Enhancing China’s RegulatoryFramework for Eco-Industrial Parks

Comparative Analysis of Chineseand International Green Standards

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Enhancing China’s RegulatoryFramework for Eco-Industrial Parks

Comparative Analysis of Chineseand International Green Standards

April 2019

The World Bank

Table of Contents

Acknowledgments...............................................................................................................................Acronyms.............................................................................................................................................Executive Summary............................................................................................................................1. Introduction..................................................................................................................................... 1.1 Project background and context................................................................................................ 1.2 Scope of the report.....................................................................................................................2. Green Industrial Parks in China: History, Development, and Regulatory Framework.......... 2.1 From industrial parks to eco-industrial parks........................................................................... 2.2 Regulatory framework of IP management and EIP promotion in China.................................. 2.3 The “Green Triangle” of Chinese EIP standards....................................................................... 2.4 Evaluation of the Chinese EIP standards...................................................................................3. Comparative Analysis of the Chinese and International EIP Frameworks............................... 3.1 Park management: “General vs. specific” and “implicit vs. explicit” requirements................ 3.2 Environmental performance: “Result-based” vs. “process-based” assessment........................ 3.3 Social performance: “Implicit vs. explicit” and “moral standards vs. legal requirements”...... 3.4 Economic performance: “Economic standards vs. socioeconomic standards”.........................4. Application of the EIP Framework in the Fuzhou High-Tech Zone........................................... 4.1 Overview of FHTZ..................................................................................................................... 4.2 Compliance barriers...................................................................................................................5. Fiscal and financial instruments to promote and develop EIPs.................................................. 5.1 Evaluation of the incentive frameworks of the Chinese EIP standards.................................... 5.2 Green finance for the green transformation and development of IPs in China........................6. Conclusions and Policy Recommendations...................................................................................Appendixes........................................................................................................................................... Appendix A. Regulatory framework of IP management and EIP promotion in China................... Appendix B. Standard for National Demonstration EIPs (MEE)................................................... Appendix C. Basic requirements and performance indicators of applying for circular economy transformation demonstration IPs (NDRC and MOF)............................... Appendix D. Requirements/Qualifications of Green IPs (MIIT).................................................... Appendix E. Comparison of “China Green Triangle” against the EIP Framework........................ Appendix F. Self-assessment by Fuzhou High-tech Zone against the EIP Framework.................. Appendix G. Financial instrument/policies promoting the development of EIPs in China............ Appendix H. Comparison between the Chinese EIP standards...................................................... Appendix I. An overview of the WBG/UNIDO/GIZ International Framework for EIPs............... Appendix J. Examples of potential incentives for complying with EIP standards.........................

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References............................................................................................................................................Figures Figure 2.1 General managerial and operational structure of Chinese EIPs.................................... Figure 2.2 Number of “green-certified” IPs in China regulated by MEE, MIIT, and NRDC........ Figure 2.3 Summary of the indicator comparison.......................................................................... Figure 3.1 Comparison between the Chinese green standards and the EIP Framework................ Figure I.1 Core EIP categories and topics...................................................................................... Figure J.1 Potential incentives for complying with EIP standards.................................................

Tables Table ES1. Improvement in environmental performance of eco-/green and circular economy demonstration pilot parks in China, 2011−15................................................................ Table ES2. Number and proportion of certified EIPs in China....................................................... Table 2.1 Number and proportion of “green-certified” IPs in China.............................................. Table 2.2 Environmental performance improvement of EIPs and circular economy demonstration pilot parks in China, 2011-15................................................................. Table 3.1 Summary of the comparative analysis between the EIP Framework and Chinese standards......................................................................................................................... Table 4.1 Summary of FHTZ’s 2018 self-assessment against the EIP Framework....................... Table C.1 Performance indicators................................................................................................... Table D.1 Green IP Indicator System.............................................................................................. Table E.1 A detailed comparison of the three Chinese IP green standards..................................... Table E.2 A detailed comparison between the Chinese standards and the EIP Framework...........

Boxes Box 1.1 Leading international EIP examples.................................................................................. Box 2.1 China’s regulatory frameworks on monitoring and evaluation of EIP standards.............. Box 4.1 Summary of FHTZ’s self-assessment against the MIIT Framework................................ Box 4.2 Performance monitoring and data collection systems for EIPs......................................... Box 4.3 Environmental management systems and ISO 14000 standards for IEs........................... Box 4.4 Fostering industrial symbiosis through regional networks................................................ Box 6.1 Example of a tiered EIP certification system..................................................................... Box J.1 Influence of foreign investment on environmental awareness...........................................

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This report was prepared by a team led by Marcin Piatkowski (Senior Economist, World Bank) and comprising Antoine Coste (Economist, World Bank), Lei Shi, Yufan Du, and Zezhou Cai (Consultants). The report benefit-ted from valuable comments from Barjor Mehta, Wanli Fang, Douglas Zeng, Sinem Demir, and Etienne Kechi-chian. It was written under the overall guidance of Jennifer Isern and Irina Astrakhan.

Acknowledgments

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Acronyms

CBRCCDBCIRCCNISCSRCEIAEIPEMSEnMSFHTZGHGGIZIAVIPISOMOCM&EMEEMEPMIITMOFMOSTNDRCNPCOH&S PBoCPPPRMBSMEsTEDAUNIDO

China Banking Regulatory CommissionChina Development BankChina Insurance Regulatory CommissionChina National Institute of StandardizationChina Securities Regulatory Commissionenvironmental impact assessmenteco-industrial parkenvironment management systemenergy management systemFuzhou High-Tech Zonegreenhouse gasDeutsche Gesellschaft für Internationale Zusammenarbeitindustrial added value industrial parkInternational Organization for StandardizationMinistry of Commerce monitoring and evaluationMinistry of Ecology and Environment Ministry of Environment ProtectionMinistry of Industry and Information Technology Ministry of Finance Ministry of Science and TechnologyNational Development and Reform Commission National People’s Congress Occupational Health and SafetyPeople’s Bank of Chinapublic-private partnershiprenminbi (Chinese currency unit)small and medium enterprisesTianjin Economic-Technological Development AreaUnited Nations Industrial Development Organization

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1 China’s GDP per capita increased from US$308 (in constant 2010 US dollars) in 1978 to US$7,329 in 2017, according to the World Bank’s World Development Indicators (WDI) database. In 2018, it likely reached around US$7800, or almost 26 times more than in 1978. 2 Sheng Tai Wen Ming (生态文明) in Chinese. 3 The State Council of the People’s Republic of China (2016a). 4 President Xi Jinping (2017).5 The State Council of the People’s Republic of China (2016a).6 National Bureau of Statistics of the People’s Republic of China (2018). 7 China Environment News (2015). 8 An industrial park (IP), also commonly called an industrial estate or zone, can be defined as “a tract of land developed and subdivided into plots according to a comprehensive plan with or without built-up factories, sometimes with common facilities for the use of a group of industries” (UNIDO 1997). IPs are generally characterized by a geographically delimited area, usually physically secured, above-average infrastructure for the country, and a single management entity or adminis-tration. They may offer certain other benefits based on physical location within the zone, such as streamlined business regulations and procedures. In the case of Special Economic Zones (SEZs), they may also form a separate customs area, distinct from the national customs area (duty-free benefits). In China, this may correspond to different types of develop-ments, including SEZs, economic and technological development zones (ETDZs), free trade zones (FTZs), export-process-ing zones (EPZs), and high-tech industrial development zones (HIDZs). (Zeng 2011).

China has impressed the world with its rapid economic growth over the past four decades, during which time it has increased its real income per capita by more than 25 times. 1 However, the attendant environmental costs have also been significant, jeopardizing economic and social gains from growth. To move toward sustainable development and reduce the environmental impact of further economic growth, the Chinese government has started to prioritize green development and the building of an “ecological civilization.” 2 China’s 13th Five-Year Plan (2016−2020) has upgraded the building of the “ecological civilization” to the level of “national strate-gy”—a policy target of top priority. During the 19th National Congress of the Communist Party of China in October 2017, President Xi Jinping emphasized that “energy conservation and environmental protection are fundamental national strategies” and “lucid waters and lush mountains are invaluable assets.” President Xi called for enhanced efforts to “continue the ‘Beautiful China’ initiative to create good working and living environments for our people and play our part in ensuring global ecological security.” 4 Prime Minister Li Keqiang also noted that “the level of ecological civilization should be progressively upgraded to promote green development and achieve a co-development of economic prosperity and environmental protection.”5 The sustainable transition of the Chinese industrial sector is a key factor that will determine the success of the “ecological civilization.” The industrial sector is one of the largest contributors to the country’s economy (40.5 percent of national GDP in 2017), 6 but also to the overall environmental pollution (approximately 70 percent of total environmental pollution in 2015).7 According to the Ministry of Ecology and Environment (MEE), industrial parks (IPs) 8 are the key source of industrial production and “all new industrial projects are required to be operated within industrial parks” (Zhang 2018). The growing concentration of industrial activities within IPs suggests that an increasing proportion of industrial pollution will be produced in IPs. Thus, promoting green development of IPs will be vital for the achievement of China’s and the world’s sustainable development goals.

Effective management of IPs toward green development requires a well-functioning regulatory framework to provide standards, requirements, guidelines, and robust monitoring and evaluation (M&E) frameworks. Although China does not have a specific IP management law, a comprehensive regulatory framework is in place, covering different legislative levels including (from top to bottom in terms of their importance) laws, regulations, national policies, and standards and indicators. This regulatory framework covers multiple aspects of IP management, including requirements concerning the economic and environmental performances of IPs.

Executive Summary

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However, higher-level regulations (law > regulation > policy > standards and indicators) tend to be less specific in managing and promoting the green development and transformation of IPs: they do not target IPs when it comes to managing industrial activities, most of which focus on either a broader scale (industrial sector) or a more micro scale (industrial firms and enterprises).

In comparison, several sets of standards are specifically targeting the green transformation and development of IPs. Three ministries—the Ministry of Ecology and Environment (MEE), the National Development and Reform Commission (NDRC), and the Ministry of Industry and Information Technology (MIIT)—have formu-lated three sets of standards and requirements for the assessment of eco-industrial parks (EIPs) (referred to in this report as the “China Green Triangle”). However, despite marked improvements in resource efficiency and environmental performances of EIPs (Table ES.1), the proportion of IPs certified under the three standards is still low, averaging less than 5 percent of the total number of Chinese IPs (Table ES.2). This seems to reflect an “elite model” for the certification of EIPs, suggesting that some potentially qualified IPs might be excluded from obtaining EIP certification because of quota limits.

Table ES1. Improvement in environmental performance of eco-/greenand circular economy demonstration pilot parks in China, 2011−15

Table ES2. Number and proportion of certified EIPs in China

Environmental performance indicators

Land use per unit of industrial added value

Energy consumption per unit of industrial added value

Fresh water use per unit of industrial added value

Industrial water reuse rate

Comprehensive utilization rate of industrial solid waste

Improvement

↓ by 30.1%

↓ by 32.7%

↓ by 33.6%

↑ to 90%

↑ to 94.1%

Source: World Bank, based on Shi et al. (2016).Note: eco/green and circular economy demonstration pilot parks are demonstration industrial parks approved by the relevant Chinese government ministries (MEE, MIIT and NDRC in this context) to promote resource efficiency, clean energy use, pollution control, and the circular use of resources within industrial parks.

Sources: World Bank calculations based on NDRC (2013, 2015a, 2016a, 2018); NDRC and MOF (2014, 2017a, 2018); MIIT (2017, 2018); MEE (2018); projections for 2020 from MIIT (2016d). Note: IPs = industrial parks; MEE = Ministry of Ecology and Environment; MIIT = Ministry of Industry and Information Technology; and NDRC = National Development and Reform Commission.

No. of certified IPs

Total no. of IPs

% of IPs certified

MEE-certified

93

2,543

3.7%

NDRC-certified

138

2,543

5.4%

MIIT-certified

46 (100 by 2020)

2,543

1.8% (3.9% by 2020)

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9 Circular economy refers to an economic model that encourages the circular use (reuse/recycle) of resources in economic activities to improve the resource efficiency of production and support the overall economic development.10 WBG, UNIDO, and GIZ (2017). See Appendix I for a presentation of the EIP Framework.

Comparisons between each set of the Chinese green standards show that the MEE and MIIT standards are highly consistent in terms of both categorization (economic development performance, resource use efficiency, environmental protection, energy utilization, and managerial capacity) and indicator design—21 out of 31 MIIT indicators and 19 out of 32 MEE indicators are identical or similar, suggesting a potential opportunity to merge the two standards. The NDRC standard is somewhat different in scope as it emphasizes the circular economy performance of IPs.9 Unlike the MIIT and MEE standards, which cover managerial, environmental, and economic performance of IPs, the NDRC indicators focus more on resource efficiency and pollutant emissions. They also measure the environmental performance of IPs differently. The different emphasis of the NDRC standard translates into a relatively lower consistency with the MEE and MIIT standards. Overall, multiple sets of EIP standards formulated by different government ministries might leave IPs ambiguous about which standards to comply with, potentially slowing the green development of IPs.

As a country with a large industrial sector, a leading role in combating global environmental challenges, and a strong ambition for green development, China is among the best positioned economies to take the lead in formulating effective EIP standards that would not only guide the green development and transformation of Chinese IPs, but also serve as a useful reference for the formulation of EIP standards by other countries. China’s standards were notably considered for the preparation of the global EIP standards recently adopted by the World Bank Group, United Nations Industrial Development Organization (UNIDO), and the German development agency, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), referred to as the “EIP Framework” in this report. 10 While this EIP Framework is a flexible tool with indicative requirements and targets meant to be adapted to local circumstances, it may serve as a useful reference for China to assess the quality of its EIP standards and consider opportunities to improve them.

This report conducts a comparative analysis between the Chinese green standards and the EIP Framework across all four dimensions—park management and economic, social, and environmental performance— to identify differences and share policy recommendations for further improvements of the Chinese standards. The main differences identified between the Chinese and the EIP Framework are the following:

Park management

“General vs. specific” requirements: The Chinese standards formulate more general requirements for park management, while the EIP Framework sets more specific requirements, including detailed description of prerequisites and performance indicators.

“Implicit vs. explicit” requirements: Many prerequisites included in the EIP Framework are not explicitly listed in the Chinese standards because they are usually compulsory (covered by other pieces of legislation or regulations) for any planned IP in China to be approved by local, provincial, or national authorities. Hence, the fact that Chinese green standards do not have certain provisions does not necessarily mean that the IPs are exempt from these requirements. In general, considering both implicit and explicit requirements regarding park management, the Chinese standards and the EIP Framework are largely in line with each other.

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Environmental performance

“Result-based” vs. “process-based” assessment: Differences in environmental performance requirements ensue from different approaches to green standards. The Chinese standards are result-oriented and focus more on the ultimate impact in terms of pollution reduction or resource efficiency. On the other hand, the EIP Frame-work complements outcome-based targets (such as the proportion of solid waste reused) with “process-based” indicators, focusing on the systems and processes established for pollution control and resource efficiency. The EIP Framework sets dual requirements on both the environmental performance and the process to achieve such results.

Social performance

“Implicit vs. explicit” requirements: Some EIP Framework requirements in the social performance section are not part of the Chinese standards, but they are usually included in additional Chinese legislation.

“Moral standards vs. legal requirements”: Differences in harassment-related and women-right-related requirements between the Chinese standards and the EIP Framework seem to result from different cultural norms on treating harassment prevention and women’s rights/welfare. In China, when harassment occurs, it is more often dealt with by using moral suasion instead of legal regulations. Other countries tend to rely on social norms and robust regulatory frameworks at the same time.

“Beyond regulatory consideration”: The EIP Framework has requirements on occupational health and safety (OH&S) management systems, community dialogue and community outreach. The Chinese standards do not specifically address these requirements.

Economic performance

“Economic standards vs. socioeconomic standards”: Chinese standards and the EIP Framework have different definition of IPs’ economic performances. The evaluation criteria used by the Chinese standards focus on the economic output of IPs, mainly GDP, while the EIP Framework emphasizes the socioeconomic effect of IPs on local economic development and well-being of the local population—as reflected in, for instance, indicators on local employment generation, and opportunities for development of small and medium enterprises (SMEs). The EIP Framework assesses the overall socioeconomic performance of IPs going beyond the park level, not only the newly created GDP.

The analysis shows that the differences between the Chinese and EIP standards are largely a result of different approaches to evaluation of IPs and are not necessarily indicative of inherent weaknesses in the Chinese regula-tory framework. The Chinese standards seem to be quite comprehensive and cover key requirements for the evaluation and promotion of EIPs. However, the comparison with the EIP Framework suggests that the Chinese standards could be further improved and move closer toward the EIP Framework.

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Lack of data: FHTZ has a department of statistics that collects data at the park level. The data measure key economic and environmental performance indicators such as industrial output, industrial added value, tax revenue, and energy consumption, in line with municipal and/or provincial requirements. However, data going beyond municipal or provincial requirements are usually not collected. As a result, FHTZ does not have data to assess its compliance with many EIP Framework requirements.

Incomplete infrastructure: Compliance with the environmental performance requirements of the EIP Frame-work usually requires additional investments in park infrastructure. In the case of FHTZ, to meet the EIP standards, it would have to invest in, for instance, internationally certified environmental/energy management systems, capacity to recover waste heat, and a greenhouse gas (GHG) monitoring system. The Chinese standards do not specifically address requirements on the availability of “green infrastructure” (except for wastewater treatment facilities, green buildings, and public buses in the MIIT and MEE standards) or focus on different type of green infrastructure. This indicates an area where the Chinese standards could be upgraded and move closer toward the EIP Framework.

Insufficient incentives: FHTZ and other Chinese IPs strive to meet the green requirements listed in provincial or national guidelines/regulations. However, local economic, regulatory, and technical conditions do not seem to provide sufficient incentives to go beyond the local standards and comply with some of the more demanding EIP Framework environmental and economic requirements (such as use of renewable energy, reduction of GHG emissions, and energy efficiency). In some cases, park management and tenant firms may not see benefits in adopting international standards, such as environment management systems (EMS) and energy management systems (EnMS) certified by the International Organization for Standardization (ISO), although the experience in China and abroad suggests these can bring benefits, including in terms of attracting foreign investment. This suggests a role for awareness raising and technical support to identify institutional reforms and investments that can yield environmental, economic and social benefits for the IP, its tenants, and surrounding communities.

All three Chinese green standard-makers (MEE, MIIT and NDRC) have a systematic incentive framework in place to promote compliance with the Chinese green standards, and the green transformation and development of Chinese IPs overall. The incentives include direct subsidies, preferential tax policies, and easier access to financing from financial institutions. Some nonfinancial incentives are also planned, such as including indica-tors on EIP certification in the assessment of IP’s business environment and competitiveness by local authori-ties and recognition through awards—although it is not clear how effective they have been so far. Most incen-tives are provided for both IPs and tenant firms.

