China's national cleaner production strategy

FEATURES

CHINA’S NATIONAL CLEANERPRODUCTION STRATEGY

Ji WangState Environmental Protection Administration

Since the United Nations Conference on Environment and Development in1992, China has been developing a strategy for cleaner production (CP). Keyelements of the CP strategy include a new policy framework for industrialdevelopment and environmental protection, demonstration projects and casestudies, and CP training and institution building. Successful cooperation be-tween international organizations, national and local government agencies, andlocal industries in China has led to the adoption of CP measures by numerousChinese enterprises and to substantial reductions in pollution. Despite thissuccess, a number of barriers to CP implementation and dissemination continueto exist in China, including knowledge and awareness problems, regulatoryimpediments, financial obstacles, technological hurdles, and organizationalbarriers. 1999 Elsevier Science Inc.

Introduction

Cleaner production (CP) addresses industrial pollution problems by modi-fying industrial operations to reduce the generation of wastes. It requiresa shift in thinking away from end-of-pipe treatment of industrial pollutants.Technologies for CP go beyond pollution abatement and waste disposal;they embrace within-factory changes in management, shop-floor operations,production process operations, equipment, and products.

CP means the continuous application of an integrated preventive environ-mental strategy for processes and products to reduce risks to human healthand the environment (UNEP 1994). In the context of manufacturing, CPinvolves conserving raw materials and energy, eliminating toxic chemicals,and reducing the quantity and toxicity of emissions and wastes generated

Address requests for reprints to: Ji Wang, State Environmental Protection Administration, Solid Wasteand Toxic Chemicals Management Division, No. 115 Xizhimennei Nanxiaojie, Beijing, China 100035.

ENVIRON IMPACT ASSESS REV 1999;19:437–456 1999 Elsevier Science Inc. All rights reserved. 0195-9255/99/$–see front matter655 Avenue of the Americas, New York, NY 10010 PII S0195-9255(99)00022-0

438 JI WANG

during production. For products, the CP strategy focuses on reducing im-pacts along the entire lifecycle of a product, from raw material extractionto ultimate disposal.

As part of recent strategy for attaining sustainable industrial develop-ment, China has made progress with CP demonstration projects, trainingand education in CP auditing, and CP policy studies. China also has engagedin international cooperation to promote CP. Practical experience with CPaudits has been encouraging. In enterprises across the country, the adoptionand implementation of CP methodologies, particularly no- or low-cost mea-sures, has led to cuts in pollutant emissions in audited plants of 20% to50%, and production cost savings of 20% to 50% (NEPA 1997).

Evolution of the CP Strategy in China

China’s rapid economic growth has made the problem of pollution moreprominent and led to mounting pressure for a transition to sustainableindustrial development. Since the United Nations Conference on Environ-ment and Development (UNCED) in 1992, the Chinese government hastaken action to promote sustainable production and consumption. In Octo-ber 1993, the National Environmental Protection Agency (NEPA)—elevated in 1998 to ministerial level and renamed as the State Environmen-tal Protection Administration (SEPA)—and the State Economic and TradeCommission (SETC) convened the Second National Industrial PollutionControl and Prevention Conference. The Conference reviewed the experi-ences, achievements, and lessons learned from efforts to prevent and controlindustrial pollution since 1982. The Conference highlighted CP as a criticalmeasure for harmonizing the environment with economic development,thereby attaining sustainable development. Since the conference, CP hasbeen supported by high-level Chinese leaders involved in economic reformand environmental protection.

On March 25, 1994, China’s 21st Century Agenda (referred to hereafteras Agenda 21) was approved at the 16th Executive Meeting of the StateCouncil (State Planning Commission and State Science and TechnologyCommission 1994). Agenda 21 stresses the need for cleaner production andincludes the following high-level targets:

• Coordinate and plan the economic structure of China’s industries atthe macro-level, with a shift from highly polluting, heavy industries toa more service-oriented, high-tech economy.

• Optimize all stages of industrial production using concepts from indus-trial ecology; for example, create integrated industrial parks wherewaste energy, water, and materials from one company serve as inputsfor others.

• Change China’s pollution control strategy from end-of-pipe treatmentto prevention of pollution via changes throughout the manufacturingprocess.

CHINA’S NATIONAL CLEANER PRODUCTION STRATEGY 439

• Increase use of renewable resources, including renewable energy sources• Reduce waste output per unit value of production.• Improve resource use efficiency and prevent environmental pollution.

Many projects involving CP were listed in the first group of priority projectsto be implemented under Agenda 21.

China’s current industrial production involves high consumption of rawmaterials, energy, and water during production; use of outdated technolo-gies, and facilities; and poor management. The utilization ratio of totalenergy in China is estimated to be as low as 33%, and that of mineralresources is only 40% to 50%. Finished goods consist of only 20% to 30%of the raw materials used as inputs (Xie 1996). Even though water shortagesare critical in China—the country runs short of approximately 50 billioncubic meters of water in a typical year—water consumption per unit ofindustrial production is 5 to 10 times greater than that in developed coun-tries. China’s enormously inefficient use of resources and energy has raisedthe cost of products and become a major source of environmental pollution.

The “National Ninth Five-Year (1996–2000) Plan and Long-Term Targetsfor the Year 2010 for Environmental Protection” (NEPA 1997) calls forChina’s transition to industrial production characterized by efficient re-source use, state-of-the-art technologies, and advanced enterprise manage-ment. With a rapidly growing population and industrial base, and a severescarcity of natural resources, the need for this industrial shift is paramount.The government plans to achieve such a transition by integrating CP intoindustrial development with the following measures: (a) reform of industrialand environmental laws and policies to promote CP; and (b) support ofCP in key industries and enterprises through CP demonstration projects,sector technical guidelines for CP, and large-scale CP education and training.

