the World Bank Group. It also encourages the use of geothermal, hydropower, wind and biomass energy over traditional fossil-fuel options such as coal.

“The initiative will create an international platform to enable continuous improvements of China’s green-building labeling system,” said Song Ling, vice-director of the Green Building Development Department at CSTID.

Construction companies are also putting together partnerships to promote sustainable and green building practices. In June, Volvo Construction Equipment, an international heavy-equipment manufacturer, and the China International Contractor Association signed a memorandum of understanding to increase cooperation in sustainable infrastructure construction.

“China is the biggest single market in the world,” said Francis Sum, president of China with Volvo Construction Equipment.

“It is also one of Volvo CE’s four key market areas, and we have taken a systematic approach to investment here,” Sum added.

Longer range driving to a green future Companies are developing new energy vehicles with improved mileage in response to demand

July 17-23, 2017

New energy cars are opening up a greener future for motorists in China.

In the first five months of this year, 136,000 fuel-efficient vehicles, such as plug-in hybrids and battery cell cars, were sold in the country, a jump of 7.8 percent, according to the China Association of Automobile Manufacturers or CAAM.

Sales could reach 700,000 units by the end of this year, a report by Ping An Securities, a financial company, stated. Up to 500,000 of these vehicles could be passenger cars, while the figures could increase further in 2018.

“Although the overall car market is cooling down compared to last year, new energy car sales have been robust,” said Xu Haidong, a senior official at CAAM.

This trend appears to be backed up by a survey from Nielsen China, a major research company. A poll of 2,307 potential car buyers showed that 27 percent favored purchasing purely electric cars, while 25 percent were interested in plug-in hybrids.

The rising popularity has had a great deal to do with the latest mileage figures from new energy vehicles.

In 2016, a single charge equated to 164 kilometers. Now, the latest models have a distance of 252 km.

A joint report by KPMG China and consulting firm Automotive Foresight confirmed there were also other reasons for the jump in demand for green cars.

A visitor looks at a new energy car at the 2017 Shanghai auto show. Credit: Zhang Jingang / For China Daily

Based on a survey of 220 motorists, the research groups found that government subsidies were considered an important factor, especially in major cities with car license plate quotas. Potential buyers also pointed out that lower maintenance costs and environmental protection benefits were also crucial.

Although concerns — such as mileage, charging stations and the length of time it takes — still exist, nearly 50 percent of new energy vehicle owners would purchase a second model.

“Chinese consumers are realistic, and they have very clear expectations about how they see electric vehicles in their daily lives, as well as in wider society,” said Yale Zhang, managing director of Automotive Foresight in Shanghai.

Many of those surveyed felt that mileage from a single charge should be around 350 km.

This is basically in line with Nielsen’s findings and is fueling research and development at traditional carmakers.

Volkswagen is working on electric vehicles that will have a range of 300 km and hopes to double that figure with new technology.

Denza, a joint venture between BYD Auto Co and Daimler, based in Shenzhen in South China, is rolling out models with a range of more than 400 km.

Other auto groups are also investing heavily to increase their market share in this booming sector.

Earlier this year, Chinese and international car companies showcased more than 150 new energy models at the Shanghai International Automobile Industry Exhibition.

“It is a good time for companies when a new sector develops … it is also a tough time as competition is extremely fierce,” said Olive Zhang, vice-president of Nielsen China.

Still, increased mileage is just one item on motorists’ “wish lists”.

Many would like to see autonomous driving features, such as automatic parking, according to the KPMG report.

In addition, about 65 percent of respondents said they would be prepared to use “share electric vehicle” programs, although they would still want to own their own cars.

“Electric cars should meet Chinese customers’ mobility needs, such as offering commuter comfort,” Zhang, of Automotive Foresight, said.

“And they should revolutionize the way that future mobility will shape society.

“They should also be equipped with advanced technology, both autonomous and sharing,” Zhang added.

“Most importantly, they should improve consumers’ lifestyles.”