Nevertheless, the incentive frameworks of the Chinese green standards could benefit from establishing a more explicit link between the provision of incentives for firms and whether a firm resides in an EIP. Currently,

China could also strengthen the incentives for IPs to meet EIP standards. The case study of the first application of the EIP Framework in China by the Fuzhou High-Tech Zone (FHTZ), Jiangxi Province, shows that Chinese IPs may face several challenges in moving toward EIP standards. The key challenges include:

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incentives for parks and firms are often separate. Except for one of the MIIT policies for promoting the estab-lishment of green IPs that specifically promotes projects proposed by green factories, green IPs, and green industrial chains, as well as resident firms within them, there is no link between getting access to financial support and residing in green-certified IPs. The Chinese authorities could consider offering additional incen-tives for EIP tenant firms to strengthen incentives for IPs to comply with green standards. In addition, IPs with, for instance, a larger percentage of green tenant firms, could also be prioritized in public support schemes, providing strong incentives for both IPs and tenant firms to seek green certifications.

Better access to finance could also motivate IPs and firms to become greener. As China continues to develop its green financial system, it is important to ensure that green finance is fully leveraged to support the develop-ment of EIPs. Among other general issues for the implementation of green finance, this will require (i) coordi-nation with the different EIP standards in place, as well as with industrial and other relevant policies, to ensure that the link between IPs’ environmental performance and access to green finance is strengthened; (ii) increased focus on data collection and the evaluation of the impacts of green finance initiatives; and (iii) capac-ity building for green finance at the local level (IIGF and UNEP 2017). Public fiscal incentives, while import-ant, will not be sufficient for the green development and transformation of Chinese IPs, and will increasingly have to be complemented by commercial and private capital. Green credit and green bonds are promising instruments to help achieve this. Likewise, the Ministry of Finance (MOF) and NDRC have developed a policy framework for green public-private partnerships (PPPs) (NDRC and MOF 2014), which have grown rapidly and could increase financing for green infrastructure in EIPs.

Overall, China has been a trailblazer by adopting several EIP standards in recent years and promoting them at a large scale. While voluntary, these standards have started to be adopted by a growing, although a still small number of Chinese IPs and can be a way for IPs to effectively reconcile economic, environmental, and social objectives. As various supporting schemes for IPs continue to be rolled out in the coming years, important implementation issues will have to be addressed, including the mainstreaming of EIPs and building of local capacity in all regions of the country; strengthening of verification and supervision mechanisms to ensure continuous compliance with the standards; data collection and the quantitative assessment of economic, environmental, and social benefits from EIP models; and development of appropriate business models to expand EIPs. The report concludes by sharing policy recommendations that the Chinese authorities could consider to further upgrade the green standards and promote green IPs. The recommendations include the need to:

‐ Introduce more ambitious targets to increase the number of EIPs.‐ Consider consolidating, updating (for example, by using a tiering certification system to foster competition and continuous improvement), and streamlining EIP standards.‐ Seek an optimal set of indicators to balance economic competitiveness and environmental protection.‐ Improve data collection and analysis systems to track park performance of IPs against domestic and international EIP standards and expand access to information‐ Strengthen enforcement of existing regulations‐ Consider adopting a specific Law on IP Management.‐ Leverage green finance for EIP development.

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Introduction

1.1 Project background and context

China has achieved remarkable success in economic growth and development in the past four decades, during which time it has increased its GDP per capita by more than 25 times. However, this strong performance has been accompanied with adverse environmental impacts, jeopardizing economic and social gains from growth. To move toward sustainable development and reduce the environmental impact of further economic growth, the Chinese government has started to prioritize green development and the building of an “ecological civiliza-tion.” 11 China’s 13th Five-Year Plan (2016−2020) has upgraded the building of this “ecological civilization” to the level of “national strategy”—a policy target of top priority. 12 During the 19th National Congress of the Communist Party of China in October 2017, President Xi Jinping emphasized that “energy conservation and environmental protection are fundamental national strategies” and “lucid waters and lush mountains are invalu-able assets.” President Xi also called for enhanced efforts to “continue the ‘Beautiful China’ initiative to create good working and living environments for our people and play our part in ensuring global ecological securi-ty.”13 Prime Minister Li Keqiang also noted that “the level of ecological civilization should be progressively upgraded to promote green development and achieve a co-development of economic prosperity and environ-mental protection.” 14

The greening of the Chinese industrial sector is a key factor that will determine the success of the “ecological civilization.” The industrial sector is one of the largest contributors to the country’s economy (40.5 percent of national GDP in 2017), 15 but also to overall pollution (approximately 70 percent of total environmental pollu-tion in 2015). 16 While some progress has been made to improve the sector’s resource efficiency and to reduce industrial pollution, there is still a large untapped potential for improvement.

Industrial parks (IPs) have played a particularly important role in industrial development in China. 17 According to the Ministry of Ecology and Environment (MEE), “IPs have become the ‘key vehicle’ for industrial develop-ment in China […] all new industrial projects are required to be operated within IPs” (Zhang 2018). In 2016, the economic output of all Chinese IPs amounted to 60 percent of the country’s GDP, and national IPs alone contributed 17 trillion RMB (23 percent of GDP) in the same year (Zhang 2018). The ongoing concentration of industrial activities within IPs suggests that an increasing proportion of industrial pollution is generated by IPs. Thus, guiding and managing IPs in line with green development principles will be vital for the achieve-ment of China’s and the world’s sustainable development goals.

There has been increasing pressure from the top over the last decade for improved environmental performance of industries. Despite significant efforts in this direction by many IPs, economic objectives often continue to be given priority over environmental and social ones. IPs have continued to face increasing environmental issues and resource access constraints. In some IPs, environmental systems infrastructure has lagged other invest-ment, leading to negative environmental impacts. It is estimated that IPs in over 80 percent of Chinese

11 Sheng Tai Wen Ming (生态文明) in Chinese.12 The State Council of the People’s Republic of China (2016a).13 President Xi Jinping (2017). 14 The State Council of the People’s Republic of China (2016a).15 National Bureau of Statistics of People’s Republic of China (2018). 16 China Environment News (2015). 17 See the definition of IPs provided in the executive summary (footnote 8).

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18 China Enterprise News (2017). 19 For example, in April 2018, three IPs (Yanweigang, Duigougang, and Chenjiagang) in Jiangsu Province were found to illegally emit wastewater to the nearby Guan River, causing serious environmental damage to both water and land. Ineffec-tive environmental management by the three IPs was the main reason for the pollution. On-site investigation showed that: (i) the water and air pollution level of many resident firms was over 50 times higher than the national standards; (ii) residents’ health was negatively affected: residents report a constant pungent smell from factories and a higher frequency of illness; (iii) the fishing industry was badly hit: before the pollution, approximately 500kg of fish, shrimp, and shellfish could be gathered within an hour; while after the pollution, 6 hours of fishing could gather less than 10kg of small fish; (iv) surrounding agricultural land polluted by industrial wastewater is no longer able to be cultivated or fertilized (CCTV 2018). 20 For overviews of EIP development, see notably UNIDO (2016, 2017); WBG, UNIDO, and GIZ (2017); Chertow and Park (2016); and Shenoy (2016).21 ISO 14001 is an international standard developed by the International Organization for Standardization for certification of environmental management systems (EMS). The standard aims to help companies and organizations enhance their environmental performance and improve ecological sustainability. More information on: https://www.iso.org/stan-dard/60857.html 22 See, for instance, Geng and Côté (2003); Geng et al. (2009); Shi et al. (2010); Zhang et al. (2010) ; Bai et al. (2014); Shi and Yu (2014); Liu and Bi (2015); Wang, Lei, and Bi (2015), Wang, Deutz, and Gibbs (2015), Yu, Han, and Cui (2015); Yu, Lu, and Wang (2018); Yang et al. (2018). 23 See Taddeao (2016) for Italy and Massard, Leuenberger, and Dong (2018) for Vietnam.24 Specifically, Tian et al. (2014) find that “(1) industrial added value of the 17 eco-industrial parks as a whole increased by 56%; (2) for comprehensive energy consumption, fresh water consumption, industrial wastewater generation, and solid waste production, the 17 eco-industrial parks had an overall increase of 20%, 18%, 12%, and 6%, respectively. The quantity of energy and fresh water consumption, wastewater and solid waste generation in some eco-industrial parks started to decrease with economic growth. Meanwhile, the average intensity of the four metrics decreased by 22%, 25%, 28%, and 32%, respectively; (3) for chemical oxygen demand and sulfur dioxide, the eco-industrial parks accomplished a two-fold decrease in both total quantity of emissions and intensity. Chemical oxygen demand emissions and its intensity decreased by 25% and 52%, respectively. Sulfur dioxide emissions and its intensity decreased by 51% and 69%, respectively.”

provinces have environmental problems, which include illegal production, excessive pollutant emissions, and ineffective environmental monitoring— making industrial zones “pollution-concentrated zones.” 18 In some cases, lax environmental protection has led to serious environmental pollution. 19 This has become a major barrier for China to proceed with environmental rehabilitation (Zhang 2018).

China is not the only country in which the concentration of industrial activity in dedicated zones has led to rising environmental challenges. An increasing interest among academics and policy makers for eco-industrial parks (EIPs) has been observed globally over the last two decades, in high-, medium- and low-income coun-tries alike. 20 An EIP can broadly be defined as “a dedicated area for industrial use at a suitable site that ensures sustainability through the integration of social, economic, and environmental quality aspects into its siting, planning, management and operations” (WBG, UNIDO, and GIZ 2017). EIPs can seek to reduce their environ-mental impacts by (i) investing in common pollution and waste management facilities; (ii) promoting invest-ments in resource efficiency and cleaner production (RECP) by each tenant company; (iii) fostering exchanges of waste material, water, and energy between tenants (“industrial symbiosis”), as well as with surrounding urban areas; (iv) promoting circularity (such as remanufacturing, reuse, and/or recycling); (v) adopting green building and other environmental standards (such as ISO 1400121 ); (vi) increasing access to renewable energy sources; and (vii) ensuring strategic recruitment of tenants and increasing green cover in the estate. While many IPs around the world have claimed the “eco” label, there are still few actual EIPs in operation, especially in developing and emerging economies (UNIDO 2016). Good examples of IPs that have reaped economic, environmental and social gains from shifting to EIP models can nonetheless be found in several countries, such as China, Denmark, and the Republic of Korea (Box 1.1). China has been one of the pioneers in implementing the EIP concept, and one of the main subjects of the literature on the topic. 22 It is one of the few countries, along with Italy and Vietnam, that has sought to introduce standards to define EIP requirements and monitor their performance. 23 There is emerging evidence that Chinese EIPs have recorded a strong improvement in economic and environmental performance: according to one study by Tian et al. (2014), 17 Chinese EIPs analyzed in the study have increased value added by 56 percent over the studied period, while solid waste production increased by only 6 percent. 24

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Box 1.1 Leading international EIP examples

Tianjin (China): Tianjin Economic-Technological Development Area (TEDA), located 130 kilome-ters southeast of Beijing, is a leading industrial area in China and hosts thousands of foreign and domestic companies, mainly in the electronics, automobile & machinery, biotechnology & pharma-ceutical, and food & beverage industries.

It was the first national economic-technological development area to create an independent environ-mental regulatory body in 1990 and a tenant environment protection association in 1996. Since then, it has continuously upgraded its environmental management capacity ( through, for example, environ-mental impact assessments of new investment projects, and environmental monitoring of existing key water and air pollution sources, pollution discharge levies). TEDA obtained ISO 14001 certification in 2000, in parallel with several tenant companies, and was nominated as a national demonstration zone for ISO 14001 the same year. In the early 2000s, TEDA formulated an EIP development plan, and was subsequently recognized as a national demonstration EIP and pilot circular economy zone. In addition to regulatory requirements and resource scarcity, one of TEDA management’s main motiva-tions to transition to an EIP model was fierce competition for foreign investment from other leading IPs in China.

Over the years, TEDA and its tenant companies have developed a complex system of public infrastructure and symbiotic exchanges between companies to recover materials and improve the management of energy, wastewater, and solid waste. Economic and environmental benefits have been considerable.

Ulsan (Korea): The city of Ulsan, located in the southeastern part of Korea, is the country’s industrial capital. The metropolitan area includes two national industrial complexes (Ulsan-Mipo and Onsan), as well as several regional ones, which include over 1,000 firms in diverse heavy industries, including vehicle manufacturing, shipbuilding, oil refineries, machinery, nonferrous metals, fertilizer, and chemical industries.

Rapid industrial development between the 1960s and 1980s resulted in serious air and water pollution issues, with dire economic, environmental, and social impacts. This led the Korean government to impose stricter environmental quality standards in Ulsan industrial complexes from the late 1980s, pushing resident firms to invest in pollution management and prevention, and to promote resource efficiency and cleaner production from the 1990s onward. Ulsan was one of the main pilot sites of the national EIP program launched in 2003, which focused on the development of industrial symbiosis. This built on synergies previously established by industrial firms in Ulsan, including shared utilities and exchanges of by-products. The Ulsan Regional EIP Center, led by an advisory board with repre-sentatives from the local government, industry, and academia, was established to collect data, identify potential industrial symbiosis projects, coordinate with the national level for the provision of technical

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and financial support to individual projects, and monitor economic, social, and environmental impacts.

Under the program, 77 projects were funded for research and development and 34 for operations. Investments amounted to US$14.8 in project research and development from the government and US$245.8 million from industries. Overall, the projects supported have led to US$65 million in new business income from the sale of waste and by-products and US$78 million in energy and material costs savings each year. Between 2005 and 2016, they also saved 279,761 tons of oil equivalent in energy use through a reduction of 665,712 tons of CO2 emissions and 4,052 tons of air pollutants, such as SOx and NOx); a decrease of 79,357 tons of water; and the reuse of 40,044 tons of by-products and waste (GGGI 2017).

Kalundborg (Denmark): Kalundborg is among the world’s best-known example of EIP and has been the object of numerous studies over the last three decades.

Rather than a government-planned estate, it is a business-led industrial symbiosis and utility-sharing network, which has been progressively established since the 1960s. The system is currently made up of 25 different exchanges of water, energy/heat, and materials, with flows emanating from six differ-ent industrial firms and three public organizations with 5,000 employees. Since 2011, this partnership has been formalized as a private association, Kalundborg Symbiosis (http://www.symbiosis.dk/en/), which manages matters involving all partners and explores opportunities for further collaboration.

A life-cycle assessment based on data for 2015 and comparing production with and without the current industrial symbiosis network showed that it generated annual financial savings of over €24 million for all the partners involved, and reduced GHG emissions by 635,000 tonnes of CO2 equiva-lent.

Source: Park and Won (2007); GGGI (2017); Shi, Chertow, and Song (2010); https://www.ellenmacarthurfoun-dation.org/case-studies/effective-industrial-symbiosis, Kechichian and Mi Hoon Jeong. 2016.

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‐ Briefly discusses the history and development of IPs in China ‐ Evaluates the effectiveness of the Chinese regulatory framework of IP management and EIP promotion at all

legislative levels (laws, national regulations, national policies, standards & indicators)‐ Identifies the similarities and differences among the Chinese EIP standards and evaluates their effectiveness

in guiding and promoting the green transformation of IPs, as well as room for further improvement‐ Conducts a comparative analysis between the Chinese standards and the EIP Framework ‐ Identifies challenges for Chinese IPs to comply with the EIP Framework through a case study of Fuzhou

High-tech Zone (FHTZ), Jiangxi Province‐ Assesses the current incentive structure for Chinese IPs to undertake a green transition‐ Evaluates the development of green finance for EIP development and promotion and identifies opportunities

for establishing a more effective green finance system‐ Provides policy recommendations for the Chinese standards to guide the green development and transforma-

tion of Chinese IPs, but also serve as a model for the formulation of future international EIP standards.

1.2 Scope of the report

To help China achieve a greener development, this report aims at assessing the adequacy of the existing Chinese regulatory framework in promoting the green transition of IPs, including the different EIP standards in force, and at identifying obstacles and opportunities for this transition. Specifically, this report:

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2.1 From industrial parks to eco-industrial parks

In the past 40 years of Chinese economic development, IPs have been playing a key role as “policy pioneers.” China started developing various forms of IPs in the 1980s as part of the country’s economic reform program. Since then, IPs have been a major force in the development and concentration of Chinese industries, notably enabled by strong political commitment at the highest level, proactive support from different levels of govern-ments, institutional autonomy for zones, experimentation with new policies and institutions, and adoption of clear targets and competition between zones (Zeng 2011). By the end of 2017, China had a total of 2,543 IPs, including 552 national IPs and 1,991 provincial ones.

Over time, the increasing concentration of industries and a booming number of IPs have created increasing pressure on land and resources, with chaotic infrastructure construction and growing pollution. In parallel with renewed efforts over the last two decades to enforce environmental regulations and to ensure industry compli-ance, this led the Chinese government to take a series of actions to encourage a more rational development of IPs in the 2000s. During this period, EIPs received increasing attention and gradually became a mainstream model for IP development.

MEE (then the State Environment Protection Administration—SEPA) initiated the EIP Demonstration Program in the early 2000s to minimize pollution and waste generation in existing IPs and was later joined by the Ministry of Science and Technology (MOST) and the Ministry of Commerce (MOC). Some sector-specific IPs—such as chemical parks in the Yangtze Delta Area and sugar-making parks in the Zhujiang Delta Area—adopted measures early on to balance economic growth and environmental sustainability. After 2004, several leading parks joined the EIP pilot project, including the Tianjin and Fuzhou Economic-Technological Development Areas (TEDA/FEDA) and Suzhou IP. The pace of certification under the EIP Demonstration Program increased after 2010 (Thieriot and Sawyer 2015).

Other initiatives to green IPs were adopted in parallel. This includes the Circular Economy Pilot Zones program initiated in 2001 by the Ministry of Environment Protection (MEP) (now MEE) and taken over in 2005 by the National Development and Reform Commission (NDRC), which since 2012 has jointly led it with the Ministry of Finance (MOF) as the Circular Transformation Industrial Parks program. In addition, the Low-Carbon IP Pilot Program was launched in 2013 by the Ministry of Industry and Information Technology (MIIT) jointly with the NDRC.25 The general managerial and operational structure of Chinese EIPs at the current stage is presented in Figure 2.1.

25 See Thieriot and Sawyer (2015) for an earlier presentation of the three programs, their governance structure, and certifica-tion procedures. The rest of the report uses the term “EIP” to refer in general to the different programs in place.

Green Industrial Parks in China: History, Development, and Regulatory Framework

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2.2 Regulatory framework of IP management and EIP promotion in China

Effective management of IPs toward green development and transformation requires a well-functioning regula-tory framework. The current regulatory framework for IP management in China has the following key charac-teristics:26

26 See Appendix A for details on relevant provisions of each law, regulation, policy and standard analyzed.

Figure 2.1 General managerial and operational structure of Chinese EIPs

Source: World Bank.Note: MEE = Ministry of Ecology and Environment; MIIT = Ministry of Industry and Information Technology; MOC = Ministry of Commerce; MOF = Ministry of Finance; MOST = Ministry of Science and Technology; NDRC = National Development and Reform Commission.

‐ Contrary to some countries, such as Turkey, China does not have a specific law on IP management. However, a comprehensive regulatory framework is in place, which covers different legislative levels, including (from top to bottom) laws, regulations, national policies, and standards & indicators.

‐ The regulatory framework covers multiple aspects of IP management, including requirements on IPs’ economic and environmental performance, which are generally consistent with the principle of sustainable development.

‐ Complementary policy instruments are used in the regulatory framework, including command and control, economic/financial incentives, moral suasion, and supporting policy.

‐ IPs at different levels (such as national, provincial, municipal, county) face regulations of different stringency.