Policy Framework for CP

China’s efforts to further integrate environmental protection with industrialdevelopment have led authorities to emphasize preventative approachestoward pollution control. The promotion of CP is viewed as an urgent taskin implementing a preventative approach. To promote CP in China, SEPAand other government organizations, in cooperation with internationalagencies such as the World Bank and United Nations Environment Pro-gramme (UNEP), have conducted numerous policy studies. These policystudies had 4 main objectives: (a) review and assess industrial and environ-mental policies and laws in China with an eye toward promoting CP; (b)review the findings of existing case studies on CP implementation in Chineseenterprises; and (c) design (or redesign) Chinese policies, laws, and pro-grams to advance the use of CP (NEPA 1996).

Results of the policy studies suggest that, by and large, existing industrialand environmental policies in China have a predominant focus on end-of-pipe treatment; that is, the emphasis is on requiring enterprises to treat

440 JI WANG

their waste to meet discharge standards and other requirements. In aneffort to redirect this focus away from end-of-pipe treatment toward CP,the following major policy initiatives and actions will be taken at the nationaland local levels in the next decade: (a) CP will be integrated into existingindustrial and environmental laws, policies, and regulations; and (b) enter-prises will be encouraged to use CP as a means of meeting pollution reduc-tion targets in the “National Emission Control Plan for the Year 2000.”

Table 1 summarizes policy actions to be taken in the period between1990 and 2000 to promote the use of CP in China. As Table 1 indicates,the government will establish CP as a primary component of industrialpolicy, and CP will be designated as a key area for national research andtechnology development. China also plans to require industrial ministriesto formulate long-term goals for CP in various sectors, such as the energyand chemicals sectors, and to add specific requirements for CP into existingsector-level regulations and policies.

China’s leaders are now in the process of integrating CP into the legalstructure for environmental protection. In January 1999, the State Eco-nomic and Trade Commission began preparing a draft statute of the “Lawfor Cleaner Production.” The draft is expected to be submitted to theNational People’s Congress for ratification by the year 2002. In the past 3years, China also has drawn up or revised several of its key environmentalprotection statutes, including its Law on Protection and Control of SolidWaste Pollution, Law on Protection and Control of Atmospheric Pollution,and its Law on Protection and Control of Water Pollution (NEPA 1996).All three of these laws now require the implementation of CP, and theyeach emphasize the government’s support for the greatest possible wastereduction, recycling, and waste elimination prior to and during the produc-tion process. This support for CP is further strengthened with the “Decisionson Environmental Protection,” issued by the State Council in 1996. Thedecisions, together with the National Emissions Control Plan for the Year2000, require that pollution discharges (i.e., releases by enterprises, cities,and regions) meet national or local standards by the year 2000. Fulfillingthese requirements solely by installation of end-of-pipe treatment will beprohibitively expensive, whereas the use of CP will make it possible forenterprises to satisfy environmental standards without a concomitant lossof market competitiveness.

Along with revisions of China’s basic environmental protection laws, thegovernment is examining the integration of CP into the following nationalregulatory programs and systems: (a) the environmental impact assessment(EIA) system; (b) the “three synchronizations” policy1; (c) the system ofsetting time deadlines for pollution control; (d) the pollutant discharge fees

1 The three synchronizations policy requires new and existing factories or projects to design, construct,and operate pollution treatment facilities simultaneously with the project’s main facilities.


TABLE 1. Policy Actions Taken or to be Adopted to Promote CP in China

1990–1995 Time Frame• Conduct CP pilot studies and demonstration projects• Reform existing environmental and industrial policies to promote CP• Analyze integration of CP with environmental management systems based on ISO 14000a

1995–2000 Time FrameIndustrial and economic policy

• Establish CP as key area of industrial policy and as a key target for industrial develop-ment in the National Plan for Economic and Social Development during the NinthFive-Year Plan and Long-Term Targets for 2010 for Environmental Protection

• Designate CP as key area for research and technology development• Use demonstration projects as a basis for creating a national “cleaner products” policy

Environmental policy• Develop a national law for cleaner production• Formulate a specific CP promotion plan for China• Add CP as a leading principle in China’s basic environmental laws• Integrate CP into existing national and local environmental regulations• Establish standards for use of environmentally damaging raw materials, processes, and

products, and set mid-term phase-out objectives• Integrate CP auditing into environmental management systems through pilot studies

and demonstration projects, especially in key polluting sectors• Establish environmental reporting requirements, in which enterprises must show their

environmental status and the progress they have made in cutting pollution

a ISO 14000 refers to a series of voluntary environmental management guidelines created by the InternationalStandards Organization.

system; and (e) the discharge permit system.2 The government’s goal is toincorporate CP requirements into each of these programs, so that enter-prises must carry out CP audits, invest in CP options, and achieve progressin using CP to fulfill requirements in environmental policies and programs.SEPA has taken a leading role in all of these activities. In addition, SEPAis making efforts to integrate CP into the development of environmentalmanagement systems in Chinese enterprises. These systems are being imple-mented in China in response to the voluntary environmental managementguidelines issued by the International Standards Organization (ISO).3

SEPA is also promoting CP through demonstration projects, pilot studies,and new environmental reporting requirements, which would show thestatus and progress made toward CP by participating companies.

In April 1997, NEPA issued its first document promoting CP in China(NEPA 1997). The document guides local environmental authorities onthe integration of CP into existing environment policies. It emphasizes the

2 For details on the first four of these programs, see Sinkule and Ortolano (1995). For further discussionof integrating CP into China’s EIA system, see Chen et al. (1999) in this issue. The fifth program, thedischarge permit system, is relatively new; it has been analyzed by Ma (1997).

3 The International Standards Organization released its environmental management system guidelines,ISO 14000, in 1996. The guidelines provide specifications for establishing the organizational structure,practices, procedures, processes, and resources for implementing and maintaining environmental manage-ment systems.

442 JI WANG

need to conduct CP publicity and training at enterprises and to work withbilateral and multilateral organizations that can assist Chinese enterpriseswith CP projects. The documents also calls on municipal economic commis-sions and industrial bureaus to work with enterprises on CP projects.

