Sustainable China?

w w w . t r e n d b u e r o . c o m >> 1

SUSTAINABLE CHINA?

SAM Forum, 27.01.2009 Dirk Jehmlich, General Manager Asia-Pacific

w w w . t r e n d b u e r o . c o m >>

THE WORLD IS URBANIZING. CHINA FASTEST.

2 Sustainable China?


IN 2025 CHINA WILL HAVE 221 CITIES WITH A POPULATION OF MORE THAN 1 MILLION. EUROPE HAS 35 TODAY.


McK

, 20

08


800 MILLION CHINESE WILL LIVE IN CITIES BY 2020. 930 MILLION BEFORE 2030.


UN,

200

4


700 MILLION OF THEM WILL HAVE WESTERN SPENDING CAPACITY BY 2015?


Germ

an C

ente

r fo

r In

dust

ry a

nd T

rade

, Sh

angh

ai,

2007


THEY WANT TO MOVE OUT FROM THEIR PARENTS INTO BIGGER APARTMENTS, WORK IN OFFICES AND DRIVE THEIR OWN CARS.



MEANS…



40 BILLION SQM OF FLOOR SPACE WILL BE BUILT IN 5 MILLION BUILDINGS UNTIL 2025.


McK

, 20

08


50,000 OF THESE BUILDINGS COULD BE SKYSCRAPERS = 10 NEW YORK CITIES


McK

, 20

08


THIS MEANS 1 NEW BEIJING EVERY YEAR FOR 35 YEARS. 35 X BEIJING = 2 X THE TOTAL BUILT VOLUME OF CHINA.



5 BILLION SQM STREETS WILL BE PAVED UNTIL 2025 = A TWO LANE ROAD 40 X AROUND THE WORLD.


McK

, 20

08


TO HOST 140 MILLION CARS ON THE ROADS BY 2020.


Chin

a Da

ily,

2004


BUT STILL, SHANGHAI’S TRAFFIC WILL EXCEED ITS ROAD CAPACITY THREE TIMES.


Chin

a Da

ily,

2008


EVEN THOUGH 64% OF PEOPLE RANK THE CURRENT TRAFFIC SITUATION AS ‘BAD’ OR ‘VERY BAD’, 75% EXPECT TO OWN A CAR IN 2020.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


41% OF THOSE WHO NOW TRAVEL BY NON-CAR METHODS HOPE SOON TO BE DRIVING. THOSE PRESENTLY IN CARS INSIST THEY WILL KEEP ON USING THEM.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


BY 2050 CHINA WILL HAVE ALMOST AS MANY CARS AS THE ENTIRE WORLD HAS TODAY.


Econ

omis

t, 2

008


TWO MILLION MORE CARS ARE EXPECTED TO TAKE TO BEIJING'S ROADS BY 2012.


Chin

a Da

ily,

2008


THEY WILL NEED ANOTHER 60 SQ KM OF PARKING SPACE = THE TOTAL AREA WITHIN THE 2ND RING ROAD AND AT LEAST 1.3 BILLION LITERS OF GAS EACH YEAR.


Chin

a Da

ily,

2008


IT WILL BE DENSE. 17,150 PEOPLE PER SQKM IN SHENZHEN; 13,400 IN SHANGHAI; 11,500 IN BEIJING.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


URBAN EXPANSION IS CONCENTRATED IN A MINORITY OF CHINA.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08

w w w . t r e n d b u e r o . c o m >> 21 Sustainable China?

Dyna

mic

Cit

y Fo

unda

tion

, 20

08


SEPARATE IT FROM CHINA AND YOU GET:

PEOPLE’S URBANITY OF CHINA


PUC AREA IS ONLY 1/3 OF THE USA AND YET PUC’S POPULATION IN 2020 WILL BE MORE THAN 1.5 TIMES OF (EUROPE + USA).


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


96% OF… CHINA’S POPULATION, CHINA’S GDP, CHINA’S ARABLE LAND.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


THE EMERGENCE OF A SINGLE MEGALOPOLIS OF OVER 470 MILLION INHABITANTS.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


INHABITANTS = CONSUMERS


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


CONSUMERS CAUSE CONSUMPTION.



CONSUMPTION CONSUMES RESOURCES.



BUT WE ARE LIVING IN AN AGE OF RESOURCE SCARCITY.



CHINA OFFERS GREAT OPPORTUNITIES FOR ALL INDUSTRIES. BUT THESE OPPORTUNITIES ARE TIED TO SERIOUS CHALLENGES.



AGRICULTURAL GROUND AFFECTED BY ACID RAIN NOW ACCOUNTS FOR 40% OF CHINA’S TOTAL USABLE LAND.