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NDRCMIITMEEMOST MOC MOF Others

Eco-industrial parks

Industrial park management committee

Green industrial parks Circular economy upgrade demonstration parks

Firm-related projects

Infrastructure-related projects

Provincial governments (provincial demonstration pilots)

Com

pany

Industrial park promotion institutionsExternal supportive

institutions

Central government (national demonstration pilots)

Financial institutions

Capacity building projects

Infrastructure

External verification institutions

Public

National laws

Five comprehensive national-level laws are directly relevant for the environmental impact and greening of industrial activities. However, most provisions focus on managing and regulating industrial activities in gener-al, targeting industrial projects and firms, rather than IPs specifically.

In addition, five specific laws include articles that are related to IP management. They focus on the firm level rather than the park level. Compared with the comprehensive laws discussed previously, these laws deal with specific aspects, such as waste management, renewable energy, and energy saving. The specific laws include:

27 中华人民共和国环境保护法 (NPC 2015). 28 中华人民共和国环境影响评价法 (NPC 2016c).29 中华人民共和国清洁生产促进法 (NPC 2012). 30 中华人民共和国循环经济促进法 (NPC 2009a). 31 中华人民共和国环境保护税法 (NPC 2018).32 中华人民共和国水污染防治法 (NPC 2017). 33 中华人民共和国大气污染防治法 (NPC 2016a). 34 中华人民共和国固体废物污染环境防治法 (NPC 2016d). 35 中华人民共和国可再生能源法 (NPC 2009b). 36 中华人民共和国节约能源法 (NPC 2016b)

‐ Environmental Protection Law: 27 6 out of 70 articles in this law are related to IP management. Industrial firms and enterprises are obliged to perform due diligence in reducing environmental pollution, prioritizing the use of clean and renewable energy, applying less-polluting technologies in production, and installing pollution control facilities. However, the 6 articles do not directly target IPs, but instead focus on industrial activities in general.

‐ Environmental Impact Assessment Law:28 3 out of 37 articles in this law are related to IP management, focus-ing on specific environmental impact assessment (EIA) requirements procedures for industrial projects. The law targets all industrial projects rather than IPs specifically.

‐ Cleaner Production Promotion Law: 29 4 out of 42 articles in this law are related to IP management, including the compulsory requirement for all industrial projects to conduct an environmental impact assessment (EIA) before construction or production, prioritizing the use of resource-efficient and low-waste technologies, recycling and reusing wastes when economically and technically feasible, and monitoring resource use and waste generation during production. Like the Environmental Protection Law and the Environmental Impact Assessment Law, IPs are not specifically targeted.

‐ Circular Economy Promotion Law: 30 2 out of 58 articles in this law are related to IP management. They share similar ideas with the “3R principle” (Reduce, Reuse, Recycle), requiring efficient and circular utilization of resources, including waste, energy, land and water. Article IV-29 specifically regulates and encourages IPs to organize firms within the parks to fulfill the principle of circular economy.

‐ Environmental Protection Tax Law: 31 2 out of 28 articles in this law are related to IP management. The Law sets the “threshold emission level” for different pollutants, above which emitting firms must pay the environ-mental protection tax.

‐ Water Pollution Prevention and Control Law: 32 4 relevant articles out of 103.‐ Air Pollution Prevention and Control Law:33 3 relevant articles out of 129.‐ Law on the Prevention and Control of Environmental Pollution by Solid Waste: 34 3 relevant articles out of 91.‐ Renewable Energy Law:35 1 relevant articles out of 33.‐ Energy Conservation Law:36 2 relevant articles out of 87.

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National regulations

Three major national regulations include articles relevant to IP management. These regulations set targets on a broader scale (industrial sector level) and formulate regulations on a more micro level (firm level), but do not specifically address the IP level.

National policies

At the policy level, more sections and paragraphs specifically deal with IP management.

37 大气污染防治十条措施 (The State Council of the People's Republic of China 2013).38 水污染防治行动计划 (The State Council of the People's Republic of China 2015a).39 土壤污染防治行动计划 (The State Council of the People's Republic of China 2016b). 40 生态文明体制改革总体方案 (The State Council of the People's Republic of China 2015c).41 国务院关于印发〈中国制造2025〉的通知 (The State Council of the People's Republic of China 2015b). 42 中华人民共和国国民经济和社会发展第十三个五年规划纲要 (NDRC 2016b). 43 循环发展引领行动 (NDRC 2017).44 关于加强国家生态工业示范园区建设的指导意见 (MEE, MOC, and MOST 2011). 45 国家生态工业示范园区管理办法 (MEE, MOC, and MOST 2015).46 工业绿色发展规划（2016−2020）(MIIT 2016c).

‐ Ten Measures of Air Pollution Prevention and Control: 37 3 relevant articles out of 10.‐ Action Plan for Water Pollution Prevention and Control: 38 3 relevant articles out of 35. Article I-1 specifical-

ly focuses on industrial zones (enhancing water pollution management, wastewater treatment facilities, and real-time monitoring system for wastewater emissions at the park-level).

‐ Action Plan for Soil Pollution Prevention and Control:39 1 relevant article out of 35.

‐ General Guidelines on the Institutional Reform of Ecological Civilization: 40 This document outlines the requirements, principles, and objectives of building an “ecological civilization” and promoting green devel-opment. Among the key requirements are supporting green, circular, and low-carbon development and balancing economic development and environmental protection. Establishing an effective green finance system is also emphasized.

‐ Notice by the State Council on the “Made in China 2025” Project: 41 This policy proposes to pursue “green manufacturing,” with the establishment of 100 “green demonstration IPs” by 2020 as a key objective.

‐ The 13th Five-Year Plan on the Economic and Social Development of the People’s Republic of China:42 Article 43-5 includes the promotion of circular economy modification within IPs and industrial symbiosis between firms within parks.

‐ Action Plan for Leading Circular Economy Development:43 Three articles offer roadmaps and quantitative targets for “circular economy upgrade for industrial parks.”

‐ Guiding Notice on Strengthening the Development of National Eco-Industrial Parks: 44 This is a general guideline that targets the development of EIPs in China and points out the general requirements, key objec-tives, and supporting policies (such as financial incentives and capacity building) for establishing national EIPs.

‐ Guidelines on the Management of National Eco-Industrial Parks:45 This provides detailed requirements and procedures of the application, construction/establishment, approval, performance verification, and manage-ment of national EIPs.

‐ Plan for Industrial Green Development (2016−2020):46 This Plan outlines the blueprint for the green devel-opment of China’s industrial sector during the 13th Five- Year period. The establishment of a green manufac-turing system is among the ten key objectives, including the construction of green IPs. The Plan proposes to establish 100 representative and high-level demonstration green IPs by 2020.

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2.3 The “Green Triangle” of Chinese EIP standards

In 2006, China was the first country to adopt national standards to assess the performance of EIPs (Geng et al. 2009). Since then, three separate EIP standards have been formulated: namely, National Demonstration Eco-In-dustrial Parks; Industrial Parks for Circular Economy Transformation; and Green Industrial Parks. The devel-opment of several parallel initiatives has political roots. Different agencies took the lead on each of them—MEE, NDRC, and MIIT, respectively. Accordingly, the different standards have a slightly different focus according to their own agenda.

The development of the three standards can be better understood from a historical perspective. The first standard was developed by MEE (then called the State Environmental Protection Administration) in 2000, to promote the idea of industrial ecology in China. Thus, the focus is on environmental protection and resource saving. The second standard was developed by NDRC in 2012, to implement China’s Circular Economy Promotion Law passed in 2008 and the Twelfth Five-Year Plan formulated in 2011. Thus, the focus is on circu-lar economy transformation. The third standard was developed by MIIT in 2016, when MIIT wanted to develop a holistic green manufacturing system under the framework of China Manufacture 2025 unveiled in 2015. Thus, in addition to green industrial parks, MIIT is also promoting green factories, green design products, and green supply chain management demonstration firms.

MEE Standard: Standard for National Demonstration Eco-Industrial Parks 51

The latest version of the MEE standard was adopted in January 2016 and builds the MEE’s EIP demonstration program. The MEE standard contains 32 indicators, categorized into 5 groups: economic development (4); industrial symbiosis (3); resource saving (9); environmental protection (13); and information disclosure (3). For an IP to be considered a national demonstration EIP, the park is required to meet the requirements of 17 compulsory indicators and a minimum of 6 optional indicators. Requirements on environmental protection and resource saving are the key focus of the MEE standard, including 13 and 9 indicators, respectively. For environmental protection indicators especially, 12 out of 13 are compulsory, covering requirements of

Standards and Indicators

Four different Chinese ministries have formulated relevant evaluation frameworks, focusing on upgrading of ordinary IPs into (i) green industrial parks, (ii) EIPs, and (iii) IPs in line with the circular economy principle. Standards and indicators are specifically designed to manage and guide the green development of Chinese IPs. Three of them (referred to here as the “Green Triangle”) are analyzed in more detail in the next section.

47 国家生态工业示范园区标准（HJ 274-2015）(MEE 2016).48 关于开展绿色制造体系建设的通知 (MIIT 2016b).49 关于请组织推荐2017年国家园区循环化改造重点支持备选园区的通知 (NDRC and MOF 2017b).50 工业园区循环经济评价规范（GB/T 33567-2017） (CNIS 2017).51 国家生态工业示范园区标准（HJ274-2015）(MEE 2016). See details on requirements and indicators in Appendix B.

‐ Standard for National Demonstration Eco-Industrial Parks 47

‐ Notice on the Establishment of a Green Manufacturing System48 ‐ Notice on Recommending Key Candidate Industrial Parks for Circular Economy Transformation in 2017 49

‐ Specification for Circular Economy Performance Evaluation of IPs 50

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52 Green coverage refers to the area covered by green plants, such as trees, grass, flowers, etc. It is one of the indicators used to monitor industrial parks’ environmental performance.53 关于请组织推荐2017年国家园区循环化改造重点支持备选园区的通知. See details on requirements and indicators in Appendix C.54 关于开展2017年国家园区循环化改造示范试点、“城市矿产”示范基地终期验收和资金清算的通知 (NDRC and MOF 2017c).55 These indicators are left blank for each IPs to fill in if an IP believes that it is becoming more “green” or “circular” in areas going beyond specific requirement of the standard.56 绿色园区评价标准, 关于开展绿色制造体系建设的通知. See details on requirements and indicators in Appendix D.

pollution emission levels, soundness of environmental management and risk control systems, wastewater and solid waste generation per unit of industrial output, reuse and safe disposal of various kinds of wastes, and the green coverage rate. 52 Detailed description and calculating methods of each indicator are provided as well.

NDRC Standard: Notice on Recommending Key Candidate Industrial Parks for Circular Economy Trans-formation in 2017 53

The Notice provides a guideline for the application, evaluation, and selection of demonstration IPs for circular economy transformation. It specifies 11 basic requirements/qualifications for an IP to be able to apply for becoming a “circular economy” demonstration park, and provides template indicators that measure the perfor-mance of IPs.

In addition, the Notice on the End-of-term Evaluation and Capital Settlement of the National Demonstration Industrial Parks of Circular Economy Upgrade and Urban Mining Demonstration Pilots (2017)54 extends the template indicators and offers a more comprehensive set of indicators that evaluate the “circular economy performance” of IPs. The combination of basic requirements/qualifications and indicators from these two documents is referred to in this report as the “NDRC standard.”

The NDRC standard includes 31 indicators in total, categorized into 8 groups: resource productivity (5); resource consumption (5); comprehensive utilization of resources (5); pollutant emissions (8); other indicators (3); “characteristic indicators” ;55 projects subsidized by central government finance (3); and self-implemented projects (2). The NDRC standard emphasizes the circular economy performance of IPs, leading to a focus on resource productivity, efficiency, and pollutant emissions. Given this specific focus, economic, social, and managerial performances receive less emphasis than the MEE standard. The NDRC standard also does not set target values for indicators. Instead, it provides an information sheet for IPs’ self-assessment against their previous performance and estimated future progress. Rather than providing a general and comprehensive evaluation framework for IPs’ performance, the NDRC standard focuses on assessing and promoting circulari-ty.

MIIT Standard: Requirement for the Evaluation of Green Industrial Parks, under the Notice on the Estab-lishment of a Green Manufacturing System 56

There are 31 indicators and 8 basic requirements within the MIIT standard. The indicators are divided into 6 categories: energy utilization (3); resource utilization (8); infrastructure (5); industry (4); ecology and environ-ment (8); and management (3). Similar to the MEE standard (with its categories of “resource saving” and “environmental protection”), “resource utilization” and “ecology and environment” indicators are the most numerous, consisting of over half (16/31) of all the indicators of the MIIT Standard. A balance is nonetheless achieved among different categories: managerial, environmental, and economic performance are all assessed through a number of indicators, although social performance indicators are not specifically included. For an IP to qualify as a MIIT-certified green IP, the park needs to meet 17 compulsory requirements and at least 6 optional requirements. In addition, all the 8 basic requirements must be met. A formula calculating

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the “green index” of IPs is given based on their performance on the 31 indicators (see Appendix D). This score is an important reference for the assessment and selection of candidate MIIT-certified national green IPs.Monitoring and evaluation (M&E) is a critical element of enforcing EIP standards. China has so far developed a relatively comprehensive framework (Box 2.1).

Box 2.1 China’s regulatory frameworks on monitoringand evaluation of EIP standards

Both MEE and NDRC have relatively comprehensive M&E frameworks to supervise the performance and promote the continual improvement of IPs. Since MIIT just developed its standards in 2016, it has not formulated a regulatory framework on M&E yet.

MEE formulated its first M&E regulatory framework in 2005 and revised it in 2015. The process consists of two parts—self-assessment by industrial parks every year and review by MEE every three years. Specifically, every year, each national demonstration eco-industrial park conducts a self-as-sessment on its performance on eco-industrial development, writes a self-assessment report, and sends the report to MEE for examination and record-keeping. Every three years, MEE makes a spot check of a number of parks. If any park does not pass the check, it will be required to rectify within a prescribed time limit. If it fails again after rectification, it will be removed from MEE’s list. In addition, MEE pushes hard on information-sharing to enhance public participation and supervision.NDRC, along with Ministry of Finance, issued its framework to enforce the implementation of the circular economy transformation plan of IPs in 2015. The process also consists of two parts—mid-term evaluation and end-of-term acceptance test. The mid-term evaluation applies to IPs whose transformation plan was approved more than three years but fewer than five years ago. The parks first undertake a self-assessment and send the reports to provincial agencies. Provincial agencies then conduct on-site evaluations and send the results to NDRC and the Ministry of Finance. Finally, NDRC and the Ministry of Finance entrust a third party to verify the self-assessment reports. If any park does not pass the evaluation, it will be removed from NDRC’s list and return the funding from the central government’s budget.

The end-of-term acceptance test applies to IPs whose circular economy transformation plan was approved more than five years ago. Again, the parks first undertake a self-assessment and apply to NDRC and Ministry of Finance for end-of-term acceptance test through provincial agencies. NDRC and Ministry of Finance will then entrust a third party to make an on-site evaluation. If any park does not pass the test, it could be given up to one year to make adjustments. But if it fails again, it will be removed from NDRC’s list and return 50 percent of the funding from the central government’s budget.

Sources: MEE, MOC, and MOST (2015); NRDC and MOF (2015)

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57 See MEE, MOC, and MOST (2015).58 NDRC and MOF (2017b).

Different emphasis on IP performance assessment: The MEE standard evaluates the performance of IPs from the angle of ecological and environmental protection, with an emphasis on pollution control and environmental quality. The NDRC standard focuses on the circular use of resources and its efficiency, following the method of life-cycle assessment of resource utilization. The MIIT standard covers the most dimensions and attempts to evaluate the development and performance of IPs from an integrative and multi-dimensional “resource-envi-ronment-economy-society” angle. This reflects the different administrative functions of the three government ministries that issued each standard. In general, the indicators in all the three sets of standards serve their respective regulatory functions well. However, room for further improvement exists: for instance, social performance requirements are not addressed in all three standards.

Different evaluation methods: The MEE and MIIT standards both set target values or threshold values for each indicator. However, in the NDRC standard, IPs self-assess their performance on each indicator and provide an estimated value for a certain year in the future. Differences also exist between the MEE and MIIT standards. The latter calculates a score (green index) using a formula based on IPs’ performance on the indicators. This score, rather than the performance on certain indicators, determines whether or not an IP qualifies as a green IP. In other words, failure to reach the target value of certain standards does not necessarily mean a failure to become a MIIT-certified green IP. The MEE standard, on the other hand, requires IPs to reach the target values of all necessary indicators before being considered MEE-certified EIPs.

Different evaluation procedures: IPs that want to apply for the MEE certification of EIP need to first draft an “EIP development plan” according to the Guideline on Drafting EIP Development Plan (MEE 2007) and submit it to provincial authorities of environmental protection, commerce, and science & technology. If agreed by the three provincial authorities, the application will be passed on for approval to the EIP construction leader-ship group led by MEE, MOFCOM, and MOST. 57 Meanwhile, the MIIT and NDRC standards adopt an assess-ment framework of “provincial recommendation–national evaluation”: provinces evaluate and recommend IPs to relevant national ministries and the latter make the final evaluation and selection. The NDRC standard requires interested IPs to first draft an Implementation Plan for Circular Economy Transformation following the instructions of Guideline for IPs on Drafting Implementation Plan for Circular Economy Transformation. 58 Provincial departments of circular economy development management and finance organize experts to assess the implementation plans, select IPs with the best foundation, the greatest potential for circular economy trans-formation, and the best implementation plan, and recommend these IPs to NDRC and the Ministry of Finance. NDRC and MOF then organize experts to evaluate the implementation plans of the recommended IPs

2.4 Evaluation of the Chinese EIP standards

Comparison of different Chinese EIP standards

An examination of the three EIP standards indicates three major differences among them:

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and decide which parks to certify (NRDC and MOF 2017b). The MIIT standard requires interested IPs to self-assess their performance against the standard and invite third-party “evaluation institutions” (selected and authorized by MIIT) to conduct on-site park performance assessments. Eligible IPs can apply to the relevant department at the provincial level. Provincial departments then assess and check the applications (focusing on IPs’ performance against the MIIT standard indicators and on the assessment report by the third party), and recommend the most qualified IPs to MIIT. MIIT then organizes experts to further evaluate the recommended IPs through discussions, public announcements, and spot-checks before confirming the IPs to be certified (MIIT 2016b).

In general, the assessment and selection process of green-certified IPs for all three standards allows only a limited number of IPs to compete for relevant green certification. For instance, the NDRC standard each year allows only two candidate IPs from each province in the Beijing-Tianjin-Hebei region and the Yangtze River Economic Belt, and one candidate IP in each of the other provinces to be recommended from provincial level to national level as candidates for NDRC-certified circular economy demonstration IPs (NDRC and MOF 2017b). MEE and MIIT standards are similarly restrictive, even though many IPs could be qualified to comply with the green standards.

The environmental impact of green-certified IPs in China

By the end of June 2018, there were 93 MEE-certified, 138 NDRC-certified, and 46 MIIT-certified IPs in China. With a total of 2,543 national- and provincial-level IPs nationwide, the proportion of green-certified parks is still relatively small (Table 2.1).