CP Approach and Practice in China

SEPA has been actively promoting the use of CP through demonstrationprojects, training, institution building, and international cooperation.SEPA’s overall technical goals for CP are to develop methodologies andCP guidelines for enterprises and key polluting sectors, and to implementthese methodologies throughout the country using CP demonstration proj-ects and extensive CP training.

Demonstration Projects and Training

China initiated its first CP demonstration project, referred to by NEPA asthe “B-4” project, in 1992. The original project was one of several undera large environmental technical assistance project funded by the WorldBank. The B-4 project, which was a collaborative effort involving NEPA,the World Bank, and UNEP, produced improvements in the environmentaland economic performance of selected enterprises, created a NationalCleaner Production Center (described following), and trained a cadre ofnational and local CP experts. In addition, the B-4 project provided astarting point for many CP policies and initiatives at both the national andprovincial levels (NEPA 1996).

CP projects have been carried out under the guidance of NEPA (andlater SEPA) and local EPBs in about one-third of China’s provinces. Theenterprises that NEPA assisted in its “CP promotion project” were in thefollowing sectors: pesticides, fertilizers, cement, distillery, brewery, metalfinishing, petrochemical, pharmaceutical, food processing, metallurgy, andprinting and dyeing. According to a NEPA survey of the CP promotionproject’s results through 1997, 219 large- and medium-sized enterprises inthe 18 provinces participating in the program had conducted comprehensiveCP audits. As a result of implementing CP options identified during theaudits, these 219 enterprises achieved significant reductions in pollutionand reaped economic benefits totaling 500 million yuan ($61 million US).The associated environmental benefits included aggregate reductions of12.6 million tons of wastewater, 78,000 tons of chemical oxygen demand(COD), 800 million cubic meters of waste gas, and 80,000 tons of solid waste.

Training in CP has been extensive. Since 1993, the B-4 project has con-ducted 140 training workshops on cleaner production and educated nearly10,000 persons in CP methods. CP training also has been integrated intoprofessional training courses for EIA, and since 1997 more than 300 peoplehave received CP training in conjunction with EIA training courses. NEPAalso produced a series of training materials (e.g., manuals for cleaner pro-


duction audits), as well as guidelines for CP audits in the pulp and paper,organic chemicals, breweries, metal finishing, and dyeing sectors. In addi-tion, SEPA publishes the Cleaner Production Newsletter, which has a na-tional circulation. Several large workshops to promote CP and the findingsof various CP studies to enterprises have taken place, including the “Na-tional Conference on the Economic Benefits of Cleaner Production,” heldin Shanghai in 1995.

SEPA is now preparing for the large-scale dissemination of informationon CP methods. In conjunction with the B-4 project, government agencieswill disseminate CP concepts and audit methodologies, to 3,000 companiesover the 5-year period that began in 1995. Moreover, SEPA is implementingthe “Ten, One Hundred, One Thousand, Ten Thousand” campaign: be-tween 1995 and 2000, CP methods will be promoted in 10 highly pollutingindustries, in 100 cities, in 1,000 enterprises, and to a total of 10,000 persons(NEPA 1997).

Institution Building

In 1992, the Chinese Research Academy for Environmental Sciences(CRAES) in Beijing was selected by NEPA and the World Bank as theorganization that would develop CP publications and technical materials tosupport the B-4 demonstration projects. CRAES soon became the principalcenter for national CP issues in China. Since 1995, CRAES has functionedas the host organization for the China National Cleaner Production Center(CNCPC), which was created through a joint UNEP/United Nations Indus-trial Development Organization (UNIDO) program to establish nationalCP centers of excellence in major cities worldwide.

UNIDO and UNEP see this effort as one response to the requests ofdeveloping countries (expressed at the UNCED in 1992) for improvedaccess to existing and new CP techniques and technologies. By early 1996,UNIDO and UNEP had set up 10 national cleaner production centers. TheCNCPC in Beijing was one of the first and it is one of the most active.The CNCPC, which employs nine professionals, has assisted in CP policyformulation, established a nationwide CP information network, held train-ing workshops, evaluated and disseminated CP technologies and methodol-ogies, provided consultation on CP audits and demonstrations, and carriedout cooperative projects with bilateral and multilateral assistance organi-zations.

The CNCPC has played a key role in promoting CP throughout China.In addition to its activities related to CP training and auditing, the centeris conducting research in related fields such as lifecycle assessment, eco-design, and environmental management systems. Under the CNCPC um-brella, eight local CP Centers have been established in the provinces andcities of Beijing, Heilongjiang, Inner Mongolia, Liaoning, Snaanxi, Shan-dong, Shanghai, and Tianjin. In addition, since 1996 five industry CP centershave been set up, one in each of the following sectors: petrochemical,

444 JI WANG

chemical, aerospace, metallurgy, and light industry. These centers have beensuccessful in assisting key industries and enterprises to establish technicalcapabilities for CP. The role of the CP centers is to set up demonstrationprojects at the local level, carry out CP auditing in enterprises, hold CPtraining workshops, and act as a CP consulting center for local environmen-tal authorities. China also has plans to develop an additional five to sixregional centers for CP by the year 2000.

Finally, a network called the National Cleaner Production Roundtablewas established in 1996. The network, comprised of CP experts from NEPA,CNCPC, industry, and academia, provides information, training, and con-sulting services to more than 75 industrial, research, and environmentalinstitutes in China.

Case Studies

As part of the B-4 project, CP audits were undertaken in 29 Chineseenterprises, including the Beijing Brewery and Beijing Chemical Factory.NEPA selected the 29 companies because they were in the most highlypolluting industrial sectors in the country, including the metal finishing,brewery, tannery, cement, and chemical industries (NEPA 1996). NEPAand enterprise staff conducted follow-up surveys and research in nine ofthe enterprises. One of the major objectives of the follow-up work was toidentify the factors that facilitated or impeded CP implementation in thecase study firms. The case studies revealed that enterprises with successfulCP programs had staff who recognized that, in contrast to EOP solutions,CP could bring about economic as well as environmental benefits. Theprospect of attaining both economic and environmental gains is a key reasonwhy many Chinese enterprises have a favorable view of CP.