Appliances turn homes into ‘eco havens’ Chinese manufacturers design environmentally friendly products as consumers seek greater energy efficiency

July 17-23, 2017

Energy-efficient home appliances have become an industry trend as consumers pursue greener lifestyles.

Innovation has triggered research and development into more environmentally friendly air conditioners, refrigerators, washing machines and water heaters, as well as a host of other household products.

“Home appliance manufacturers have had to adjust to this new philosophy,” said Liang Zhenpeng, an independent consumer electronics analyst.

“This means an increase in R&D (research and development) investment in energy-saving, low-carbon emission products.

“Only by doing this can they succeed against fierce competition,” he added.

China’s leading manufacturers such as Haier Group Corp have quickly picked up on this consumer craze.

The multinational electronics and home-appliance giant has launched various energy-saving air conditioners.

Many are equipped with smart sensors which detect body movements and temperature and then adjust the settings automatically.

Haier’s R290 “intelligent air conditioner” uses low-carbon R290 refrigerant fluid, which cuts down on dangerous gases that can destroy the ozone layer.

Already the company’s Maglev air-conditioning system is used in government public buildings, commercial real estate developments, hotels and hospitals.

These units can substantially reduce carbon dioxide emissions and energy costs, data released by Haier showed.

“The technologies used in these air-conditioning units have the potential to significantly reduce energy consumption and improve air quality,” said Liang Haishan, chief executive of Haier.

“We are looking forward to advancing our eco-innovation efforts to an even greater level,” Liang added.

Data from Euromonitor, the global market research company based in London, showed Haier is the No 1 brand for air conditioners in the world with a market share of 23.6 percent in terms of sales last year.

Apart from air conditioners, Haier has also rolled out energy-saving refrigerators, washing machines and water heaters.

The group’s latest refrigerators need 40 percent less electricity, while one of its water-heater designs won an energy-saving award from the Ministry of Industry and Information Technology.

In April, Haier and e-commerce behemoth Alibaba Group Holding linked up to launch a new project to look into a “home appliance green ecosystem”.

By virtue of Haier’s social networking platform, the company will collect data from customers about freezing and storing frozen foods.

It will then design high-tech refrigerators, which will utilize environmentally friendly materials and fluorine-free refrigerant fluid.

Financial figures in the first quarter showed that Haier’s operating income was 37.7 billion yuan ($5.55 billion), an increase of 69.7 percent compared to the same period in 2016. First-quarter net profit increased 51 percent to 1.46 billion yuan.

The National Bureau of Statistics released data that showed domestic home appliance manufacturers reported profits of 119.69 billion yuan last year, a 20.4 percent increase compared to 2015.

Guangdong Midea Group, for example, has been working with upstream suppliers, such as leading steel material manufacturer HBIS Group Chengsteel Co, to promote an array of “greener” products.

“We have sold 12 million sets of ECO series air conditioners, which will save more than 1.2 billion killowatt-hours of power consumption each year,” said Wu Wenxin, president at Midea’s air-conditioning production department.

“This will help reduce the equivalent of 500,000 metric tons of coal, and could reduce carbon emissions by 1.21 million tons,” he added.

Crystal capital shines again Consolidation in Pujiang county’s main industry has reduced pollution and put sparkle back into the local economy

July 17-23, 2017

Zhou Chengle, 62, relaxes outside his whitewashed three-story home in Jinhua, East China’s Zhejiang province, and watches children paddling in the shallows of a sun-drenched Cuihu Lake.

Just four years ago, if he had seen someone swimming in the lake, the local landlord probably would have called for an ambulance.

“Before 2013, Cuihu Lake had all kinds of waste floating on the surface. Bad smells used to come up from the lake,” he recalled.

It was then a sickly shade of milky white, poisoned by tons of untreated waste dumped in by 1,400 crystal glass workshops huddled around its banks.