Table 2.1 Number and proportion of “green-certified” IPs in China

Sources: World Bank calculations based on NDRC (2018); MIIT (2017, 2018); and MEE (2018); and projections for 2020 from MIIT (2017).Note: The number of NDRC-certified “circular economy demonstration” IPs is calculated based on the annual announce-ments (2012−2018) by the NDRC on the list of certified parks [NDRC and MOF (2014, 2017a, 2018); NDRC (2013, 2015a, 2016a)]. EIPs = eco-industrial parks; IPs = industrial parks; MEE = Ministry of Ecology and Environment; MIIT = Ministry of Industry and Information Technology.

Number of certified IPs

Percent of IPs certified

EIPs (MEE)

93

3.7%

138

5.4%

46(100 in 2020)

Circular economy demonstration parks

(NDRC)Green IPs (MIIT)

1.8%(3.9% in 2020)

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The evidence suggests that Chinese EIP standards have generally been effective in fostering the greening of IPs. Table 2.2 shows a substantial improvement in the environmental performance of green-certified IPs in China between 2011 and 2015. For instance, the average energy consumption per unit of industrial added value among the certified parks has declined by almost one-third, providing evidence of a successful decoupling of growth in industrial output and its environmental impact (Shi et al. 2016).

Table 2.2 Environmental performance improvement of EIPs and circular economy demonstration pilot parks in China, 2011-15

Figure 2.2 Number of “green-certified” IPs in China regulated by MEE, MIIT, and NRDC

Sources: World Bank calculations based on NDRC (2018); MIIT (2017, 2018); and MEE (2018); projections for 2020 from MIIT (2017). Note: The number of NDRC-certified “circular economy demonstration” IPs is calculated based on the annual announce-ments (2012−18) by the NDRC on the list of certified parks [NDRC and MOF (2014, 2017a, 2018); NDRC (2013, 2015a, 2016a)]. One IP (Tianjin Economic-Technological Development Area) holds all three of the certifications, while 8 hold two certifications from MEE and MITT, 11 from MIIT and NDRC, and 14 from MEE and NDRC. The remaining 208 IPs hold one certification from either of the three agencies.

Source: World Bank based on Shi et al. (2016).

70MEE 26

MIIT

NDRC112

8

11411

Environmental performance indicator

Land use per unit of industrial added value

Energy consumption per unit of industrial added value

Fresh water use per unit of industrial added value

Industrial water reuse rate

Comprehensive utilization rate of industrial solid waste

Improvement

↓ by 30.1%

↓ by 32.7%

↓ by 33.6%

↑ to 90%

↑ to 94.1%

22

Comparison of indicators in each Chinese green standard

An indicator-by-indicator comparison between the MEE and MIIT standards show that they all have much in common. 59 The two standards share considerable similarities in categorization and design of indicators (Figure 2.3). Both standards categorize indicators into identical groups, including economic development, resource efficiency, environmental protection, energy utilization, and managerial capacity—although under different titles (such as “economic development” in the MEE standard versus “industry green index” in the MIIT standard). Moreover, as many as 21 out of 31 MIIT indicators and 19 out of 32 MEE indicators are identical to or have similar requirements with the other. The main distinction lies in the indicators relevant to infrastructural requirements and specific environmental protection requirements. The infrastructure section in the MIIT standard sets requirements on green buildings and public transport, while the MEE standard does not. In terms of environmental protection, the MEE indicators specifically target emission ceiling/limit of key pollutants emitted by polluters within IPs, as well as environmental management capacity requirements, such as the soundness of IPs’ environmental risk control system, while the MIIT indicators focus more broadly on waste management and green coverage under this category. Nevertheless, the MEE and MIIT standards have more similarities than differences and could potentially be consolidated into a comprehensive EIP standard.

59 The number of similar indicators between each pair of standards can differ if an indicator in one standard shares similari-ties with more than one indicators in the other standard. For example, 21 MIIT indicators have similar requirements with the MEE indicators; while 19 MEE indicators have similar requirements with the MIIT indicators. See Appendix H for a detailed cross-mapping of the three frameworks’ indicators.

Figure 2.3 Summary of the indicator comparison

Source: World Bank.Note: For example, “MIIT & MEE: MIIT – 21/31; MEE – 19/32” means when comparing MIIT and MEE indicators, 21 out of all 31 MIIT indicators are identical to, or have similar requirements with, MEE indicators; and 19 out of all 32 MEE indicators are identical to or have similar requirements with MIIT indicators.

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The NDRC standard has much less in common with the other standards, as it emphasizes the circular economy performance of IPs. Instead of covering multiple aspects, including managerial, environmental, and economic performance of IPs, similarly to the MIIT and MEE standards, the NDRC standard targets specific aspects of IP management and operation. It therefore shares fewer similar indicators (10 and 7 indicators) with the MEE and MIIT standards but serves its specific function well.

Summary

China has a large industrial sector, an increasingly leading role in combating global environmental challenges such as climate change, and a pioneering experience in adopting regulations and policies for green develop-ment, notably for IPs. This places it among the best positioned countries to take the lead in formulating effec-tive EIP standards that would not only guide the green development and transformation of Chinese IPs, but also serve as a useful reference for the formulation of international EIP standards.

However, the existing Chinese regulatory framework for IPs and EIPs appears relatively complex. For IPs willing to become EIPs, multiple sets of standards by different governmental ministries can create uncertainty about which certification to strive for. While the different standards pursue closely related objectives, the responsible agencies have not yet coordinated and aligned their standards and indicators, which could slow the greening of IPs in China. This suggests a scope for establishing a consolidated set of EIP standards in China, covering all key requirements from various aspects.

In this regard, the EIP Framework jointly adopted by the World Bank Group, UNIDO, and GIZ in 2017 may serve as a useful blueprint for the Chinese authorities to assess their domestic EIP standards and identify oppor-tunities for improvement.60 In the next chapter, a comparative analysis between the Chinese EIP standards and the EIP Framework is conducted to identify the differences between them. Based on this, some recommenda-tions for the Chinese green standards to move toward becoming an internationally exemplary EIP standard are provided.

60 See Appendix I for a presentation of the EIP Framework.

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Comparative Analysis of the Chinese and International EIP Frameworks

While the EIP Framework is a flexible tool with indicative requirements and targets meant to be adapted to local circumstances, it may serve as a useful reference for China to assess the quality of its EIP standards and consider opportunities to improve them.

A comparison between the indicators of the MIIT, NDRC, and MEE standards and the EIP Framework shows that there is significant alignment between the EIP and the MIIT and MEE standards (Figure 3.1). The NDRC standard, due to its specific function of evaluating the circular economy performance of IPs, is less consistent with the EIP Framework. The discussion that follows provide a detailed comparison across four dimensions of the EIP Framework—park management and economic, social and economic performance—and across all the indicators. See Appendix E for further details.

Figure 3.1 Comparison between the Chinese green standards and the EIP Framework

Source: World Bank.Note: The number of checkmarks (√) is used to indicate the consistency/similarity for each indicator/requirement: one, two, and three √s are allocated for low, medium, and high level of consistency, respectively. Full alignment with the EIP Frame-work means 132 √s.

Num

ber

of √

132

49

1844

EIP MIIT NDRC MEE

25

3.1 Park management: “General vs. specific” and “implicit vs. explicit” requirements

The MIIT and MEE standards are moderately in line with the EIP Framework regarding park management requirements, while the NDRC standard is less aligned with the EIP Framework.

The preceding examples show that considering both implicit and explicit requirements regarding park manage-ment in the Chinese context, the Chinese standards and the EIP Framework are quite in line with each other. That said, it would be useful for the Chinese authorities to (i) include implicit requirements in the standards to enhance transparency and (ii) describe each requirement in sufficient detail to avoid ambiguity.

61 Indicator MG-30 and 31 of the MIIT standard and EP-20, ID-30, and ID-31 of the MEE standard require IPs to ensure that the IP’s environmental management ability, green IP information platform, and standard system are sufficiently sound.

- General vs. specific: The Chinese standards on park management requirements are rather general, while the EIP Framework sets more specific prerequisites and performance indicators. For example, the EIP Frame-work requires IPs to have specific systems to monitor park performance (tracking IPs’ environmental, social, and economic performance, as well as critical risk factors and related responses) and comply with local/na-tional regulations and international standards. The Chinese standards have similar requirements, 61 but do not describe in detail what specifically is needed to meet the requirements.

- Implicit vs. explicit: The fact that some requirements are included in the EIP Framework but are not included in the Chinese standards does not necessarily mean that Chinese IPs are exempt from these requirements. Some requirements are not explicitly listed in the Chinese standards because they are usually prerequisites for any planned IP to obtain permission for establishment and operation from local, provincial, and national authorities. For instance, while the EIP Framework provides a list of required park property, common infrastructure and services (such as waste and wastewater treatment plants, waste collection areas and services, and maintenance and repair workshops), the Chinese standards do not list these requirements (except for concentrated wastewater treatment facilities in the MIIT and MEE standards, and environmental protection facilities in the NDRC standard). Nonetheless, all Chinese IPs are required to provide all necessary basic infrastructure and common services for resident firms. Depending on specific circumstances in each IP, this may still fall short of the infrastructure needed to address park-level environmental issues emphasized in the EIP Framework. Another example is the EIP Framework requirement of having a dedicated park manage-ment entity to handle park planning, operations and management, and monitoring. Most Chinese IPs are state-owned and an “IP management committee” (under the administration of the municipal government) is empowered to provide the required services.

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3.2 Environmental performance: “Result-based” vs. “process-based” assessment

The environmental performance section has the most similarities between the Chinese standards and the EIP Framework. Under the goal of building an “ecological civilization,” environmental protection has become a key (if not the key) factor in policy making in the Chinese industrial sector. Requirements targeting environ-mental performance of IPs comprise the largest portion of all three sets of Chinese standards, focusing on subjects similar to the EIP Framework, including resource efficiency, waste management, and pollution control.

Differences still exist with the EIP Framework, which notably requires internationally certified environmen-tal/energy management systems (EMS/EnMS), ecosystem services, monitoring systems for energy consump-tion, sustainable use of water, maximum percentage of waste that is landfilled, and so on. There is nonetheless a considerable degree of consistency between the Chinese standards (especially the MIIT and MEE standards) and the EIP Framework, notably on water reuse efficiency, renewable and clean energy, energy efficiency, waste/by-product reuse and recycling, and pollution prevention and management strategies.

Nevertheless, different approaches are taken by the Chinese standards and the EIP Framework in setting environmental performance requirements. The Chinese standards are largely result-oriented, focusing more on the result of pollution control or resource reuse/recycle (such as the minimum percentage of resource reused, minimum percentage of energy consumption from renewable and clean sources, maximum level of pollutant emissions and waste generation). In turn, the EIP Framework complements outcome-based targets (such as the proportion of solid waste reused) with “process-based” indicators, focusing on the systems and processes established for pollution control and resource efficiency. In addition to overseeing the results of final emission level of pollutants or the total amount of waste generation, the EIP Framework also includes requirements on how to achieve such results. All the prerequisites and almost half of the performance indicators in the EIP Framework directly require IPs and resident firms to set up EMS, monitoring and metering systems, energy recovery and efficiency strategies, resource reuse and environmental assessment plans, carbon intensity and energy intensity targets, and environmental risk management frameworks. These process-focused requirements offer a roadmap that can help IPs and firms achieve environmental protection targets and provide for continu-ous improvement.

China could consider including more process-based indicators in its EIP standards to signal to IPs and firms the systems and processes needed to achieve current and future environmental targets. Future reviews of national EIP standards could also lead to further improvements, such as a stronger focus on the efficient use of materi-als: like the EIP Framework, the Chinese standards include indicators on energy and water efficiency, but mostly consider the efficient use of materials through the angle of industrial waste and its reuse/recycling. In line with circular economy principles, park- and firm-level indicators could be considered to assess results in fostering the third “R” (reduce) and a more sustainable material use (such as “eco-design,” the amount of scarce or polluting raw materials used per unit of output, switching to more sustainable inputs, and adoption of best available technologies). Likewise, China’s EIP standards focus on production processes within IPs and do not consider broader life-cycle impacts, including at the resource extraction, usage, and disposal stages. The Chinese authorities could consider including life-cycle indicators for key products, reflecting efforts and results by IPs and tenant firms to reduce upstream/downstream impacts.

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3.3 Social performance: “Implicit vs. explicit” and “moral standards vs. legal require-ments”

There are significant differences between the Chinese standards and the EIP Framework regarding social performance requirements. 62 Specifically:

In addition, the EIP Framework has requirements on occupational health and safety (OH&S) management systems, and community dialogue and community outreach, while the Chinese standards do not specifically address such topics.

To further improve the Chinese standards, adjustments could be made to explicitly list all the requirements regarding IPs’ social performance. For harassment-related requirements, explicit rules could be introduced to strengthen harassment prevention and women’s rights, including in the evaluation of IPs. In addition, China could consider including broader labor and social dimensions, such as OH&S management systems, social infrastructure, jobs generated in green industries or through circular economy initiatives, and community outreach activities.

3.4 Economic performance: “Economic standards vs. socioeconomic standards”

The MIIT and MEE standards contain some requirements for assessing the economic performance of IPs. However, apart from one indicator in the MIIT standard, the remaining requirements in the Chinese standards share little consistency with the EIP Framework.

62 The NDRC standard shares no requirement with the EIP Framework on this dimension. The MIIT standard and the EIP Framework have only 1 (out of 2) prerequisite and 1 (out of 8) performance indicators in common with the EIP Frame-work; the MEE standard has no similar requirement with the EIP Framework prerequisites and overlaps with only 2 (out of 8) EIP Framework performance indicators.

‐ Implicit vs. explicit requirements: A functioning management system that ensures the provision of funda-mental social infrastructure and services (such as lighting systems, security systems, and night transporta-tion) is a necessary requirement for an IP to be established. Accordingly, some of the requirements in the EIP Framework are not explicitly listed in the Chinese standards but apply to Chinese IPs.

‐ Cultural norms vs. legal requirements: The absence in Chinese standards of EIP Framework indicators on sexual harassment and skills/vocational training of women could partly be attributed to cultural differences. The more conservative nature of the Chinese culture has, to some extent, made topics such as harassment prevention and women’s rights less explicitly or openly discussed by the Chinese public, which tends to see these more as moral standards and less as legal requirements. If harassment occurs, it is more often dealt with using social customs rather than legal regulations.

28

A prominent reason is that the Chinese standards and the EIP Framework have a different perspective on the measurement of economic performance of IPs. The evaluation criteria used by the Chinese standards focus on the economic output of IPs, with a concentration on industrial output and industrial added value (such as indus-trial added value generated from reuse and recycling of resources, industrial output from high-tech firms, and industrial added value growth rate). In turn, instead of measuring the economic performance of the IPs them-selves, the EIP Framework emphasizes the socioeconomic effect of IPs on local economic and social develop-ment (such as requirements to generate local employment, provide local businesses with opportunities to grow, and promote local SMEs). In other words, the EIP Framework assesses the overall socioeconomic performance of IPs beyond the park level.

Going forward, the Chinese standards could productively broaden their coverage to include indicators on local economic and social development. Summary

The Chinese EIP standards are quite comprehensive and cover key requirements for the evaluation and promo-tion of EIPs. However, the comparative analysis of the Chinese green standards and the EIP Framework reveals several differences (Table 3.1). The differences are largely a result of a different perspective on the functions of IPs and a stronger reliance of the Chinese standards on other standards and legislation.

The comparison with the EIP Framework suggests the areas where the Chinese standards could be further improved. These include the need to increase transparency, make certain standards more explicit and introduce specific legislation on women’s rights. Table 3.1 provides specific recommendations. If adopted, the Chinese standards would be strengthened and could become a blueprint for other countries.

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Table 3.1 Summary of the comparative analysis between the EIP Framework and Chinese standards

Identified differencesGeneral vs. specific requirements: The Chinese standards on park management requirements are rather general, while the EIP Framework sets more specific prereq-uisites and performance indicators.Implicit vs. explicit requirements: The fact that some requirements are included in the EIP Framework but are not included in the Chinese standards does not necessarily mean that Chinese IPs are exempt from these requirements. They are not explicitly listed because they are usually prerequi-sites (covered by other legislation or requirements) for any planned IP to obtain permission for establishment and operation from local, provincial, and national author-ities.

Recommendations

Describe each requirement in sufficient detail to avoid any ambiguity.

Include both implicit and explicit requirements in the Chinese standards to enhance transparency.

Park management

Note: EIP = eco-industrial park; IP = industrial park; OS&H = occupational health and safety.

Identified differencesResult-based vs. process-based approaches to environmental management: The Chinese standards are largely result-based and focus more on the result of pollution control or resource reuse/recycle. In addition to outcome-based targets, the EIP Framework covers process-based indica-tors focusing on the systems and processes established for pollution control and resource efficiency. This offers a roadmap that can help IPs and firms achieve environmental protection targets and provide for continuous improvement.Implicit vs. explicit requirements: Some requirements are in place but are not explicitly listed in the Chinese standards because they are usually prerequisites (covered under other pieces of legislation or requirements) for any planned IP to obtain permission for establishment and operation from local, provincial, and national authorities.Cultural norms vs. legal requirements: The general public in China tends to see harass-ment prevention and the protection of women’s welfare more as moral standards and less as legal requirements. Within an IP, if harassment occurs, it is more often dealt with by using social customs rather than legal regulations.The EIP Framework requirements on OH&S management systems, community dialogue, and community outreach are not specifically addressed by the Chinese standards.Economic standards vs. socioeconomic standards: The Chinese standards and the EIP Framework have different emphasis and definitions of IPs’ economic perfor-mance. The evaluation criteria used by the Chinese standards focus specifically on the economic output of IPs, such as industrial output and industrial added value; the EIP Framework emphasizes IPs’ socioeconom-ic impacts on local economic and social development.

Recommendations

Include more process-based indicators in Chinese standards to signal to IPs and firms the systems and process needed to achieve current and future environmental targets.

Assess possibilities to make require-ments more specific to avoid any ambiguity.

Introduce explicit rules to strengthen harassment prevention and women’s rights in the management and evalua-tion of IPs.

Include broader labor and social dimensions, such as OH&S manage-ment systems and community outreach activities in the Chinese standards.

The Chinese standards could produc-tively broaden their coverage to include indicators on the local economic and social development.

Social performance

Economic performance

30

Environmental

performance

This chapter analyzes the result of the first application of the EIP Framework in China, using the Fuzhou High-Tech Industrial Zone (FHTZ) as a case study. The main objectives of this analysis are to (i) identify the key challenges faced by the Chinese IPs to move toward complying with the EIP framework and (ii) use the results of the case study as a reference for further upgrading of Chinese standards to better promote green development and transformation of IPs.