An example of a CP case study undertaken as part of the B-4 project isShaoxing General Bicycle Plant. A CP audit conducted in the factoryidentified 34 potential CP measures, 24 of which required no capital invest-ment. These 24 options were immediately implemented, and they savedthe Bicycle company $4,800 US a month in raw materials and environmentalprotection expenses. Eleven other options requiring only minimal invest-ment are currently being implemented. The CP audit also identified threelong-term, high investment measures, including an automated plating line.These options are being implemented and factory staff estimated a paybackperiod of 4.6 years. The three, long-term CP projects, which will cost$416,000 US, will produce the following environmental benefits: a 38%reduction in acid and alkaline wastewaters, a 23% cut in nickel concentra-tions in rinse waters, and a 35% drop in nickel wastewater discharges. Inaddition, chrome rinsewater discharges will be cut by a third, and thechromium concentrations in wastewater discharges are expected to decreaseby 90%.


TABLE 2. Goals of the NEPA/UNEP/World bank Cleaner ProductionProject (B-4)

• Develop and test a Chinese methodology for implementing CP• Develop and test Chinese training materials based on this methodology, and train Chinese

to be trainers for the demonstration projects• Initiate and carry out industry demonstration projects• Identify and analyze obstacles to CP in industry and in governmental policy• Formulate recommendations for effective CP implementation policies• Build a CP network based on existing organizations• Disseminate the B-4 project results among high-level political, governmental, and indus-

trial authorities• Build CP expertise within a variety of institutions across China

International Cooperation

Table 2 highlights key strategies of the B-4 project, which is known formallyas the “NEPA/World Bank/UNEP Cleaner Production Cooperation Proj-ect” (B-4). The project had a total budget of $6.2 million US: 10% of thebudget was used for training, consulting, and research, and 90% was usedas loans for CP investments in companies participating in the CP auditsand demonstration projects. Most training, consulting, and research activi-ties were undertaken between 1992 and 1996. Loan repayments are stillunderway and are expected to be completed in the year 2000. Participantsin the B-4 project included units of the central government (such as NEPA,the Ministry of Chemical Industry, the Ministry of Finance, the State Plan-ning Commission, and the State Economic and Trade Commission), unitsof local governments (such as the environmental protection bureaus [EPBs]of Beijing, Yantai, and Shaoxing), and enterprises in the following sectors:chemicals, light industry, iron and steel, textile, metallurgy, and non-ferrousmetals. Technical support for the B-4 project came from sector, academic,and policy experts within China, and from international advisors.

The B-4 project yielded the following lessons about promoting CP inChina (NEPA 1996):

• A “start small but think big” approach can lead to major results.• A comprehensive national CP program will need to be created to carry

out extensive CP dissemination over the coming years.• Enterprises can profit from concentrating first on cheap and simple

CP options with the potential to yield rapid returns.• Existing environmental institutions should be linked with sector-related

organizations through a CP network.

In addition to the B-4 project and the UNEP/UNIDO program to createthe China National Cleaner Production Center, China has participated inother international projects aimed at promoting CP in China. Table 3 lists

446 JI WANG

TABLE 3. Key International Projects to Promote CP in China

BudgetProject Name Key Organizations Time Period (106 US$)

Cooperative CP Projects withNational Government

NEPA/World Bank/UNEP World Bank, 1992–1996 6.20Cleaner Production NEPA, UNEPProject (B-4 project)

UNEP/UNIDO National UNIDO, UNEP 1995–1998 0.90Cleaner ProductionCenters Project

International Diffusion of Illinois EPA, 1995–1996 0.50Pollution Prevention NEPA, USTechnologya EPA, etc.

Sino-Canada CP CIDA, SETC, 1997–2002 7.50Cooperation Project NEPA

Sino-Norway CP Project SSTC, Norway 1994–1998 0.45CooperationDevelopmentProgram,Beijing EPB

Promotion of Clean ADB, SDPC, SETC, 1999–2001 3.50Technology MOS, SEPA,

MOA, NPCCooperative CP Projects

with Local and ProvincialGovernments

Sino-Britain CP Project Overseas 1995–1998 0.80under Support Programme for Developmentthe Urban Rehabilitation of Agency of Britain,Shanghai Project Shanghai EPB

Capacity Building for Benxi Municipal 1997–2000 1.03Widespread Adoption of CP Government,Air Pollution Control in Benxi BeijingMunicipality University, UNDP,

CNCPC, etc.CP in Industry under EU, Liaoning 1999–2004 15.00

Integrated Environment ProvincialProgram in Liaoning Province Government

a Full project title: International Diffusion of Pollution Prevention Technology through TechnologyOutreach, Assessment, Demonstrations, and Evaluations for Metal Finishing, Petrochemical, andPharmaceutical Industries in China.ADB 5 Asian Development Bank; CIDA 5 Canadian International Djevelopment Agency; EPB 5Environmental Protection Bureau; EU 5 European Union; MOA 5 Ministry of Agriculture; MOS 5Ministry of Science; NPC 5 National People’s Congress; SDPC 5 State Development and PlanningCommission; SETC 5 State Economic and Trade Commission; SSTC 5 State Science and TechnologyCommission.


these projects, and several of them are described briefly here. The projectinitiated by the Illinois Environmental Protection Agency (EPA) is formallyentitled “International Diffusion of Pollution Prevention Technologiesthrough Technology Outreach, Assessments, Demonstrations, and Evalua-tion of the Metal Finishing, Petrochemical, and Pharmaceutical Industriesin China” (Illinois EPA 1997). In addition to the Illinois EPA, projectpartners included the US EPA, NEPA, UNEP, the World Bank, and theChemical Industry Council of Illinois. The project, funded under a US EPAprogram called the “Environmental Technology Initiative,” was intendedto promote pollution prevention practices and provide export opportunitiesfor American companies that offer environmental services and technolo-gies. Project activities included pollution prevention training, industrialfacility visits and assessments, technology demonstrations, and technologytransfer to Chinese enterprises.4

Table 3 also lists the Sino-Canada CP Cooperation Project, one of threemajor programs included in China’s Priority Program for Agenda 21. TheCanadian International Development Agency (CIDA), the State Economicand Trade Commission (SETC), and NEPA organized the project. Partici-pants include several industrial ministries, local economic commissions, andenterprises. A total of $7.5 million US will be disbursed between 1997 and2002. In addition to demonstration projects at participating enterprises, theSino-Canada CP Cooperation Project also will develop a CP technologyplan for selected industries and create a CP information system and data-base for use throughout China.

