27 Feb 2018
China's Green Shift: Is Your Business Ready?
Reconciling economic development with environmental protection is the struggle of our times. Growth and sustainability have proven, in most cases, to be inversely related. And few countries epitomise the “growth versus green” dilemma as well as China, where three decades of extraordinary growth have caused environmental degradation of epic proportions.
As a result, anti-pollution is now one of the “three key battles” China has pledged to fight over the next three years, together with financial risk and poverty. Since 2017, the central government has taken unprecedented action against environmentally non-compliant businesses and government officials, displaying enough political muscle to prove its point: China’s green push is here to stay.
Does this mean China is willing to accept slower GDP growth for the sake of healthier, more sustainable development? Or will it be able to push through its environmental agenda without hampering progress?
How the “green versus growth” dilemma plays out at a country level is yet to be seen. But for international businesses operating in China, there is only one option: to make sure their growth projections remain on-track as they struggle to meet China’s tougher environmental requirements.
Achieving this will not be easy - especially in the short term. On the sourcing side, companies must prepare for order delays and rising costs as a result of upstream factory closures. On the production front, they will need to invest in monitoring and minimising their environmental impact. And on the sales side, companies who transfer the cost burden of environmental compliance to clients can expect to lose out to competitors who meet those requirements more cost-efficiently.
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