4.1 Overview of FHTZ

FHTZ is located in eastern China, in Fuzhou, Jiangxi Province. It was established in August 1992. It has a total area of 21.48 square kilometers, which comprises about 270 tenant firms and over 30,000 employees. The zone has a mix of sectors, including automobile and auto parts, bio-pharmaceuticals, and IT instrument and equip-ment as its leading industries. They each take up 21.5 percent, 13.7 percent , and 7.4 percent of the total number of firms in the park. 63 In terms of revenues, in 2016, firms in FHTZ generated a total value-added of RMB29.2 billion (US$4.2 billion at the exchange rate on October 15, 2018), and the three leading industries generated 34.2 percent , 15.2 percent , and 20.0 percent of the total revenues, respectively. 64

In February 2015, FHTZ was upgraded to a national-level high-tech zone by the State Council and currently ranks 109 of all 156 national high-tech zones for overall performance in terms of innovation capability. 65 Over the past few years, it has been making efforts to become NDRC-certified “Circular Economy Transformation Demonstration IP” and MIIT-certified “National Green IP.” Compared to the MIIT framework, Fuzhou has advanced in moving toward being eco-friendly in energy utilization and industrialization, but has fallen short of being eco-friendly in resource utilization (see box 4.1). It is continuing the process to be fully certified as a green IP in the future. Efforts completed or underway include the following:

Application of the EIP Framework in the Fuzhou High-Tech Zone

‐ Established a circular economy transformation leadership council‐ Is in the process of producing a circular economy development plan‐ Formed two circular industrial chains (copper processing and construction material)‐ Undertaking clean production audits, with audits for 25 firms completed and 15 underway‐ Started a series of energy conservation and water saving projects‐ Completed various environment- and energy-related projects (such as constructing a concentrated wastewater treatment plant; switching coal-fired boilers to gas; building natural gas pipelines and network; and installing rooftop solar panels)‐ Started the “Internet Plus Smart Park” project with the establishment of online supervision systems on both production and environmental protection‐ Improved pollution prevention and reduction by closing 10 and expelling 2 heavily polluting firms‐ Conducted an environmental impact assessment of all resident firms and established a normalized environ-mental impact supervision platform.

63 Management Committee of Fuzhou High-Tech Industrial Zone (2017).64 Management Committee of Fuzhou High-Tech Industrial Zone (2017).65 The ranking is based on the indicator system constructed by the Ministry of Science and Technology (MOST) and China Academy of Sciences to evaluate the innovation capabilities of national high-tech zones. The system consists of 25 indica-tors divided into five categories: agglomeration of innovation resources; environment of innovation and entrepreneurship; performance of innovation activities; internationalization of innovation; and innovation-driven development. Each national high-tech zone is ranked according to the weighted average of all the scores given to each of the indicators and the weighted average of all scores is used to rank the national high-tech zone in comparison to all the other zones.

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FHTZ was selected for this case study, as part of cooperation with the World Bank, to become a pilot IP in China’s move toward meeting the EIP Framework. In addition, FHTZ, a national-level IP, is a useful blueprint for most “average” IPs in China, which would have difficulty in meeting stringent national and international standards. Finally, FHTZ’s management has an ambitious plan to become a leading green park in China.

Preliminary assessment results

In May 2018, FHTZ completed a preliminary self-assessment against the EIP Framework (Table 4.1); see Appendix F for detailed results). Although further work is needed to fully flush out the self-assessment on an indicator-by-indicator basis, the preliminary evaluation results indicate great potential for (i) FHTZ to fully comply with the EIP Framework and (ii) for the EIP Framework to serve as a blueprint and reference for the Chinese EIP standards to further improve and better guide the green development of IPs.

Box 4.1 Summary of FHTZ’s self-assessment against the MIIT Framework

In 2018, FHTZ completed a self-assessment against the MIIT Framework of Green Industrial Parks， using data from 2016. It did fairly well in 13 out of the 24 indicators in 6 categories, and fell short of the remaining 11 ones. The gaps were particularly big in the “resource utilization” category, in which FHTZ failed to meet the requirements of 5 indicators: namely, land productivity rate, comprehensive utilization rate of industrial solid waste, recycling rate of industrial water, recycling rate of reclaimed water, and recycling rate of reused resources.

A comparison of FHTZ’s performance under the MIIT Framework and the EIP Framework suggests that under both frameworks, FHTZ fell short of the indicators related to renewable and clean energy; water efficiency, reuse, and recycling; and air, GHG emissions and pollution prevention.

Source: World Bank

32

Table 4.1 Summary of FHTZ’s 2018 self-assessment against the EIP Framework

Source: World Bank.Note: FHTZ = Fuzhou High-Tech Zone.

Management

6/6 (100%)

0

0

2/3 (66.7%)

1/3 (33.3%)

0

Environment

3/6 (50%)

1/6 (16.7%)

2/6 (33.3%)

5/14 (35.7%)

2/14 (14.3%)

7/14 (50%)

Social

2/2 (100%)

0

0

1/11 (9.1%)

10/11 (90.9%)

0

Economic

4/4 (100%)

0

0

0

3/5 (60%)

2/5 (40%)

Prerequisites met

Unclear/lack of data but FHTZ believes it meets

Prerequisites not met OR data not available but FHTZ believes it does not meet

Performance indicators met

Unclear/lack of data but FHTZ believes it meetsDoes not meet performance indicators OR data not available but FHTZ believes it does not meet

Number of indicators and percent

4.2 Compliance barriers

The self-assessment highlights several barriers to achieving full compliance with the EIP Framework (Table 4.1). FHTZ meets most (15/18) of the EIP Framework prerequisites (qualitative standards) across the four categories of the EIP Framework. However, it meets fewer of its performance indicators, which tend to be more quantitative. This reflects one of the leading obstacles for FHTZ to comply with the EIP Framework require-ments – data unavailability. Incomplete infrastructure and insufficient incentives also hamper compliance.

Data unavailability

As many as 18 EIP Framework prerequisites and performance indicators 66 that are not met by FHTZ could be attributed (fully or partly) to the absence of relevant data. FHTZ does not collect data or keep records on firm-level environmental management and risk control strategies (environmental requirements), the efficiency and effectiveness of grievance management, harassment response, park security management, and community outreach (social requirements) at both the firm and park level, as well as local employment generation and local economy promotion in general (economic requirements). FHTZ believes that it meets most of the require-ments, but without the data it is unable to prove it.

FHTZ has a dedicated department in charge of collecting and analyzing park-level statistics. However, most of the data collected measure key economic and environmental performance such as industrial output, income, industrial added value, tax revenue, and energy consumption—in line with municipal and provincial require-ments. However, data beyond municipal or provincial requirements are usually not collected.

FHTZ seems to be well positioned to expand its data collection and meet the EIP requirements, in line with international good practice in park performance monitoring (Box 4.2). The benefits of enhanced monitoring would go beyond the compliance with the EIP standards: they would also help further enhance the park’s efficiency and attractiveness to investors.

Box 4.2 Performance monitoring and data collection systems for EIPs

The establishment and effective implementation of a strong monitoring system, based on sound indica-tors and data collection mechanisms, have been highlighted as key elements to improve EIP perfor-mances and ensure accountability (UNIDO 2017). This system should provide an adequate balance of economic, environmental and social indicators, reflecting the local context and priorities. UNIDO provides further recommendations regarding the choice of indicators, including that they (i) be easy to understand and communicate even to nonexperts; (ii) reflect relevant environmental, social, and economic impacts or benefits that can be influenced at the company and/or park level; and (iii) be based on reliable, available, or easily obtainable data that is updated regularly. Around the world, (eco-)indus-trial parks have followed a wide variety of practices regarding performance monitoring beyond regula-tory requirements. Relatively few parks regularly monitor and publish data on key impacts, especially beyond park boundaries.

66 Data are unavailable for 1 environmental prerequisite and 1 out of 3 managerial indicators, 2 out of 14 environmental indicators, 10 out of 11 social indicators, and 3 out of 5 economic performance indicators.

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The establishment and effective implementation of a strong monitoring system, based on sound indica-tors and data collection mechanisms, have been highlighted as key elements to improve EIP perfor-mances and ensure accountability (UNIDO 2017). This system should provide an adequate balance of economic, environmental and social indicators, reflecting the local context and priorities. UNIDO provides further recommendations regarding the choice of indicators, including that they (i) be easy to understand and communicate even to nonexperts; (ii) reflect relevant environmental, social, and economic impacts or benefits that can be influenced at the company and/or park level; and (iii) be based on reliable, available, or easily obtainable data that is updated regularly. Around the world, (eco-)indus-trial parks have followed a wide variety of practices regarding performance monitoring beyond regula-tory requirements. Relatively few parks regularly monitor and publish data on key impacts, especially beyond park boundaries.

A good example of the integrated assessment of the economic, social and environmental performances of industrial areas is provided by the Kwinana Industrial Area (KIA), and the broader Western Trade Coast (WTC) industrial region it belongs to, in western Australia. The Kwinana Industries Council (KIC) and WTC Industries Committee have taken the lead in preparing repeated integrated assessments of the industrial region’s environmental, social, and economic impacts. These assessments were published in 1990, 2002, 2007 (for KIA only), and 2014 (for the WTC), allowing trends to be identified over time. These periodic assessments complement more continuous monitoring of key dimensions, such as air and water quality. The scope of the analysis has gradually expanded to cover a large range of issues relevant to the zone and surrounding community. Regarding economic benefits (such as output, jobs and wages, and investment), the latest assessment looked not only at direct impacts from firms located in the zone, but also considered broader local impacts in the surrounding region. For instance, while the WTC was estimated to generate A$15.6 billion in sales and 13,757 jobs, the corre-sponding indirect impacts were A$10,3 billion and 18,274 jobs. On the social side, the assessment notably looked at the composition of the labor force (for example, in terms of gender, age, and residence), employee transportation modes, provision of social services and benefits for employees, skill development, and community engagement. Finally, the report also assessed environmental aspects, including pollution levels, development of resource efficiency/cleaner production, and indus-trial synergies. Another good example is regional regulation of “Ecologically Equipped Industrial Areas” in Italy, which requires the management body of EIPs to perform an analysis of the environment in the area in and surrounding the park, and of the main pressures exerted by industries. This analysis aims to lead to the establishment of a program and action plan to address the main issues, and should be updated at least every three years, or any time a change with significant environmental implications occurs in the park or surrounding area .

Sources: http://www.westerntradecoast.wa.gov.au; https://kic.org.au; WTCIC (2014); UNIDO (2016, 2017); Daddi et al. (2016).Note : EIP = eco-industrial park.

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Incomplete infrastructure

Specific infrastructure could be improved or added within FHTZ to better comply with certain environmental performance requirements in the EIP Framework. FHTZ fails to meet two EIP Framework environmental prerequisites and three performance indicators due to an absence of internationally certified environmental/en-ergy management systems, waste heat recovery capacity, a monitoring system of the emission of greenhouse gases (GHG) and other pollutants within the park, an energy consumption metering and monitoring system, and sufficient capacity for water and waste reuse.

As explained in the previous section, the Chinese EIP standards that FHTZ and other IPs are striving to comply with generally do not specify required “green infrastructure” (except for wastewater treatment facilities, green building, and public buses in the MIIT and MEE standards). This difference between the Chinese standards and the EIP Framework may contribute to the performance gap of FHTZ against the EIP Framework on this level. Using the EIP Framework as a reference to assess green infrastructure needs could be useful to further the green transformation of FHTZ and other Chinese IPs, and to improve Chinese EIP standards.

Insufficient incentives

Insufficient incentives can explain the gaps between FHTZ’s current performance and several EIP Framework performance indicators, both economic (such as promoting local SMEs) and environmental (such as maintain-ing a functioning EMS/EnMS in line with international standards; more ambitious renewable energy use than the national average level; more aggressive carbon intensity reduction and energy intensity improvement; and waste reuse and appropriate disposal) .

Projects have been designed by FHTZ to move toward meeting requirements in renewable energy use, carbon intensity, and energy efficiency. However, FHTZ management argues that it would be difficult to identify further potential for increasing energy efficiency and the use of renewable energy in the brownfield considering the existing energy use structure (electricity mainly from the grid) and the cost of upgrading or changing the current infrastructure. Incentives to increase the use of renewables and energy efficiency depend on several context-specific regulatory, economic, and technical factors, which should be considered when setting EIP performance standards. These considerations also suggest a role for more awareness raising and technical support to identify profitable investment opportunities in renewable energy and energy efficiency at the park and firm level.

Insufficient incentives to go beyond domestic requirements and standards, or low awareness of the benefits of doing so, can also explain FHTZ’s performance gap in meeting other EIP Framework requirements, such as:

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- EMS/EnMS in line with international standards:67 FHTZ argues that meeting international standards does not provide sufficient additional incentives in terms of investor attraction, public support and recognition, and economic benefits. Unless specifically required by provincial or national standards, IPs may not voluntarily make efforts to meet such requirements. However, many IPs in China and elsewhere have sought international certification for their EMS and have reaped corresponding environmental and economic benefits, including in terms of attracting additional domestic and foreign investment. (Box 4.3). Sound systems and processes for continuous improvement have been highlighted as a key success factor for EIPs by a global assessment of EIPs in developing and emerging countries conducted by the United Nations Industrial Development Organization (UNIDO 2016). Promoting the adoption of certified EMS/EnMS at the park and firm level could be considered by FHTZ and for Chinese EIP standards.

- Linkages with local businesses: FHTZ benefits the local economy by providing employment, contributing to the local and regional GDP, and stimulating the growth of local enterprises. However, FHTZ explained that tenant firms rarely procure products and services from local enterprises; instead, they source their inputs from the most competitive suppliers in a larger market. The targets for local sourcing in the EIP Framework are indicative, 68 and the appropriate level is context-specific. Such indicators are mostly relevant in countries where foreign-owned companies in IPs or Special Economic Zones largely rely on imported inputs and do not foster significant domestic value addition. This is less of an issue in China, which has successfully fostered linkages between industrial zones/parks and local suppliers to enhance domestic value added and to strengthen the local skills and capacity base. Performance monitoring by FHTZ and other EIPs in China could nonetheless look at local-level efforts to promote more advanced forms of linkages, such as industrial symbiosis, which is a key element of the circular economy and has been successfully fostered through dedicated initiatives in sever-al countries, including China (Box 4.4).

Box 4.3 Environmental management systems and ISO 14000 standards for IEs

Environmental management systems (EMS) can be defined as a system of organizational objectives, policies, and processes adopted by an organization with the aim to achieve domestic environmental compliance but also to continuously improve environmental performance and operating efficiency,including for nonregulated issues. The main elements of sound EMS are defined internationally through the ISO 1400 series of voluntary standards and guidelines. This includes the ISO 14001 standard, for which the organization can self-declare its participation or formally register, which requires verification by an accredited third party. Countries can develop their own schemes to accredit certifiers and approve training programs. The adoption of EMS and ISO 14001 certification have been actively promoted among industrial companies in China since the late 1990s, notably through the adoption of accreditation mechanisms and the designation of pilot regions and cities for the promotion of ISO 14000.

67 The EIP Framework suggests this requirement for firms with at least 250 employees.68 The EIP Framework mentions that local sourcing is to be promoted by EIPs “when appropriate and cost effective to do so.”

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While generally applied at the level of an individual company, EMS and ISO 14001 can also be adopted by larger organizations, such as industrial estates. This can be done to manage the environmental impact of an estate’s own activities and services, which is mostly relevant if the estate management is responsi-ble for major services, such as common effluent treatment plants (CETPs) and solid waste management facilities. Various industrial estates in countries such as Belgium, France, Germany, Japan, Indonesia, the Philippines, Spain, and Thailand have obtained ISO 14001 certification for their activities over the last two decades. A more ambitious version is that of a comprehensive EMS (CEMS), in which estate management and tenant companies each establish their own certified EMS and adopt joint policies and activities to address common issues at the estate level. Given the possible reluctance or incapacity of some tenant companies (especially SMEs) to invest in a formal EMS, the intermediate option of an “environmental quality charter” has been promoted in France by the association Orée. Estate managers and tenants sign a contractual charter specifying their respective environmental responsibilities and areas of collaboration.

In China, the State Environment Protection Administration (SEPA) launched an IP-wide ISO 14001 demonstration program in 1999. Several industrial estates have been certified since then and have promoted the use of EMS among their tenant companies, which has been credited with improved environmental management as well as diverse economic benefits (including increased attractiveness for foreign investors) and social benefits in these estates. Given the tendency of Chinese industrial estates to be large and include industrial and residential areas, these EMS generally address the environmental impacts of both. For instance, the Dalian Economic and Technological Development Zone (DETDZ) adopted an EMS covering air emission control, integrated management of water and of solid waste, emergency preparedness, and promotion of cleaner production and supported ISO 14001 certification among local enterprises through technical assistance and partial payment of certification costs.

Sources: Geng and Côté (2003); UNEP (2001); FOEN (2014).Note: IP = industrial park; ISO = International Organization for Standardization. For more on ISO 14001 certification, see https://www.iso.org/iso-14001-environmental-management.html

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Box 4.4 Fostering industrial symbiosis through regional networks

Industrial symbiosis (IS) is the process by which by-products or waste (such as material, water, and heat) from one industry that would otherwise have been discarded become valuable inputs for one or several other industries. This can benefit all parties involved economically and can generate environ-mental gains. There has been an expert debate since this concept emerged in the 1990s to determine what the success drivers of IS are, and whether such relationships between firms could be planned from scratch (Costa and Ferrao 2010). While IS is largely seen as a business-driven process, as in the case of the most famous example of Kalundborg in Denmark, a it is widely recognized that appropriate regulato-ry and institutional frameworks can play an important role to facilitate the emergence of successful symbiotic exchanges. Along with other countries, such as the United Kingdom, Australia, and Korea, China has been one of the countries where policy makers have sought to promote IS over the last two decades.

One approach to do so is the establishment of national/regional IS networks. This arrangement has been successfully implemented in the United Kingdom under the National Industrial Symbiosis Programme (NISP). Inspired by an earlier similar initiative in Mexico, a regional IS network initiative was first piloted in the Humber region in 2000 by the UK Business Council for Sustainable Develop-ment, in cooperation with an academic institution and local business groups. It has subsequently been extended to other regions, and coordinated at the national level under NISP with government funding since 2004.

Activities under the different regional initiatives included convening stakeholders, raising awareness , playing a coordination role to address potential barriers to IS or leverage opportunities/resources (tech-nical, economic, political, informational, social), providing data collection and analysis, offering support to design and implement symbiotic exchanges, and conducting independent impact evalua-tions. The experience has shown that it was essential to identify well-established and capable local institutions and practitioners with deep knowledge of local industries to animate the network, and to ensure the participation of committed champions from key local companies. Moreover, NISP was facilitated by conducive policies (such as a resource productivity policy) and tax incentives (including a climate change levy and a landfill tax and credit), although some regulations hampered IS (such as those restricting the alternative use of waste).

After five years, NISP had over 12,500 member companies (mostly SMEs) and contributed to signifi-cant economic and environmental gains, including reducing the use of virgin material by almost 10 million tons, diverting 7 million tons of waste from landfill, reducing carbon emissions by over 6 million tons, enabling ₤156 million in cost savings and ₤176 million in additional sales for participating firms, creating 3,683 jobs and saving 5,087 ones.b NISP has been recognized as best practice by the EU and has been emulated in several other countries, including Brazil, South Africa,c and Canada.d

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In China, IS has been included in the scope of EIP development early on. NISP implemented a pilot circular economy project in Yunan Province in 2008, and established a partnership with the Tianjin Economic Development Area (TEDA) in 2010 to develop an IS network in the surrounding Tianjin Binhai New Area (TBNA), as a step toward introducing this approach nation-wide. However, this coop-eration initially struggled to generate broad interest from local companies, due to a less conducive policy environment compared to the United Kingdom (including lack of regulatory or fiscal disincen-tives to engage in landfilling). Between 2010 and 2013, the program was nonetheless credited with having facilitated 99 synergies and diverted 1,430,000 tons of material from landfill.e The Eco-Center established by TEDA management to implement the program was maintained after its completion to continue promoting industrial symbiosis and other environmentally sound business practices in TBNA.f Beside TEDA, other IPs in China have had a long and successful experience fostering IS, such as the Rizhao Economic Technological Development Area (REDA) (Yu, Han, and Cui 2015).