The Sino-Norway CP Cooperation Project was organized by the StateScience and Technology Commission—the agency in charge of implementa-tion of several Agenda 21 CP programs—and the Norway Cooperation De-velopment Program. The Beijing EPB and the Norway Engineers Associationimplemented the project. The first phase was a 2-year project (from 1994 to1996) that involved 26 Chinese enterprises. The second phase was from 1997to 1998, and it involved two parts, one for conducting CP audits in additionalenterprises, and the other for examining policy issues related to CP.

Most recently, in 1998 the Asian Development Bank (ADB), the WorldBank, and the Chinese government approved the “Clean Technology Tech-nical Assistance (TA) Cluster.” The TA program is designed to overcomebarriers to the promotion of clean technology in China, and its overallgoal is to improve national policies, institutional capacity, and financingmechanisms for the adoption of clean technologies in China. The TA clusterwill support the use of CP technology through sub-projects that addressfour specific objectives: (1) reform China’s policy framework to removecurrent barriers and constraints to CP; (2) build capacity of relevant agencies

4 For additional information on the programs of international cooperation with China by the IllinoisEPA, see Cushing and Wise (1999).

448 JI WANG

to strengthen environmental management; (3) improve access to informa-tion on successful, financially attractive clean technology experiences; and(4) develop new project financing concepts and market-oriented incentivesto encourage clean technology in a cost-effective manner in small andmedium-size enterprises, including TVIEs. Details of the TA program’stotal budget, time table, and participating agencies are provided in Table 3.

In addition to the national CP projects listed in Table 3, some CP coopera-tion projects involve countries working primarily at the local level. One ofthese programs was the Sino-Britain CP Sub-project under the SupportProgram for the Urban Rehabilitation of Shanghai. This effort, which wasinitiated by the Shanghai Municipal Government and British OverseasDevelopment Agency, was undertaken by the Shanghai EPB. Partnersincluded the Shanghai Economic Commission, a team of consultants fromthe United Kingdom, and associations for the following industrial sectors:chemicals, pharmaceuticals, metallurgy, and textiles. Six companies demon-strated economic and environmental benefits through implementation ofCP projects as part of this subproject.

Barriers Impeding the Adoption of CP in China

The experiences with CP provide a basis for identifying obstacles to promot-ing CP in China. Five types of impediments are discussed: awareness,regulatory, financial, technological, and organizational barriers (Table 4).

Awareness Problems

An important barrier to the adoption of CP in China is a lack of awarenessof what CP can accomplish. In addition to factory managers and workers,many leaders of environmental protection bureaus, economic planning com-missions, industrial bureaus, and enterprises are not aware that CP can yieldsignificant environmental benefits while saving resources and enhancingcompany profits (MPRCEE 1997). Many enterprises and industrial andeconomic bureaus still consider environmental protection to be an issuewholly separate from industrial process control, production, and profitabil-ity. This conceptual blind spot is very widespread and has led to difficultiesin introducing CP into all aspects of factory design, product development,and manufacturing. Most enterprises do not yet have the internal or externalpressure needed to encourage them to bring CP into their routine opera-tions. An awareness of the potential for economic gain could play a keyrole in promoting CP to both enterprises and governmental organizations.

The lack of understanding of CP within enterprises is demonstrated intwo ways. First, most enterprise leaders to not consider CP as a main avenueto improving the overall quality of their products and processes, increasingtheir profitability and competitiveness, and reducing their waste discharges(Warren 1996). Second, traditional views, especially the idea that profitsdepend on high investment and large-scale operations, have not been over-


TABLE 4. Barriers to CP in China

Types Factors

Awareness Weak environmental awareness is a common problem.problems Decision-makers possess a weak understanding of CP.

A lack of R&D information for CP exists in China.If no external funding exists, continuity in CP suffers.

Regulatory Macro-level policies (e.g., national plan targets) focus on EOPimpediments treatment, not CP.

Environmental policies fail to recognize linkages with CP.Pollutant discharge permits do not pressure firms to reduce pollution.Discharge fees are too low, and fees subsidize EOP treatment.

Financial Financial and tax policies do not encourage CP in enterprises.barriers Economic departments still focus on EOP treatment.

Shortage of enterprise funds limits implementation of CP.A lack of incentives for investment in CP exists.Firms underestimate CP benefits because of accounting problems.

Technological Technology innovation either is not encouraged or is focused onhurdles EOP treatment.

Medium and small enterprises have weak technological capabilities.Enterprises use obsolete technologies from the 1960s and 1970s, and

have weak product quality or process control.Organizational CP efforts are not integrated in enterprises, so CP is carried out in

barriers fragmented manner.Management teams focus on output.Lack of continuity exists in CP efforts.CP is carried out by environment departments in enterprises; because

they have limited authority, CP is thus not carried out on afactorywide basis.

come. As a result, enterprises often have not been willing to pursue CPwithout guarantees of external financing, and opportunities to make largegains from low-cost (or no-cost) CP activities have not been widely exploited(MPRCEE 1997).