Chin

a St

ate

Envi

ronm

enta

l Pro

tect

ion

Adm

inis

trat

ion,

200

7


HEAVY METAL-TAINTED FOODS AMOUNT TO 12 MILLION TONS PER ANNUM, WITH ECONOMIC DAMAGE AMOUNTING TO 20 BILLION YUAN.


Sam

sung

Eco

nom

ic R

esea

rch

Inst

itut

e, B

eijin

g Of

fice,

200

8


POLLUTION HAS MADE CANCER THE NATION’S NO. 1 KILLER. LUNG CANCER CASES GREW UP 18.6% IN 2006 FROM 2005.


Sam

sung

Eco

nom

ic R

esea

rch

Inst

itut

e, B

eijin

g Of

fice,

200

8


ECONOMIC DAMAGES FROM AIR AND WATER POLLUTION TOTALED 781 BILLION YUAN IN 2007.


Wor

ld B

ank,

200

7


SOCIAL COST OF POLLUTION NOW AMOUNTS TO 8-13% OF GDP.


Pan

Yue,

Vic

e Ch

airm

an o

f th

e CN

EMC,

200

6


STILL…



CHINESE CONSUMERS WILL DOUBLE THEIR FOOD CONSUMPTION UNTIL 2020. CHINA WILL ACCOUNT FOR 1/3 OF WORLD MEAT CONSUMPTION.


http

://w

ww.

food

navi

gato

r.com


48% WANT TO COMMUTE BY CAR.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


63% WANT TO OWN A CAR.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


75% DREAM OF HAVING A GARDEN.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


79% A SPACIOUS HOME.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


AND 90% WANT TO LIVE IN A SUSTAINABLE ENVIRONMENT.


Dyna

mic

Cit

y Fo

unda

tion

, 20

08


BUT…



You can’t have both the fish’s

tail and the bear’s paw

– or, you can’t have your cake and eat it too.


THIS IS WHERE SUSTAINABILITY COMES INTO THE GAME.



–Sustainability in China is crucial for national security.

sustainability = peace

–Environmental pollution consumes a serious share of economic growth

sustainability = profit

–Resource scarcity and wastage of resources risk global competiveness

sustainability = growth

–High-speed urbanization sustainability = future

–Politics: China will be in transition from centralized China to a United States of China.

–Economics: Sustainability will be key to sustain economic growth and increase living standards.

–Society: China will be dominated by a urban middle class.

–Technology: China will be a global powerhouse for R&D and production and a lab for new technical and social innovations.

–Consumption: Shift from Made in China to Made for China.

–Resources: Massive demand for raw materials, energy, skills and food outpace supply

–What if you built the whole mass of Western Europe in 20 years and 400 million urbanites then move in?

–What are impacts on brands, products and services?

–What are emerging challenges and opportunities for you?

–What does it mean for Europe if R&D, production and consumption all shift to Asia?

–What are quick wins of sustainable behaviour for each stakeholder?

–How can planet earth deal with a billion new middle class consumers (long-term achievements)?

Key Questions Sustainability 2019 Drivers

w w w . t r e n d b u e r o . c o m >> 49 Social Mobility in China

–Economic growth: GDP will fourfold until 2020; EUR 74 billion investment for housing & infrastructure

–Urbanization: 400 mio new urbanites by 2020

–Migration: 96% of China’s GDP is consumed in east China

–Weak social security: 300 to 600 billion USD by 2020 (best case USD 400 per capita)

–Growing income: 700 mio. consumers with western spending capacity in 2015

–Environment: 130 mio. hectares of of northern China’s arable land is shrinking; EUR 39 billion investment for ecological and environmental projects

–Individualization: 79% of young Chinese assume to live without parents by 2020

Consumption Pattern

–Qualities: efficiency, identity, design, authenticity, quality, comfort, convenience

–Behaviours: access, value for money, diversification

Migration

–Global: Talent Tango – learn in the West, earn in the East

–National: from west to east; rollover migration

–Climate: soil erosion, deforestation and desertification will force millions to move

–Barriers: barrier-free migration for educated workforce only

–How will consumption patterns be affected by shifts of wealth?

–What is the impact of immigration on market demand?

–How will increased global distribution of talent change the corporate landscape?

–Will we have climate migrants?

–Will walls be built up or will migration flow more freely?

–What are corresponding investment opportunities?

Key Questions Sustainability 2019 Drivers

w w w . t r e n d b u e r o . c o m >> 50 Contact

Thank you! Hamburg | Beijing

Dirk Jehmlich General Manager Asia-Pacific

Trendbüro 研究中心 #2108 Xintai Building | 8 Xiaguangli | Chaoyang District | 100016 Beijing | China Email: [email protected] | http://www.trendbuero.com

Business

Sustainable China?