Sources: Mirata (2004); Laybourn and Morrissey (2009); Costa and Ferrao (2010); Wang, Deutz, and Gibbs (2015); Wang, Deutz, and Chen (2017); Yu, Han, and Cui (2015).a. http://www.symbiosis.dk/en/.b. https://www.international-synergies.com/project-types/government c. http://greencape.co.za/wisp/.d. http://nispcanada.ca.e. It must be noted, however, that a substantial IS base had already been developed in TEDA since the 1990s, with active involvement of TEDA management, notably with the establishment of a dedicated information platform to facilitate by-product exchanges among tenants (Geng, Haight, and Zhu 2007; Shi, Chertow, and Song 2010).f. http://www.ecoteda.org/english/.

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Fiscal and financial instruments to promote and develop EIPs

The experience in China and beyond shows that IPs and their tenant firms do not always have the information, technical capacity, and financial capacity necessary to improve their environmental performance and shift toward an EIP model. This section assesses the set of fiscal incentives and financial instruments used by MIIT, NDRC, and MEE to foster this shift, assesses their strengths, and offers ideas for further improvement.

5.1 Evaluation of the incentive frameworks of the Chinese EIP standards

MEE

‐ Supportive financial policies using provincial/local public finance

The Guidelines on the Management of National Eco-Industrial Parks briefly state that provincial and local governments, as well as their environmental protection departments, should formulate supportive policies for EIPs to prioritize projects such as infrastructure for pollution prevention and control, energy/resources efficien-cy and eco-industrial chains (MEE, MOC, and MOST 2015). Specific supportive funds or preferential taxation policies should also be in place to support such projects.

In December 2011,69 MEE, MOFCOM, and MOST published more comprehensive guidelines on the incentive framework for supporting EIPs.70 The Guiding Notice encourages public funds for energy conservation and emission reduction, green development, technological innovation, and environmental protection at the provin-cial and local level to support EIPs. It also encourages the establishment of public funds that specifically support EIP development. Loans with preferential interest rate and preferential taxation policy are also required to be in place to assist key projects and research within EIPs. In addition, the Guiding Notice also encourages IPs to establish “special construction funds” for EIP development to support projects on park planning, infrastructure sharing, and industrial symbiosis, as well as the capacity building of IPs (for example, through information sharing platform, consulting services, innovation activities, and R&D).

‐ Financing from financial institutions and other private sources

In addition to financial support from provincial/local public finance, the Guiding Notice also proposes to guide and promote financial institutions to provide financial support for the development of EIPs. Domestic and foreign private investors are encouraged to participate and assist the construction of EIPs.

69 The Ministry of Environmental Protection (MEP) at that time.70 Guiding Notice on Strengthening the Development of National Eco-Industrial Parks (MEE, MOC, and MOST 2011). EIPs here mean MEE-certified “National Demonstration Eco-Industrial Parks” (国家生态工业示范园区).

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‐ Nonfinancial incentives

In addition to financial support provided to EIPs, nonfinancial incentives are also in place. The Guiding Notice proposes to improve the “evaluation system for the comprehensive development of national development zones” by including the establishment of EIPs as a key indicator. Provincial and local departments of commerce are required to include indicators relevant to the construction of EIPs in the assessment of industrial zones’ “investment/business environment and competitiveness,” and gradually increase the weight of such indicators. EIPs with notable performances will be honored and awarded. However, it is not clear how well these incentives have worked so far.

NDRC and MOF

‐ Direct subsidies from NDRC and MOF

Unlike indirect support from the MEE, the NDRC, working together with MOF, provides direct financial support for selected green transformation projects proposed by demonstration IPs. 71 Each year, interested IPs are required to draft an Implementation Plan for Circular Economy Transformation according to the published guidelines. 72 Through assessment and recommendation at the provincial level, and evaluation and selection by the NDRC and MOF at national level, certain investment projects in the implementation plans proposed by IPs are financially supported by the MOF and NDRC using funds from the central government’s budget.

‐ General fiscal and financial support from public finance and public-private partnership

In April 2017, NDRC, together with 13 other government ministries and departments, 73 adopted An Action Plan for Leading Circular Economy Development, in which “circular economy transformation of IPs” is one of the key projects (NRDC 2017). The Action Plan proposes to financially support projects relevant to circular economy transformation and development with funds from public finance, as well as the leveraging of private capital through public-private partnerships (PPPs). It also proposes to promote the use of green finance, includ-ing green credits, bonds, insurance funds, and industry funds, to support circular economy transformation projects.

NDRC also provides financial support to circular economy transformation projects. Akin to the MIIT incentive framework, NDRC provides incentives (including access to green finance) for both IPs and tenant firms for the promotion of circular economy, although the link between getting access to financial support and residing in green-certified IPs is not explicitly specified.

MIIT

‐ Supportive fiscal/financial policy at the national and provincial level

According to the Notice on the Establishment of a Green Manufacturing System, which sets the MIIT’s green IP standard, the MIIT “will use ‘funds for industrial transformation and upgrade’, special funds for

71 Notice on Recommending Key Candidate Industrial Parks for Circular Economy Transformation in 2017 (NDRC and MOF 2017b).72 Guideline for Industrial Parks on Drafting Implementation Plan for Circular Economy Transformation.（NDRC and MOF 2017b; NDRC 2015b)73 MOST, MIIT, MOF, MEE, MOC, Ministry of Natural Resources, Ministry of Housing and Urban-Rural Development, Ministry of Water Resources, Ministry of Agriculture and Rural Affairs, State-owned Assets Supervision and Administra-tion Commission of the State Council, State Administration of Taxation, National Bureau of Statistics, National Forestry and Grassland Administration.

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74 See the Plan for Industrial Green Development (2016−2020) (MIIT 2016c); Implementation Plan for the 2016 Action on Green Manufacturing (MIIT 2016a); and Notice on Establishing the Integration of Green Manufacturing Systems (MIIT and MOF 2016).75 Including budgetary resources from the central government ; special funds for construction; other funds relevant to technological transformation, energy conservation and emission reduction, and clean production; preferential taxation policy; government procurement of green products; and financing from public-private partnerships.76 Including expanding the scale of green credits and green bonds, establishing green industry development funds, innovat-ing new green financial instruments and services, linking “green performance” of firms to their credit rating, and encourag-ing financial institutions to provide more convenient and preferential credit support and guarantee service for the green transformation of SMEs.77 Strategic Cooperation Agreement on Jointly Promoting the Implementation of the ‘Made in China 2025 Strategy’ (MIIT and CDB 2016). 78 Notice on Recommending Key Green Credit Projects of Industrial Energy Conservation and Green Development in 2017 (MIIT and CDB 2017).

industrial transformation and upgrade’, special funds for construction, green credits, and other supportive financial policies to assist the building of a green manufacturing system (including green factories, green products, green industrial parks, and green industrial chains)” (MITT 2016d). Furthermore, products from the green manufacturing system are prioritized in government procurement. Other relevant documents from MIIT74 emphasize the objective to promote the development of green IPs and firms through supportive fiscal instruments75 and green finance. Provincial government and financial76 institutions are equally required to support such projects.

‐ Credit support through cooperation with China Development Bank (CDB)

In November 2016, MIIT and CDB reached an agreement to offer credit support for the “Made in China 2025 Strategy,” which includes the development of green factories, firms, and IPs. 77 CDB will provide no less than RMB 300 billion of financing during the 13th Five Year Plan period (2016−2020) for selected projects in the form of loans, investment, bonds, leasing, and securities. MIIT and CDB subsequently clarified priority project categories, including resource efficiency and green transformation of industrial production (with the establish-ment of green factories, IPs, and industrial chains as key priorities); digitalization of energy management; clean production; and comprehensive utilization of resources 78—all of which are closely related to EIPs and are in line with the requirements in both the Chinese standards and the EIP Framework. The maturity of CDB loans is 5 to 10 years, and both firms and IPs are encouraged to apply. Application should be submitted to provincial Department of Industry and Information Technology (DIIT) first and be evaluated by provincial DIIT and CDB branch. Shortlisted projects (no more than 10 projects per province) are then recommended to MIIT. CDB decides which projects to offer green credits to, as well as the amount of loans.

In summary, MIIT has a broad array of instruments in place to promote the green transformation and develop-ment of IPs, their compliance with the MIIT green IP standards, and more generally, the building of the green manufacturing system. Supportive policies and financing are provided from government departments at both the national and provincial level, as well as from green finance, including from CDB. Sources of financial support are diverse, and incentives are provided for both firms and IPs. Importantly, a link between getting access to financial support for firms and residing in green-certified IPs is established.

Summary

All three Chinese green standard-makers have a broad set of policy instruments in place to promote indirect compliance with the Chinese green standards, and the green transformation and development of IPs overall. The sources of incentives are various, including direct subsidies from the central government’s budget; supportive fiscal policies from national, provincial, and local governments; financing from financial institu-tions; and preferential tax rates and interest rates (for loans); as well as nonfinancial incentives. To enhance

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79 EDGE (Excellence in Design for Greater Efficiencies), is a green building certification system developed by the Interna-tional Finance Corporation (IFC), part of the World Bank Group, to promote resource-efficiency in building design. More information on: https://www.edgebuildings.com/marketing/edge/ 80 LEED (Leadership in Energy and Environmental Design) is a green building rating system developed by the U.S. Green Building Council. More information on: https://new.usgbc.org/leed81 Opinions on Enforcing Environmental Protection Regulations and Preventing Credit Risks (CBRC, PBoC, and MEP 2007). 82 Guideline on Establishing a Green Finance System (PBoC et al. 2016). 83 For an overview, see, for instance, IIGF and UNEP (2017).

the efficiency of public financing, it will be important to ensure that the different fiscal incentives to support EIPs adopted in recent years are not duplicative but complementary, and are regularly evaluated to ensure value-for-money.

Most of the incentives are provided for both IPs and firms, but these are often separate. A more explicit link could thus be established between the provision of incentives for firms and their location in an EIP. This would provide additional incentives for IPs to comply with the green standards because in addition to the incentives for parks themselves, resident firms within parks would also expect to comply with green standards to get access to additional financial support. IPs with a larger percentage of resident firms that are green-certified ( for such standards as EDGE79 , LEED80 , ISO14001/5001) or have demonstrated other efforts in green transfor-mation and upgrade could be prioritized for financial support, which could potentially strengthen incentives for both IPs and firms. Finally, it would also be useful to provide direct incentives to parks for compliance with the MEE and MIIT green standards, in the form of, for instance, direct subsidies, akin to those provided by NDRC.

5.2 Green finance for the green transformation and development of IPs in China

The Chinese authorities have increasingly considered green finance as an important tool to support the large investments required to build an “ecological civilization” in China. One of the first government documents relevant to green finance was jointly published by the China Banking Regulatory Commission (CBRC), People’s Bank of China (PBoC), and the Ministry of Environmental Protection (MEP) in July 2007. 81 The Opinions explicitly required that bank loans should preferentially support green industries that promote circu-lar economy development, energy efficiency, and pollution reduction, while strictly limiting the provision of bank loans to industries with high pollution and emissions. Subsequently, a comprehensive and consolidated policy framework to establish a green financial system was adopted by seven government ministries and departments in 2016. 82

Since then, green finance has developed rapidly in China, making it one of its leading green financial markets worldwide.83 For instance, Chinese green bond issuance aligned with international definitions reached US$22.9 billion in 2017, accounting for 15 percent of the record US$155.5 global issuance and making China the second largest green bond market behind the United States (Climate Bonds Initiative 2018). China’s green credit takes up about 90 percent of the total green financial market (Yicai.com 2018). By the end of 2017, the balance of green credit issued by 21 major Chinese banking institutions was about 8.5 trillion RMB, totaling approximately 9 percent of the total credit balance (Yicai.com 2018).

This section presents key green finance instruments most closely related to EIP promotion and development in China, namely green credit, green bonds, green development funds, and international cooperation.

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84 Notice on Guiding the Use of Green Credits (CBRC 2012); Statistical System of Green Credit (CBRC 2013).85 Notice on Issuing Key Evaluation Indicators of Issuing Green Credit (CBRC 2014). 86 Notice on Recommending Key Green Credits Projects of Industrial Energy Saving and Green Development in 2017 (MIIT and CDB 2017). See also CSRC 2017.87 Guideline on the Issuance of Green Bonds (NDRC 2015c). 88 These are special-purpose funds run by different central government departments (专项建设基金).

Green credit

Green credit is a major area of green finance in China, which has grown rapidly in recent years and has received significant policy support. Under the instructions of CBRC, banks are required to increase lending to green projects, and banking regulatory commissions at all levels are required to enhance their regulatory activities in the area of green credit. Moreover, to promote transparency and enhance supervision of banks, CBRC has formulated the Statistical System of Green Credit,84 requiring banks to collect and disclose data on their loans to firms with significant risks in environment and security, as well as on their loans to projects and services in energy conservation and environmental protection (CBRC 2013). Lastly, to further incentivize banks in issuing green credit, CBRC has created an evaluation system of green banks and designed a set of qualitative and quan-titative indicators for performance appraisal and evaluation, such as whether the bank has established its strate-gy, goal, and specific measures for developing green credit, and whether the bank has classified its clients according to environmental and social risks when issuing loans.85

In the current green credit policy system, projects supporting environmental protection, resource efficiency, clean energy, green production, and green transportation and building are the ones that get the most support. Industrial parks are highly encouraged to apply. For example, in 2016, ten Chinese commercial banks signed a memorandum with the Shanghai Municipal Economic and Information Commission agreeing to provide RMB 50 billion in loans to key green transformation projects within IPs during the implementation of the 13th Five-Year Plan period (2016−2020) (People.cn 2016). This is by far the largest green credit program that specifically targets the promotion of green IPs. In another example, in 2017, MIIT and China Development Bank (CDB) jointly launched a program for developing green credits for projects in key areas of energy conser-vation and green development; green industrial parks are given priority in getting loans compared to other parks meeting all the same other conditions. 86

Green bonds

In December 2015, the NDRC initiated the use of green bonds in the Chinese financial market by allowing firms to issue green bonds to finance green development projects.87 The NDRC adopted guidelines, which specify preferential policies such as a higher maximum proportion of capital collected through green bonds in total investments or exemption from regular quota restrictions on bond issuance to encourage and promote the use of green bonds among local governments. In addition, local governments are required to actively guide private investors to participate in green projects and support the issuance of green bonds and the implementa-tion of green projects through investment aid, interest subsidy, and direct capital injection. Lastly, a combina-tion of green bonds and special construction funds for investment in EIP infrastructure is encouraged: green projects that have already issued green bonds are prioritized in receiving special construction funds. 88

Several key project types mentioned in the NDRC’s Guidelines are relevant for EIPs, including technological upgrade for resource efficiency and emission reduction, energy efficiency, renewable energy, circular economy upgrade, pollution prevention and waste disposal, and “ecological civilization” and low-carbon demonstration zones. Some IPs have already issued green bonds. For instance, Shanghai Lingang Economic Development Co. Ltd., which develops and operates IPs, issued a US$160 million bond in March 2018 to finance the construc-tion of green-certified office buildings in a selected IP (Climate Bonds Initiative 2018).

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89 Guideline on Establishing a Green Finance System (PBoC et al. 2016).90 Presentation of Dr. Ma Jun at the Green Finance Workshop organized by the World Bank on June 26, 2018.91 Presentation given by Ma’anshan Rural Commercial Bank at the Green Finance Workshop held by the World Bank in Beijing on June 26, 2018.

Green development funds

Green development funds to be established at different administrative levels are the third financial instrument for promoting the development of EIPs. 89 China plans to combine existing funds for environmental protection into a national green development fund and invest in green industries. The central government also encourages financially capable local governments to establish regional green development funds.

By the end of 2016, more than 50 green development funds have been established by various provincial and municipal governments, including Zhejiang Industrial Fund, Guangdong Environmental Protection Fund, and Xinjiang Green Industrial Fund at the provincial level, and Pu’er (Yunan) Green Economic Development Fund, Zhangjiakou (Hebei) Green Industrial Development Fund, and Xin’anjiang (Anhui) Green Development Fund at the municipal level (Sohu.com 2018).

Nongovernmental green development funds of various types (established by domestic and foreign investors) are also supported. For example, the US-China Green Fund was announced in the US-China Strategic and Economic Dialogue in 2016 and managed by US-China Green Investment Management Ltd (US-China Green Fund 2017). China Green Energy Development Fund was founded by China Green Fund, the Academy of China Energy at Peking University, and Beijing Meilinfudi Energy and Technology Consulting Company (China Green Times 2011). As of the end of 2017, there were about 250 green funds (governmental and nongovernmental) located in all provinces across the country. 90

Green financing from international institutions

In addition to domestic sources, international institutions are also an increasingly important option for financ-ing green development in China. The Guideline on Establishing a Green Finance System encourages coopera-tion on green finance with international partners and institutions (PBoC et al. 2016). Joint-venture green devel-opment funds are also encouraged to be established together with foreign investors.

The Chinese government has, for instance, worked closely with the World Bank Group on green finance. The Bank’s US$200 million lending project on green infrastructural improvement in FHTZ (under preparation) is an ongoing example. A green finance project between the International Finance Corporation (IFC) and the Ma’anshan municipal government (Anhui Province) also started in 2017 to establish the first small and medium commercial bank in China (Ma’anshan Rural Commercial Bank), with green finance as its core business. In 2017, the total scale of Ma’anshan Rural Commercial Bank’s 164 green loans amounted to RMB2.05 billion, covering areas such as renewable energy, water pollution prevention, green building, green agriculture, and energy efficiency. The current scale of the 23 green loans in 2018 has reached RMB 1.22 billion.91 Three to five similar “green commercial banks” are expected to be established through joint efforts by the IFC and Chinese commercial banks (Wei 2017).

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Summary

As China continues to develop its green financial system, it is important to ensure that green finance is fully leveraged to support the development of EIPs. Among other general issues for the implementation of green finance, this will require (i) coordination with the different EIP standards in place, as well as with industrial and other relevant policies; (ii) increased focus on data collection and the evaluation of green finance initiatives’ impacts; and (iii) capacity building for green finance at the local level for local authorities, financial institu-tions, IPs, and industrial firms alike (IIGF and UNEP 2017). Public fiscal incentives, while important, will not be sufficient for the green development and transformation of Chinese IPs, and will increasingly have to be complemented by commercial and private capital. Green credit and green bonds are promising instruments to help achieve this goal. Likewise, the MOF and NDRC have developed the policy framework for green PPPs (NDRC and MOF 2014), which have grown rapidly and could provide sufficient financing of green infrastruc-ture in EIPs.

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Conclusions and Policy Recommendations

This report reviewed China’s policy and regulatory framework for greening IPs, which will be a key element of building an “ecological civilization.” IPs have become a major source of resource use and pollution, as well as a major generator of waste, but they also offer opportunities to target efforts to mitigate adverse environmen-tal impacts from industries.