Regulatory Impediments

Some macro-level management policies developed at the national levelhave had the effect of influencing factory level decisions in ways that donot encourage CP. For example, although China’s national economic andsocial development program and annual plan have included requirementsto strengthen management, renovate technology, and abate waste dis-charges, the main pollution control targets stipulated by these plans arethe amounts of pollutants emitted. Most enterprises believe the principalmeans for reducing pollutant discharges is end-of-pipe treatment. Thisemphasis on pollution abatement targets within national economic plansand industrial program has led enterprises to think in terms of expandingend-of-pipe treatment to meet national and local discharge standards, ratherthan in terms of using CP to generate less pollution during production.

450 JI WANG

Ironically, some existing environmental policies also provide barriers tothe adoption of CP. In particular, current implementation of the followingfour policies fails to recognize important linkages with CP: environmentalimpact assessment, three synchronizations, wastewater discharge permits,and pollution discharge fees. For example, China’s current EIA system andthe three synchronizations policy impede the adoption of CP in two ways.First, both policies are based on controlling industrial pollution by meansof end-of-pipe solutions: treatment is prescribed to meet national and localdischarge standards. Second, EIA policy misses a key opportunity to en-courage CP, because EIA occurs during the feasibility study rather thanduring the design stage of proposed industrial construction projects. Be-cause decisions on production process design are made prior to the EIAprocess, the environmental protection aspects of production engineeringand the potential to reduce the generation of waste with CP are neglected.Thus, in current EIA practice, ways of modifying industrial productionprocesses through CP are not formulated, and no comparison is made ofalternative CP strategies for meeting discharge standards. (For furtherdiscussion of China’s EIA system and CP, see Chen et al. 1999).

Three principal impediments to CP exist in the context of China’s dis-charge permit system, a program that is still being implemented on a trialbasis. First, EPBs have no power to define and enforce environmentalindexes or standards for raw materials, technology, or equipment. There-fore, requirements for production processes cannot be included among theconditions spelled out in discharge permits. Second, the permitted amountsof waste discharge frequently are less stringent than those prescribed bynational discharge standards, and thus they do not place enough pressureon enterprises to reduce their pollution by means of cleaner production.Third, the permit system (and other regulatory policies) does not include aneffective approach to cross-medial pollution because there is no integratedsystem of permits related to the different environmental media. Permitsregulating air, water, and soil discharges are unrelated to each other, andthus the permit system does not encourage an integrated, comprehensiveapproach (the way CP does) toward pollution reduction.

In China, enterprises that do not satisfy waste discharge standards haveto pay discharge fees. The discharge fee system fails to encourage CPbecause the imposition of fees generally does not pressure enterprises toeither improve factory operations and maintenance, or strengthen theirmanagement to reduce pollutant discharges. This is because fees usuallyare far lower than pollution abatement costs, particularly for small- andmedium-sized enterprises. Because discharge fees are so low, the majorityof enterprises choose to pay the discharge fees and associated fines insteadof investing in waste reduction measures. Another problematic aspect ofthe fee system is a provision that allows up to 80% of discharge feescollected to be returned to enterprises as subsidies for waste treatment.


Because these subsidies are directed only at end-of-pipe treatment, thesubsidy program does not encourage enterprises to focus attention on CPas a way of meeting discharge standards and thereby avoiding fee payments.

Financial Barriers

Financial policies and conditions are another set of impediments to CPin China. At present, there are no significant financial and tax policiesencouraging enterprises to bring their production technologies and productsinto accord with CP. Moreover, although environmental concerns havegradually been added to national and local policies related to technologicalinnovation in industry, some economic departments at the provincial, city,town, and village levels continue to focus on increasing production andcontrolling industrial pollution with EOP treatment. Economic or financialdepartments that have had success in promoting pollution preventionthrough the use of CP options should be encouraged to disseminate thisexperience among other economic departments and government units.

A shortage of funds to implement CP poses long-term problems for manycompanies, particularly with the national government’s current policy oflimiting its interventions in the industrial economy. Once enterprises ex-haust low-cost CP measures and they begin to consider more expensiveCP options, they will encounter problems maintaining continuity of theirCP programs (MPRCEE 1997). Moreover, because enterprises tend to usetheir profits by reinvesting them to enlarge production and thereby expandoutputs, the economic returns from CP are not likely to be reinvested inadditional CP projects. The absence of market prices (e.g., energy andwater prices do not reflect true market values) also inhibits firms fromimproving resource use efficiency and using less-polluting managementpractices. These disincentives for efficient resource use are compoundedby inadequacies in accounting. Enterprises will not have an accurate assess-ment of the benefits of CP until they improve their accounting systems. Incurrent practice, the accounting systems of enterprises count environmentalcosts as “external costs,” i.e., as costs borne by others. Another accountingdeficiency related to the inability of many enterprises to properly calculatethe financial costs and benefits of CP options.

Technological Hurdles

Still another set of impediments to the adoption of CP relates to the existingstate of China’s production technology. CP cannot flourish unless techno-logical innovation is fostered. However, in China, most technological inno-vations encouraged in the environmental protection field have been tar-geted toward new technology for end-of-pipe treatment systems. Oneexception to this situation has been the promotion of clean coal technologyin China. A World Bank (1997) study found that the adoption of best-

452 JI WANG

TA

BL

E5.

Stra

tegi

esof

Chi

na’s

Act

ion

Pla

nto

Pro

mot

eC

Pin

Chi

naa

Shor

t-T

erm

Stra

tegi

es(1

995–

1999

)P

olic

ies

and

regu

lati

ons

•St

reng

then

coor

dina

tion

betw

een

gove

rnm

ent

econ

omic

and

envi

ronm

enta

lde

part

men

ts(e

.g.,

NE

PA

and

SET

C).

•A

dda

CP

arti

cle

toC

hina

’sE

nvir

onm

enta

lP

rote

ctio

nL

awof

the

Peo

ple’

sR

epub

licof

Chi

na.