Cuihu’s transformation from cesspit to picturesque bathing spot was the result of a huge anti-pollution campaign launched by Zhejiang province in 2013, an initiative that has had far-reaching effects on not only the region’s waterways but also its economy and society.

Cuihu and its surrounding area, Pujiang county, was the first place targeted by Zhejiang’s Water Movement.

In Pujiang, 22,000 local companies churned out 85 percent of the world’s hot fix crystal glassware.

The crystal industry had brought huge wealth to the county, with Pujiang’s urban residents’ per capita annual disposable income trebling from 9,542 yuan ($1,400) in 2003 to 30,711 yuan a decade later.

Zhou had benefited from the industry himself, renting out his downstairs flat to be used as a crystal workshop.

But cutthroat competition and lax regulation in the industry had also unleashed devastating pollution.

By 2013, Pujiang was the most polluted county in China, according to the China Global Television Network. More than 500 of its water sources were milk-white like Cuihu, while another 25 had turned black.

The county government had attempted to crack down on polluters in 2006 and 2011, but quickly aborted both campaigns for fear of damaging the industry, which then accounted for over 11 percent of the county’s GDP and provided employment to more than 200,000 people.

With fear spreading that Pujiang’s toxic waterways could create a public health emergency in the county and downstream Hangzhou, home to 9 million people, Zhejiang decided to take radical action to clean up China’s “crystal capital”.

Policymakers in Zhejiang faced a seemingly intractable dilemma as the Water Movement got under way: How could they fix Pujiang’s environmental problems without triggering an economic slump in the county?

It was eventually decided that they would consolidate the entire crystal industry, shutting down Pujiang’s thousands of outdated, difficult-to-regulate workshops and promoting modern, large-scale production.

“The transformation and upgrading of the industrial structure is essential to solving the water problem,” said Huang Hai, deputy director of Pujiang’s environmental protection bureau.

Local children swim and play in Cuihu Lake in Pujiang county, the target of the eastern Zhejiang province’s Water Movement launched in 2013. Credit: Wu Yongjun / For China Daily

The government launched a huge campaign to shut down workshops operating without a business license, enlisting every government department and the public to root out any violators. Often, they inspected workshops at midnight to catch clandestine polluters red-handed.

But, crucially, the government also invested 5.5 billion yuan to build the Pujiang Crystal Business Park, which opened in August 2015.

The region’s remaining crystal companies were given the choice of moving to the new park or investing in their own sewage treatment systems, according to Huang.

More than 21,000 of Pujiang’s crystal companies shut down as a result of these measures. Of the 614 producers that survived the crackdown, 526 are now based in the park.

The Crystal Park has helped Pujiang’s crystal industry remain competitive. Its centralized waste treatment system allows companies to share the costs, while the generous subsidies it provides help boost tenants’ profits further.

Automating production also plays a key role in cost cutting. “I used to employ 100 workers before moving to the Crystal Park, but now I only need 10,” said Luo Yintian, owner of Luoxiao Crystal.

Pujiang’s crystal industry has not only survived the anti-pollution campaign but has grown significantly. Its output value in 2016 was more than 9 billion yuan, up from 6 billion yuan in 2013.

This wealth is also trickling down to the wider economy. Per capita disposable income rose another 20 percent in Pujiang between 2013 and 2016, according to Zhejiang Online.

Workers who lost their jobs have either moved back to their home provinces or been paid compensation, according to the county government, with many using the money to set up agribusinesses that grow grapes and Chinese toon.

Pujiang’s cleaner environment is also helping new businesses sprout up. Xinguang village, which once choked on the fumes of 300 crystal workshops, is now a tourist spot housing trendy bars, cafes and boutiques.

In Cuihu, Zhou has also prospered from the water campaign. His new tenants have converted the old workshop into a restaurant, and pay him 5,000 yuan more a year in rent. He is now retired and spends his evenings strolling around the lake with his granddaughter.

“There are many people walking beside the lake in the evenings these days,” he said with a smile.

Qin Jirong and Feng Chonglin contributed to the story.

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