An important instrument to guide this process is the definition of national EIP standards. China has been a trailblazer by adopting several such standards in recent years and promoting them at a large scale. While volun-tary, these standards have started to be adopted by a growing, although still small number of Chinese IPs. They can be a way for IPs to effectively reconcile economic, environmental, and social objectives. As various supporting schemes for IPs continue to be rolled out in the coming years, critical implementation issues will have to be addressed, including the mainstreaming of EIPs and building of local capacity in all regions of the country; the strengthening of verification and supervision mechanisms to ensure continuous adherence to the standards by recognized EIPs; and data collection and the quantitative assessment of economic, environmen-tal, and social benefits from EIP models.

This report shows that China’s policy and regulatory framework for EIP promotion is comprehensive and has started to drive the green transformation of IPs. A comparison between the Chinese standards and the EIP Framework recently developed by the World Bank Group, UNIDO, and GIZ confirms that both sets of standards are generally aligned, although there are opportunities to further strengthen Chinese standards by more closely aligning them with the EIP Framework.

As they continue to evolve, the Chinese policy framework and standards for EIP promotion have significant potential to improve the sustainability of industries and to serve as a model internationally. To contribute to this objective, this report proposes the following policy recommendations:

1. Introduce more ambitious targets to increase the number of EIPs. The proportions of MEE-certified, NDRC-certified, and MIIT-certified EIPs are all lower than 5 percent of the total number of IPs in China. MIIT plans to increase the number of green certified parks to 100 by 2020 (which would increase the proportion of MIIT-certified green IPs to 3.9 percent of the total) and the NDRC plans to support “circular economy upgrade projects” in 75 percent of all national parks and in half of all provincial parks. Nonetheless, the achievement of these targets—which could take time and could face challenges in implementation—would still leave many Chinese IPs uncertified. Thus, China could consider setting more ambitious targets to promote EIPs. It could become mandatory, for instance, for all national IPs to gradually achieve compliance with national EIP standards by a specific date, taking the starting points of different IPs into account (for example, 10 percent of all national IPs should achieve compliance by 2020, 50 percent by 2025, and 100 percent by 2030). As part of this effort, it would be useful to scrap limits on the number of parks that can seek EIP certification.

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2. Consider consolidating, updating, and streamlining EIP standards. The coexistence of three sets of standards managed by different government ministries and with significant overlap leads to a lack of clarity for IP managers and industries. Based on the experience acquired to date with the different standards, a consolidat-ed set of requirements for EIPs could be prepared and adopted. This new standard could include different categories to cover specific aspects emphasized by current standards, such as circularity. In addition, it would be useful to upgrade the scope of requirements and indicator, by, for instance, making all requirements explicit, adding indicators on processes and systems to achieve environmental targets, and developing indicators on the management of social aspects, which would allow the Chinese standards to become more aligned with the EIP Framework and become a global blueprint. Moreover, as recommended in the EIP Framework(Box 6.1), China could adopt a more complex framework that allows for tiering (such as bronze-level, silver-level, and gold-lev-el or one-star, two-star, three-star certification) to encourage competition between EIPs and continuous improvement. This effort could build on the green index used in the MIIT standard, for instance. Lastly, if consolidating the standards proves difficult in the short term, efforts could be made in the meantime to stream-line the disparate and cumbersome application procedures for each of the certificates.

Box 6.1 Example of a tiered EIP certification system

The figure below presents an illustrative example of approach for assessing EIP performance through a tiered certification system. Starting from the understanding that compliance with all applicable interna-tional, national, and local regulations should be the minimum requirement for any IP, this system includes three successive performance levels. Bronze-level certification would be awarded to IPs meet-ing the minimum requirements under the EIP Framework. The silver and gold levels would be reserved to EIPs meeting more stringent requirements. This system would send clearer signals about each EIP’s performance, foster competition among EIPs, and encourage continuous improvement by each individ-ual IP.

Source: WBG, UNIDO, and GIZ (2017), p. 61

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3 Seek an optimal set of indicators to balance economic competitiveness and environmental protection. An important objective of EIPs is to simultaneously achieve increased economic competitiveness and lower environmental impact. However, when comparing the three sets of Chinese EIP standards among themselves and with the EIP Framework, it is difficult to identify which indicators are best placed to achieve such a balance. Identifying an optimal set of indicators and targets, based on the economic modelling of IP’s economic and environmental performance and marginal trade-offs between them, would be useful.

4. Improve data collection and analysis systems to track IP performance against domestic and interna-tional EIP standards and expand access to information. Robust performance monitoring is key to track IPs’ progress against all environmental, social, and economic goals and EIP requirements, and to ensure transparen-cy and accountability. However, the comparative analysis and FHTZ case study suggest that management of Chinese IPs often does not have access to sufficient data to conduct such monitoring. To address this issue, China could put more emphasis on park-level data collection systems for EIP compliance. This could include the requirement for EIPs to conduct periodic assessments of economic, social, and environmental impacts within and beyond park gates, or to establish real-time environmental monitoring systems and publish the data collected on a common platform that would enable a comparison of IPs based on their environmental perfor-mance. Such results could be summarized in a yearly environmental report, a common platform, or a nation-wide ranking, which could help enhance park performance transparency and public engagement, strengthen incentives to improve environmental performance, and help build consensus on which indicators should be monitored and enforced at the institutional level.

5. Strengthen enforcement of existing regulations. While China has made considerable progress in building a comprehensive green regulatory framework for industrial parks, many of the regulations are not always fully enforced. This is because of several reasons, including insufficient administrative capacity, lack of clarity of the regulations or lack of strong incentives for local authorities to enforce the environmental regulations if they could undermine economic targets. The solution could be to further strengthen the local government capacity by allocating additional resources and providing relevant trainings, simplifying the regulations, and enhancing the transparency of IPs’ environmental performance to “name and shame” those IPs that do not meet the standards. Finally, a stronger central government’s supervision over IPs performance could also be useful.

6. Consider adopting a specific Law on IP Management. Although China has a comprehensive regulatory framework in place, it seems to suffer from excessive complexity, fragmentation, and possible duplication. To alleviate these concerns, the adoption of a stand-alone legislative act to promote efficient management of IPs and support their green transformation may be beneficial. Several countries, such as Korea, Turkey, and Vietnam, have adopted such laws to provide a clearer and more systematic legislative framework and could share their experience with China.

51

7. Leverage green finance for EIP development. As China continues to develop its green financial system, it will be important to ensure that green finance is fully leveraged to support the development of EIPs. The policy push to develop green credit, bonds, and PPPs should be well coordinated with the EIP strategy to ensure that sufficient financial resources can be channeled to meet the large need for green infrastructure projects in EIPs. To start, the main green credit and green bond initiatives could be reviewed to ensure that they give priority to projects supporting the greening of IPs and their tenants.

52

App

endi

xes

Plea

se n

ote

that

the

Engl

ish

trans

latio

n in

the

appe

ndix

es is

mea

nt o

nly

as a

refe

renc

e fo

r non

-Chi

nese

spea

kers

. Ple

ase

refe

r to

the

orig

inal

Chi

nese

text

s for

any

cla

rific

atio

ns.

App

endi

x A

. Reg

ulat

ory

fram

ewor

k of

IP m

anag

emen

t and

EIP

pro

mot

ion

in C

hina

Arti

cle

I-6:

“Fi

rms a

nd e

nter

pris

es sh

ould

pre

vent

or r

educ

e en

viro

nmen

tal

pollu

tion

and

ecol

ogic

al d

egra

datio

n, a

nd sh

ould

be

lega

lly re

spon

sibl

e fo

r the

da

mag

e ca

used

.”

Arti

cle

II-1

9: “

Any

indu

stria

l pro

ject

whi

ch w

ould

pot

entia

lly c

ause

env

ironm

en-

tal i

mpa

cts s

houl

d b

e ap

prov

ed b

y an

env

ironm

enta

l im

pact

ass

essm

ent (

EIA

).”

Arti

cle

IV-4

0: “

Firm

s and

ent

erpr

ises

shou

ld p

riorit

ize

the

use

of c

lean

ene

rgy,

le

ss-p

ollu

ting

tech

nolo

gies

and

equ

ipm

ent,

and

tech

nolo

gies

that

ena

ble

com

pre-

hens

ive

use

and

harm

less

dis

posa

l of w

aste

.”

Arti

cle

IV-4

1: “

Indu

stria

l pro

ject

s sho

uld

be c

onst

ruct

ed to

geth

er w

ith p

ollu

tion

cont

rol f

acili

ties,

and

shou

ld b

e de

sign

ed, i

nsta

lled,

and

app

lied

sim

ulta

neou

sly.

”

Arti

cle

IV-4

2: “

Ente

rpris

es th

at p

rodu

ce p

ollu

tion

shou

ld p

erfo

rm d

ue d

ilige

nce

in

prev

entin

g an

d co

ntro

lling

the

prod

uctio

n of

was

te g

as, w

aste

wat

er, s

olid

was

te,

etc.

”

Arti

cle

IV-4

6: “

The

use

and

sale

of i

ndus

trial

tech

nolo

gies

, equ

ipm

ent,

and

prod

ucts

whi

ch c

ause

seve

re e

nviro

nmen

tal p

ollu

tion

are

stric

tly fo

rbid

den.

”

Cha

pter

VI:

“Ent

erpr

ises

that

vio

late

the

artic

les o

f Law

of E

nviro

nmen

tal

Prot

ectio

n sh

ould

be

held

lega

lly re

spon

sibl

e ba

sed

on re

leva

nt re

gula

tions

.”

Law

s

Envi

ronm

enta

l

Prot

ectio

n La

w

(NPC

201

5)

NPC

Janu

ary

1, 2

015

53

Arti

cle

III-

16: “

Indu

stria

l/con

stru

ctio

n pr

ojec

ts sh

ould

be

appr

oved

by

an E

IA

befo

re th

e co

nstru

ctio

n/pr

oduc

tion

star

ts.”

Arti

cle

III-

17: “

An

EIA

repo

rt of

indu

stria

l/con

stru

ctio

n pr

ojec

ts sh

ould

incl

ude:

ba

sic

info

rmat

ion

abou

t the

pro

ject

; inf

orm

atio

n ab

out t

he su

rrou

ndin

g en

viro

n-m

enta

l of t

he p

roje

ct; a

naly

sis,

pred

ictio

n, a

nd a

sses

smen

t of p

oten

tial e

nviro

n-m

enta

l im

pact

s cau

sed

by th

e pr

ojec

t; te

chno

logi

cal a

nd e

cono

mic

dem

onst

ratio

n of

the

mea

sure

s tak

en b

y th

e pr

ojec

t ope

rato

r to

prot

ect t

he e

nviro

nmen

t; co

st-b

en-

efit

anal

ysis

of t

he e

nviro

nmen

tal i

mpa

cts c

ause

d by

the

proj

ect;

sugg

estio

ns

rega

rdin

g th

e ap

prop

riate

leve

l of e

nviro

nmen

tal s

uper

visi

on o

n th

e pr

ojec

t; co

nclu

sion

s of t

he E

IA.”

Arti

cle

III-

27: “

Whe

n th

e co

nstru

ctio

n an

d op

erat

ion

of th

e in

dust

rial p

roje

ct d

oes

not c

onfo

rm to

the

EIA

repo

rt su

bmitt

ed, a

seco

nd E

IA sh

ould

be

cond

ucte

d.

Cor

rect

ive

sugg

estio

ns sh

ould

be

prov

ided

to th

e pr

ojec

t ope

rato

r to

conf

orm

to

the

orig

inal

EIA

repo

rt.”

Cha

pter

IV: “

Ente

rpris

es th

at v

iola

te th

e ar

ticle

s of E

nviro

nmen

tal I

mpa

ct A

sses

s-m

ent L

aw sh

ould

be

held

lega

lly re

spon

sibl

e ba

sed

on re

leva

nt re

gula

tions

”A

rticl

e II

I-18

: “A

n EI

A sh

ould

be

cond

ucte

d fo

r all

new,

retro

fitte

d, a

nd e

xten

sion

in

dust

rial p

roje

cts.

The

mat

eria

ls u

sed

for p

rodu

ctio

n, th

e co

mpr

ehen

sive

use

of

reso

urce

s, an

d th

e di

spos

al a

nd m

anag

emen

t of w

aste

shou

ld b

e an

alyz

ed a

nd

tech

nolo

gies

and

equ

ipm

ent w

hich

hav

e hi

gh re

sour

ce-e

ffici

ency

and

low

was

te

prod

uctio

n sh

ould

be

prio

ritiz

ed,”

Arti

cle

III-

24: “

The

cons

truct

ion

of in

dust

rial p

roje

cts s

houl

d be

des

igne

d an

d bu

ilt u

sing

ene

rgy-

savi

ng a

nd w

ater

-sav

ing

mat

eria

ls.”

Arti

cle

III-

26: “

Whe

n ec

onom

ical

ly a

nd te

chni

cally

feas

ible

, sol

id w

aste

and

w

aste

hea

t fro

m p

rodu

ctio

n sh

ould

be

recy

cled

and

reus

ed b

y ei

ther

the

indu

stria

l pr

ojec

t its

elf o

r oth

ers.”

Arti

cle

III-

28: “

Firm

s and

ent

erpr

ises

shou

ld c

aref

ully

supe

rvis

e th

e re

sour

ce u

se

and

was

te p

rodu

ctio

n du

ring

the

prod

uctio

n pr

oces

s.”C

hapt

er V

: “En

terp

rises

that

vio

late

the

artic

les o

f Law

of C

lean

Pro

duct

ion

Prom

otio

n sh

ould

be

held

lega

lly re

spon

sibl

e ba

sed

on re

leva

nt re

gula

tions

”

NPC

NPC

Envi

ronm

en-

tal I

mpa

ct

Ass

essm

ent

Law

(NPC

201

6c)

Cle

aner

Pr

oduc

tion

Prom

otio

n La

w

(NPC

201

2)

Sept

embe

r 1,

2016

July

1, 2

012

54

Arti

cle

III-

20: “

Indu

stria

l ent

erpr

ises

shou

ld u

se w

ater

-sav

ing

tech

nolo

gies

and

fa

cilit

ies i

n pr

oduc

tion.

Wat

er u

sage

shou

ld b

e m

onito

red

thro

ugho

ut th

e pr

oduc

-tio

n pr

oces

s.”A

rticl

e IV

-29:

“A

ll IP

s sho

uld

orga

nize

all

firm

s with

in th

e pa

rks t

o co

mpr

ehen

-si

vely

use

reso

urce

s for

pro

duct

ion

and

prom

ote

the

deve

lopm

ent o

f circ

ular

ec

onom

y.”

“IPs

are

enc

oura

ged

to p

artic

ipat

e in

the

exch

ange

and

util

izat

ion

of w

aste

, gr

adie

nt u

tiliz

atio

n of

ene

rgy,

inte

nsiv

e us

e of

land

, and

circ

ular

use

of w

ater

”;

“inf

rast

ruct

ure

and

othe

r equ

ipm

ent a

re e

ncou

rage

d to

be

shar

ed a

mon

g fir

ms.”

“All

IPs s

houl

d le

gally

con

duct

EIA

s and

und

erta

ke n

eces

sary

mea

sure

s of

envi

ronm

enta

l pro

tect

ion

and

pollu

tion

cont

rol t

o m

ake

sure

the

envi

ronm

enta

l qu

ality

with

in th

e IP

s mee

ts re

leva

nt re

quire

men

ts.”

Arti

cle

I-5:

“Fi

rms a

nd e

nter

pris

es w

hose

was

te d

ispo

sal o

r sto

rage

doe

s not

mee

t th

e na

tiona

l or l

ocal

env

ironm

enta

l req

uire

men

ts sh

ould

pay

an

envi

ronm

enta

l ta

x.”

Cha

pter

II: “

Firm

s and

ent

erpr

ises

who

se a

ir em

issi

ons,

wat

er p

ollu

tion,

solid

w

aste

pro

duct

ion,

and

indu

stria

l noi

se p

ollu

tion

exce

ed th

e re

fere

nce

leve

l (r

equi

red

by th

is L

aw) s

houl

d pa

y an

env

ironm

enta

l tax

acc

ordi

ng to

the

emis

sion

le

vels

of p

ollu

tant

s.”A

rticl

e II

I-21

: “Fi

rms a

nd e

nter

pris

es th

at p

rodu

ce in

dust

rial w

aste

wat

er sh

ould

ob

tain

an

‘em

issi

on p

erm

it’ b

efor

e em

ittin

g w

aste

wat

er.”

Arti

cle

IV-4

4: “

Indu

stria

l firm

s sho

uld

redu

ce th

e em

issi

on o

f was

te w

ater

and

po

lluta

nts b

y up

grad

ing

was

te w

ater

trea

tmen

t tec

hnol

ogie

s and

reus

ing

was

te

wat

er to

the

max

imum

ext

ent.”

Arti

cle

IV-4

5: “

Indu

stria

l firm

s sho

uld

take

effe

ctiv

e m

easu

res t

o co

llect

and

m

anag

e al

l the

was

te w

ater

cre

ated

to p

reve

nt e

nviro

nmen

tal p

ollu

tion.

Tox

ic

indu

stria

l was

te w

ater

shou

ld b

e co

llect

ed a

nd m

anag

ed se

para

tely

and

is n

ot

allo

wed

to b

e em

itted

afte

r dilu

tion”

; “in

dust

rial z

ones

shou

ld b

uild

thei

r ow

n w

aste

wat

er tr

eatm

ent f

acili

ties,

inst

all a

utom

atic

mon

itorin

g sy

stem

s, co

nnec

t the

sy

stem

with

the

loca

l env

ironm

enta

l pro

tect

ion

depa

rtmen

t’s su

perv

isio

n sy

stem

, an

d en

sure

the

effe

ctiv

e op

erat

ion

of th

e sy

stem

.” “

Indu

stria

l was

te w

ater

shou

ld

be p

re-tr

eate

d be

fore

bei

ng e

mitt

ed in

to w

aste

wat

er tr

eatm

ent f

acili

ties.”

Arti

cle

IV-4

8: “

Indu

stria

l firm

s sho

uld

appl

y cl

ean

prod

uctio

n te

chno

logi

es to

m

ake

mor

e ef

fect

ive

use

of ra

w m

ater

ials

and

redu

ce th

e cr

eatio

n of

was

te w

ater

.”

NPC

NPC

NPC

Circ

ular

Ec

onom

y Pr

omot

ion

Law

(N

PC 2

009a

)

Envi

ronm

en-

tal P

rote

ctio

n Ta

x La

w(N

PC 2

018)

Wat

er

Pollu

tion

Prev

entio

n an

d C

ontro

l La

w(N

PC 2

017)

Janu

ary

1,

2009

Janu

ary

1,

2018

June

27,

201

7

55

Arti

cle

III-

19: “

Indu

stria

l firm

s tha

t em

it in

dust

rial a

ir po

lluta

nts (

liste

d in

Arti

cle

78 o

f thi

s Law

) sho

uld

obta

in e

mis

sion

per

mits

bef

ore

emitt

ing

pollu

tant

s.”A

rticl

e II

I-24

: “In

dust

rial f

irms t

hat e

mit

indu

stria

l air

pollu

tant

s (lis

ted

in A

rticl

e 78

of t

his L

aw) s

houl

d in

stal

l and

effe

ctiv

ely

use

real

-tim

e au

tom

atic

air

pollu

tant

m

onito

ring

syst

ems,

conn

ect t

he sy

stem

with

loca

l env

ironm

enta

l pro

tect

ion

depa

rtmen

t’s su

perv

isio

n sy

stem

, and

kee

p th

e in

form

atio

n pu

blic

at a

ll tim

es.”