•R

efor

mex

isti

ngen

viro

nmen

tal

polic

ies

and

prog

ram

sin

Chi

nato

incl

ude

CP

.•

EIA

syst

em:r

evis

eE

IAre

gula

tion

sto

requ

ire

EIA

duri

ngpr

ojec

tde

sign

and

toin

clud

eC

Pau

dits

.•

Thr

eesy

nchr

oniz

atio

nspo

licy:

requ

ire

CP

mea

sure

sto

bede

sign

ed,c

onst

ruct

ed,a

ndop

erat

edsi

mul

tane

ousl

yw

ith

the

desi

gn,c

onst

ruct

ion,

and

oper

atio

nof

the

mai

npr

ojec

t.•

Dis

char

gefe

essy

stem

:rai

sefe

esan

dus

efe

esu

bsid

ies

for

CP

,not

for

end-

of-p

ipe

trea

tmen

t.•

Dea

dlin

esfo

rpo

lluti

onco

ntro

l;re

quir

eC

Pau

dit

and

assi

gnpr

iori

tyto

CP

opti

ons

over

end-

of-p

ipe

trea

tmen

tfo

rm

eeti

ngde

adlin

es.

•D

isch

arge

perm

its:

mak

een

terp

rise

ssu

bmit

aC

Pau

dit,

prop

osed

CP

mea

sure

s,an

dpr

ogre

ssre

port

sw

hen

appl

ying

for

new

perm

imts

.•

Dev

elop

sect

or-s

peci

ficen

viro

nmen

tal

stan

dard

s.•

Dev

elop

ente

rpri

sere

port

ing

requ

irem

ents

.•

Inte

grat

eC

Pau

diti

ngin

toen

viro

nmen

tal

man

agem

ent

syst

ems.

Aw

aren

ess

and

trai

ning

•St

reng

then

med

ia-b

ased

publ

icit

yan

ded

ucat

ion

for

CP

.•

Init

iate

larg

e-sa

leC

Ptr

aini

ng:t

rain

3,00

0pe

rson

sin

CP

wit

hin

5ye

ars.

•E

xpan

dC

Pde

mon

stra

tion

proj

ects

and

popu

lari

zeno

-an

dlo

w-c

ost

CP

opti

ons.

•E

stab

lish

are

gion

alte

amfo

rC

Pan

dfiv

eto

six

regi

onal

CP

cent

ers.

Tec

hnol

ogic

alis

sues

•P

rodu

cean

ddi

stri

bute

tech

nica

lC

Pgu

idel

ines

for

key

pollu

ting

sect

ors.

•A

sses

san

dse

lect

best

avai

labl

eC

Pte

chno

logi

es.

Fin

anci

alin

cent

ives

•A

lloca

tepa

rtof

tech

nica

lin

nova

tion

fund

ssp

ecifi

cally

for

deve

lopm

ent

ofC

Pte

chno

logi

es.

•E

stab

lish

are

volv

ing

fund

tosu

ppor

tC

Ppr

ojec

ts.

•R

edir

ect

envi

ronm

enta

lsu

bsid

ies

toC

Ppr

ojec

tsan

daw

ayfr

omen

d-of

-pip

etr

eatm

ent.

(con

tinue

d)


TA

BL

E5.

(con

tinue

d)

Lon

g-T

erm

Stra

tegi

es(1

999–

2002

)R

egul

ator

yan

dno

n-re

gula

tory

acti

ons

•H

ave

indu

stri

alm

inis

trie

sfo

rmul

ate

long

-ter

mse

ctor

goal

sfo

rC

Pan

dde

velo

psp

ecifi

cre

quir

emen

tsfo

rC

Pin

thei

rte

chni

cal

polic

ies

and

regu

lati

ons.

•C

reat

evo

lunt

ary,

lega

llybi

ndin

gag

reem

ents

for

CP

betw

een

indu

stry

and

gove

rnm

ent,

whe

rela

rge-

scal

eno

n-co

mpl

ianc

ew

ith

agre

emen

tsco

uld

lead

toim

posi

tion

ofre

gula

tory

targ

ets.

Eco

nom

ican

dfin

anci

alin

cent

ives

•P

rovi

desh

orte

rde

prec

iati

onpe

riod

sfo

rC

Pin

vest

men

t.•

Enc

oura

gefa

vora

ble

tax

polic

ies

and

low

-int

eres

tlo

anpr

ogra

ms

for

CP

and

clea

ner

prod

ucts

.•

Add

taxe

son

raw

mat

eria

lsan

dpr

oduc

tsco

ntai

ning

haza

rdou

ssu

bsta

nces

.G

over

nmen

tan

dpu

blic

pres

sure

•R

equi

rego

vern

men

tto

focu

spr

ocur

emen

tof

envi

ronm

enta

llyso

und

prod

ucts

.•

Incr

ease

the

influ

ence

and

part

icip

atio

nof

the

publ

ican

dno

n-go

vern

men

tal

orga

niza

tion

sin

prom

otin

gC

P.

aSo

urce

:M

PR

CE

E(1

997)

.

454 JI WANG

practice technology could reduce China’s coal consumption by 20% andyield significant benefits for resource use to industry. The general emphasison end-of-pipe treatment has led to a serious shortage in research on CPmethods. Only large domestic enterprises with strong capabilities to conductscientific research and technology development can innovate. Most medi-um- and small-sized Chinese enterprises have weak technological capabili-ties and are unable to develop new products and process technologies ontheir own (Chen 1996). Even the exchange of information on new processtechnologies is not taking place effectively, and where such exchanges occurthey are typically made on a small scale.

For China to make advances in promoting CP, outdated productionprocesses will have to be retrofitted. At present, most Chinese enterprisesstill operate using production processes and equipment from the 1960s and1970s. These technologies are characterized by high material consumptionper unit output and low production efficiency. Improvements in this situa-tion have not been forthcoming because most enterprises focus on increas-ing their outputs, and they pay relatively little attention to improving theirequipment and production systems. In addition to using obsolete technolo-gies, many enterprises have poor systems in place for effective operationand maintenance and for product quality control. This results in seriousproblems with leaks and spill, and products that must be discarded becausethey fail to meet quality specifications.

Organizational Barriers

CP is a complex undertaking that requires organizational changes as well asengineering and equipment changes. However, enterprises typically fail toset up organizational units to investigate CP options on a factorywide basis(Warren and Ortolano 1998). Moreover, department-level responsibilitiesfor promoting and implementing CP within enterprises remain unclear. Thus,only a limited number of enterprises have carried out CP in a systematic,integrated way that pools the efforts of individual departments and workshops.

Other organizational barriers relate to the narrow focus on many enter-prises on output. The management teams in many Chinese companies rarelyfocus on quality and overall performance; only output receives attention.This exclusive focus on output is not effective as a long-term strategy.Instead, managers need to put increased efforts into optimizing the produc-tion process to increase resource use efficiency and product quality.

Continuity is also a problem in many Chinese firms. In some companieswhere CP options have been implemented, these efforts have not beenmonitored and extended. Setting up environmental management systemsto ensure adequate follow-through on implementation of CP projects repre-sents one solution to this problem. Finally, the implementation of CP proj-ects in many Chinese enterprises has been organized exclusively by environ-


mental protection departments. The problem is that these departmentsgenerally do not have the authority and expertise to apply CP to an enter-prise’s entire production process on a comprehensive, factorywide basis.Thus, environmental protection departments often fail to recognize effec-tive, low-cost CP measures within the individual workshops where a facto-ry’s outputs are produced.

Future Directions for CP in China

China’s government hopes to transform existing patterns of industrial devel-opment and pollution control by making CP a priority in its effort tointegrate environmental concerns into development decisions. The newemphasis on CP will allow enterprises to incorporate innovations in produc-tion technology and management into decisions aimed at meeting dischargestandards and limiting quantities of waste discharged.

While China still faces some significant obstacles to making CP a center-piece of its environmental protection efforts, the government has made ita priority to promote CP in the ninth 5-year period (i.e., 1996–2000) andbeyond. SEPA, the State Economic and Trade Commission, and the Na-tional People’s Congress are in the process of creating laws, regulatorypolicies, incentives, and management systems to promote CP. A “Law forCleaner Production” is currently being drafted for the National People’sCongress (slated for promulgation by 2002), and an action plan has beendevised to address existing barriers to CP in China. Specific recommenda-tions for new economic and regulatory policies and actions that can be takenby different “actors,” including enterprises, ministries, and non-governmentorganizations, to promote CP will be forthcoming from SEPA. Table 5 listssome of these recommendations (MPRCEE 1997), which include strategiesfor the “short-term” period (i.e., from 1998–1999) and actions for the “long-term” period (i.e., from 1999–2002).

I am grateful for the colleagues and friends both at home and abroad for promoting cleanerproduction in China. In particular, I would like to thank John Kryger, Sybren de Hoo, Renevan Berkel, Mary Gade, Nick Anderson, C. H. Zhang, Ma Xiaoying, and Mark Radka fortheir hard work to promote CP on behalf of the many international organizations involvedin CP projects in China. I acknowledge the many Chinese colleagues from industry, EPBs,research institutions, and universities who have carried out CP implementation in China withgreat enthusiasm. I also thank Kimberley Warren for her helpful comments and her reviewof a draft of the article.

References

Chen, Y.B. 1996. Strategy for Sustainable Development. Beijing: China’s PlanningPress.

456 JI WANG

Cushing, K.K., Wise, P., and Hawes-Davis, J. 1999. Evaluating the implementationof cleaner production audit demonstration projects. Environmental Impact Assess-ment Review 19(5/6):569–586.

Chen, W., Warren, K.A., and Duan, N. 1999. Incorporating cleaner productionanalysis into environmental impact assessment in China. Environmental ImpactAssessment Review 19(5/6):457–476.

Illinois EPA. 1997. International diffusion of pollution prevention technologiesthrough technology outreach, assessments, demonstrations, and evaluation ofmetal finishing, petrochemical, and pharmaceutical industries in China. Reportprepared by PRC Environmental Management Inc., Chicago, IL.

Ma, X. 1997. Controlling Industrial Water Pollution in China: Compliance in theContext of Economic Transition. Ph.D. dissertation, Department of Civil andEnvironmental Engineering, Stanford University, Stanford, CA.

MPRCEE (Modern Policy Research Center for Environment and Economy),NEPA, and the World Bank. 1997. Cleaner Production in China: Design of anEffective Policy Package and Action Plan. Unpublished report of the B-4 Sub-project Research Group.

NEPA (National Environmental Protection Agency), State Planning Commissionand State Economic and Trade Commission. 1997. The National Ninth Five-YearPlan and the Long-Term Targets for the Year 2010 for Environmental Protection.Beijing: China Environmental Science Press.

NEPA and the National People’s Congress, 1997b. The Handbook for Environmen-tal Laws and Enforcement. Beijing: China Environmental Science Press.

NEPA and the China National Cleaner Production Center, UNEP, and the WorldBank. 1996. Cleaner Production in China: A Story of Successful Cooperation.Paris: UN Press.

Sinkule, B., and Ortolano, L. 1995. Implementing Environmental Policy in China.Westport, CT: Praeger.

State Planning Commission and State Science and Technology Commission. 1994.China’s Agenda 21: White Paper on China’s Population, Environment and Devel-opment in the 21st Century. Beijing: China Environmental Science Press.

UNEP (United Nations Environment Programme). 1994. Cleaner ProductionWorldwide, Volume II. Paris: UN Press.

Warren, K.A. 1996. Going Green in China: An Organization Theory Perspectiveon Pollution Prevention in Chinese Electroplating Factories. Ph.D. dissertation,Department of Civil and Environmental Engineering, Stanford University, Stan-ford, CA.

Warren, K.A., and Ortolano, L. 1998. Pollution prevention in China’s electroplatingindustry. Environmental Engineering and Policy 1:11–23.

World Bank. 1997. Clear Water, Blue Skies. China 2020: China’s Environment inthe New Century. Washington, DC: World Bank.

Xie, Z.H. 1996. A new industrial civilization. Our Planet 7(6):12–13.

Documents

China's national cleaner production strategy