Arti

cle

IV-4

3: “

Indu

stria

l firm

s tha

t em

it TS

P (to

tal s

uspe

nded

par

ticul

ates

), SO

x (s

ulfu

r oxi

des)

, and

NO

x (n

itrog

en o

xide

s) sh

ould

app

ly c

lean

pro

duct

ion

tech

nol-

ogie

s and

inst

all p

ollu

tant

con

trol f

acili

ties t

o re

duce

air

emis

sion

s to

the

max

i-m

um e

xten

t.”

“Ind

ustri

al fi

rms s

houl

d re

cycl

e co

mbu

stib

le w

aste

gas

cre

ated

dur

ing

indu

stria

l pr

oduc

tion.

”A

rticl

e II

I-31

: “In

dust

rial f

irms s

houl

d se

lect

raw

mat

eria

ls, e

nerg

y, a

nd o

ther

re

sour

ces—

as w

ell a

s app

ly a

dvan

ced

prod

uctio

n te

chno

logi

es –

that

redu

ce th

e cr

eatio

n of

indu

stria

l sol

id w

aste

and

low

er th

e ha

rm b

roug

ht b

y in

dust

rial s

olid

w

aste

.”A

rticl

e II

I-32

: “In

dust

rial f

irms s

houl

d re

port

accu

rate

info

rmat

ion

on th

e ty

pe,

amou

nt, f

low

dire

ctio

n, st

orag

e, a

nd d

ispo

sal o

f ind

ustri

al so

lid w

aste

to lo

cal

envi

ronm

enta

l pro

tect

ion

depa

rtmen

ts.”

Arti

cle

III-

33: “

Indu

stria

l firm

s sho

uld

mak

e ef

fect

ive

use

of so

lid w

aste

cre

ated

ba

sed

on th

eir e

cono

mic

and

tech

nolo

gica

l con

ditio

ns. F

or so

lid w

aste

that

can

not

be u

tiliz

ed, s

peci

fic p

lace

s for

safe

stor

age

or h

arm

less

dis

posa

l of s

olid

was

te

shou

ld b

e bu

ilt.”

Arti

cle

IV-1

7: “

Firm

s and

ent

erpr

ises

are

enc

oura

ged

to u

se so

lar-p

ower

ed w

ater

he

atin

g sy

stem

, sol

ar h

eatin

g an

d co

olin

g sy

stem

, and

sola

r PV

(pho

tovo

ltaic

) sy

stem

s.”A

rticl

e II

I-30

: “H

igh

ener

gy-c

onsu

min

g in

dust

rial f

irms s

houl

d up

grad

e th

eir

prod

uctio

n te

chno

logi

es to

be

‘ene

rgy-

savi

ng.’”

Arti

cle

III-

31: “

Indu

stria

l firm

s are

enc

oura

ged

to a

pply

adv

ance

d en

ergy

use

m

onito

ring

syst

ems a

nd e

nerg

y us

e co

ntro

l tec

hnol

ogie

s.”

NPC

NPC

NPC

NPC

Air

Pollu

tion

Prev

entio

n an

d C

ontro

l La

w(N

PC 2

016a

)

Law

on

the

Prev

entio

n an

d C

ontro

l of

Env

iron-

men

tal

Pollu

tion

by

Solid

Was

te

(NPC

201

6d)

Ren

ewab

le

Ener

gy L

aw(N

PC 2

009)

Ener

gy

Con

serv

atio

n La

w(N

PC 2

016b

)

Janu

ary

1,

2016

Nov

embe

r 7,

2016

Dec

embe

r 26,

20

09

July

2, 2

016

56

Reg

ulat

ions

Nat

iona

l Po

licie

s

Mea

sure

III:

“Pro

mot

e cl

ean

prod

uctio

n: a

ir po

lluta

nt e

mis

sion

s fro

m k

ey in

dust

ri-al

sect

ors s

houl

d be

redu

ce b

y at

leas

t 30

perc

ent.”

Mea

sure

V: “

Con

stru

ctio

n of

any

new

pro

ject

is n

ot a

llow

ed b

efor

e be

ing

appr

oved

by

an E

IA.”

Mea

sure

VII

: “En

act m

ore

strin

gent

law

s, re

gula

tions

, and

stan

dard

s reg

ardi

ng a

ir po

lluta

nt e

mis

sion

to ‘f

orce

’ mor

e ra

pid

indu

stria

l upg

radi

ng.”

Arti

cle

I-1:

“W

ater

pol

lutio

n m

anag

emen

t in

indu

stria

l zon

es is

key

and

shou

ld b

e fu

rther

enh

ance

d”; “

indu

stria

l was

te w

ater

in in

dust

rial z

ones

mus

t be

pret

reat

ed to

m

eet r

elev

ant r

equi

rem

ents

bef

ore

emitt

ing

into

was

te w

ater

trea

tmen

t fac

ilitie

s.;

“For

bot

h ne

w a

nd re

trofit

ting

indu

stria

l zon

es, w

aste

wat

er tr

eatm

ent f

acili

ties

mus

t be

desi

gned

and

bui

lt si

mul

tane

ousl

y.”

“Ind

ustri

al z

ones

shou

ld in

stal

l rea

l-tim

e au

tom

atic

mon

itorin

g sy

stem

s for

was

te

wat

er e

mis

sion

s.”A

rticl

e II

-5: “

Phas

e ou

t out

date

d in

dust

rial p

rodu

ctio

n fa

cilit

ies a

nd te

chno

logi

es

and

ensu

re th

at n

ew fa

cilit

ies a

nd te

chno

logi

es m

eet t

he la

test

env

ironm

enta

l re

quire

men

ts.”

Arti

cle

II-7

: “Pr

omot

e th

e re

cycl

e an

d re

use

of in

dust

rial w

aste

wat

er. I

ndus

trial

pr

oduc

tion

shou

ld p

riorit

ize

the

use

of re

cycl

ed w

ater

.”A

rticl

e V

I-18

: “In

dust

rial p

rodu

ctio

n th

at p

rodu

ces h

eavy

met

al a

re e

ncou

rage

d to

ap

ply

adva

nced

and

app

ropr

iate

pro

duct

ion

tech

nolo

gies

. By

2020

, hea

vy m

etal

em

issi

on fr

om in

dust

rial p

rodu

ctio

n m

ust b

e at

leas

t 10

perc

ent l

ower

than

201

3 le

vel.”

“I

ndus

trial

solid

was

te sh

ould

be

prop

erly

trea

ted

or d

ispo

sed

to p

reve

nt le

akag

e in

to th

e so

il.”

Sect

ion

1, p

arag

raph

2: “

Dev

elop

men

t mus

t be

gree

n, c

ircul

ar, a

nd lo

w-c

arbo

n de

velo

pmen

t. A

bal

ance

bet

wee

n ec

onom

ic d

evel

opm

ent a

nd e

nviro

nmen

tal

prot

ectio

n sh

ould

be

achi

eved

.”Se

ctio

n 1,

par

agra

ph 3

: “Fu

rther

enh

ance

the

cont

rol a

nd m

anag

emen

t of i

ndus

trial

po

llutio

n.”

Sect

ion

5, p

arag

raph

18:

“G

radu

ally

est

ablis

h th

e ‘q

uota

man

agem

ent s

chem

e’ o

f in

dust

rial w

ater

usa

ge fo

r ind

ustri

es th

at c

onsu

me

larg

e am

ount

s of w

ater

.”Se

ctio

n 5,

par

agra

ph 2

6: “

Furth

er im

prov

e th

e re

use

and

recy

cle

of re

sour

ces a

nd

mat

eria

ls. F

or c

erta

in ra

w m

ater

ials

, man

ufac

ture

rs a

re re

quire

d to

use

a c

erta

in

perc

enta

ge o

f mat

eria

ls th

at a

re re

gene

rate

d fr

om u

sed

mat

eria

ls o

r res

ourc

es.”

Ten

Mea

sure

s of

Air

Pollu

tion

Prev

entio

n an

d Co

ntro

l(S

tate C

ounc

il 20

13)

Acti

on P

lan fo

r W

ater P

ollu

tion

Prev

entio

n an

d Co

ntro

l(S

tate C

ounc

il 20

15a)

Acti

on P

lan fo

r So

il Po

llutio

n Pr

even

tion

and

Cont

rol

(Stat

e Cou

ncil

2016

b)

Gen

eral

Gui

delin

e on

the I

ndus

trial

Refo

rm o

f Ec

olog

ical

Civi

lizati

on(S

tate C

ounc

il 20

15c)

State

Co

uncil

State

Co

uncil

State

Co

uncil

June

14,

201

3

MEE

Apr

il 16

, 201

5

May

28,

201

6

Sept

embe

r 2

1, 2

015

57

Sect

ion

3, p

arag

raph

5 p

ropo

ses t

o pr

omot

e gr

een

man

ufac

turin

g an

d es

tabl

ish

a gr

een

man

ufac

turin

g sy

stem

, inc

ludi

ng th

e de

velo

pmen

t of g

reen

IPs:

“…

to

deve

lop

gree

n IP

s and

pro

mot

e in

dust

rial s

ymbi

osis

with

in IP

s… su

ppor

t gre

en

firm

s tha

t im

plem

ent g

reen

dev

elop

men

t stra

tegy

, gre

en st

anda

rds,

gree

n m

anag

e-m

ent,

and

gree

n pr

oduc

tion.

”Th

e “M

ade

in C

hina

202

5” p

roje

ct a

lso

prop

oses

to e

stab

lish

100

gree

n de

mon

-st

ratio

n IP

s and

1,0

00 g

reen

dem

onst

ratio

n fa

ctor

ies b

y 20

20.

Arti

cle

43-1

: “Pr

omot

e en

ergy

savi

ng in

indu

stria

l sec

tors

.”A

rticl

e 43

-5: “

Prom

ote

and

acce

lera

te th

e ‘c

ircul

ar e

cono

my

trans

form

atio

n’ in

IP

s. Pr

omot

e in

dust

rial s

ymbi

osis

bet

wee

n en

terp

rises

and

bet

wee

n in

dust

ries.”

Arti

cle

44-2

: “Im

plem

ent p

lans

and

pol

icie

s tha

t ens

ure

all i

ndus

trial

pol

lute

rs

mee

t em

issi

on st

anda

rds.”

“E

nhan

ce th

e su

perv

isio

n on

indu

stria

l pol

lutio

n an

d pu

blis

h th

e na

mes

of i

ndus

-tri

al fi

rms w

hich

do

not m

eet e

mis

sion

stan

dard

s.”A

rticl

e 46

-1: “

Effe

ctiv

ely

cont

rol c

arbo

n em

issi

ons f

rom

the

indu

stria

l sec

tor a

nd

prom

ote

low

-car

bon

deve

lopm

ent o

f the

indu

stria

l sec

tor.”

Sect

ion

1, “

key

obje

ctiv

es”:

“Es

tabl

ish

a pr

elim

inar

y gr

een,

circ

ular

, and

low

-car

-bo

n in

dust

ry sy

stem

. To

achi

eve

circ

ular

pro

duct

ion

of e

nter

pris

es, [

prom

ote]

ci

rcul

ar d

evel

opm

ent o

f IPs

, and

circ

ular

com

bina

tion

of d

iffer

ent i

ndus

tries

so

that

reso

urce

effi

cien

cy is

incr

ease

d an

d w

aste

gen

erat

ion

is re

duce

d.”

Sect

ion

2, p

arag

raph

5: “

Des

ign

spec

ific

circ

ular

eco

nom

y de

velo

pmen

t pla

ns fo

r ne

w a

nd re

trofit

ted

IPs t

o m

eet t

he re

quire

men

ts o

f hav

ing

‘rea

sona

ble

spat

ial

arra

ngem

ent,

optim

al in

dust

ry st

ruct

ure,

circ

ular

indu

stry

cha

ins,

effic

ient

reso

urce

us

e, c

once

ntra

ted

pollu

tion

man

agem

ent,

gree

n in

fras

truct

ure,

and

nor

mal

ized

pa

rk o

pera

tion

and

man

agem

ent’

with

in IP

s. U

pgra

de e

xist

ing

IPs t

o m

ove

tow

ard

ci

rcul

ar e

cono

my

perf

orm

ance

, est

ablis

h ci

rcul

ar e

cono

my

indu

stria

l cha

in, a

nd

stre

ngth

en c

onne

ctio

ns b

etw

een

ente

rpris

es a

nd b

etw

een

indu

strie

s.”Se

ctio

n 5,

par

agra

ph 1

7: “

Esta

blis

h ci

rcul

ar e

cono

my

perf

orm

ance

eva

luat

ion

syst

ems b

ased

on

the

two

indi

cato

rs: r

esou

rce

prod

uctiv

ity a

nd th

e re

sour

ce

recy

clin

g ra

te. C

ondu

ct e

valu

atio

n of

IPs r

egul

arly

on

thei

r circ

ular

eco

nom

y pe

rfor

man

ce.”

Sect

ion

7, p

arag

raph

25:

“D

raft

and

impl

emen

t an

Act

ion

Plan

on

Circ

ular

Ec

onom

y U

pgra

de fo

r IPs

. Eac

h pr

ovin

ce sh

ould

dra

ft an

d im

plem

ent i

ts o

wn

prov

inci

al a

ctio

n pl

ans.

Enco

urag

e th

e na

tiona

l EIP

s to

lead

the

“circ

ular

eco

nom

y up

grad

e” a

nd in

clud

e th

e ev

alua

tion

of th

is u

pgra

de in

the

gene

ral I

P as

sess

men

t sc

hem

e. B

y 20

20, a

“ci

rcul

ar e

cono

my

upgr

ade

is p

lann

ed to

get

star

ted

in 7

5 pe

rcen

t of n

atio

nal I

Ps a

nd 5

0 pe

rcen

t of p

rovi

ncia

l IPs

.”

Not

ice b

y th

e St

ate C

ounc

il on

the “

Mad

e in

Chi

na 2

025”

Pr

ojec

t(S

tate C

ounc

il 20

15b)

13th F

ive-

Year

Pl

an o

n th

e Ec

onom

ic an

d So

cial

Dev

elopm

ent

of th

e Peo

ple’s

Re

publ

ic of

Ch

ina

(ND

RC 2

016b

)

Acti

on P

lan fo

r Le

adin

g Ci

rcul

ar

Econ

omy

Dev

elop-

men

t(ND

RC

2017

)

State

Co

uncil

ND

RC

ND

RC

May

8,

2015

Mar

ch

16, 2

016

Apr

il 21

, 20

17

58

59

Stan

dard

s &

in

dica

tors

The

Gui

delin

es c

lear

ly in

trodu

ce th

e re

quire

men

ts a

nd p

roce

dure

of a

pplic

atio

n,

esta

blis

hmen

t, ap

prov

al, p

erfo

rman

ce c

heck

, and

man

agem

ent f

or a

n or

dina

ry IP

to

bec

ome

a na

tiona

l EIP

. Sup

porti

ve p

olic

ies f

or b

ecom

ing

EIPs

are

brie

fly

intro

duce

d, a

nd n

egat

ive

cons

eque

nces

for a

ppro

ved

EIPs

to fa

il to

mai

ntai

n go

od

perf

orm

ance

are

des

crib

ed a

s wel

l.

The

Gui

ding

Not

ice

spec

ifica

lly c

over

s the

dev

elop

men

t and

pro

mot

ion

of E

IPs i

n C

hina

, des

crib

ing

the

sign

ifica

nce,

gen

eral

requ

irem

ents

, key

obj

ectiv

es a

nd ta

sks,

supp

ortiv

e po

licie

s, an

d m

easu

res f

or e

stab

lishi

ng E

IPs.

The

Plan

out

lines

the

blue

prin

t for

the

gree

n de

velo

pmen

t of C

hina

’s in

dust

rial

sect

or d

urin

g th

e 13

th F

ive-

Year

Pla

n pe

riod.

The

est

ablis

hmen

t of a

gre

en

man

ufac

turin

g sy

stem

is a

mon

g th

e te

n ke

y ob

ject

ives

, inc

ludi

ng th

e co

nstru

ctio

n of

gre

en IP

s (to

geth

er w

ith th

e de

velo

pmen

t of g

reen

pro

duct

s, gr

een

fact

orie

s, an

d gr

een

indu

stria

l cha

ins)

. The

Pla

n pr

opos

es to

est

ablis

h 10

0 re

pres

enta

tive

and

high

-leve

l dem

onst

ratio

n gr

een

IPs b

y 20

20.

The

Stan

dard

est

ablis

hes e

valu

atin

g m

etho

ds, i

ndic

ator

s, an

d m

etho

ds fo

r dat

a co

llect

ion

and

the

calc

ulat

ion

met

hod

of in

dica

tors

.

It is

use

d as

a re

fere

nce

for t

he a

sses

smen

t and

eva

luat

ion

of N

atio

nal D

emon

stra

-tio

n EI

Ps (w

heth

er a

n EI

P is

qua

lifie

d as

a N

atio

nal D

emon

stra

tion

EIP)

, whi

ch

faci

litat

es th

e co

nstru

ctio

n an

d m

anag

emen

t of E

IPs.

App

endi

x 2

of th

is N

otic

e in

trodu

ces t

he re

quire

men

ts fo

r the

eva

luat

ion

of

“Gre

en IP

s” (w

hat r

equi

rem

ents

shou

ld b

e m

et to

qua

lify

as a

“gr

een

IP”)

, the

qu

alifi

catio

n in

dica

tors

use

d to

eva

luat

e th

e “g

reen

ness

” of

IPs,

and

the

calc

ulat

ion

met

hods

for t

he “

gree

n in

dex

for I

Ps.”

MEE

, MO

C,

MO

ST

MEE

, MO

C,

MO

ST

MIIT

MEE

MIIT

Dec

embe

r 16,

20

15

Dec

embe

r 5,

2011

June

30,

201

6

Janu

ary

1, 2

016

Sept

embe

r 3,

2016

Gui

delin

es o

n th

e M

anag

emen

t of N

atio

nal

Eco-

Indu

stria

l Par

ks(M

EE, M

OC

, and

M

OST

201

5)

Guidi

ng N

otice

on S

treng

then-

ing th

e Dev

elopm

ent o

f Na

tiona

l Eco

-Indu

strial

Park

s(M

EE, M

OC, a

nd M

OSt 2

011)

Plan

for I

ndus

trial

Gre

en

Dev

elop

men

t (20

16−

2020

)(M

IIT

2016

c)

Stan

dard

for N

atio

nal

Dem

onst

ratio

n Ec

o-in

-du

stria

l Par

ks(M

EE 2

016)

Not

ice

on th

e Es

tabl

ish-

men

t of A

Gre

en

Man

ufac

turin

g Sy

stem

(MII

T 20

16b)

The

ND

RC

stan

dard

incl

udes

a to

tal o

f 31

indi

cato

rs, c

ateg

oriz

ed in

to 8

gro

ups:

re

sour

ce p

rodu

ctiv

ity (5

); re

sour

ce c

onsu

mpt

ion

(5);

com

preh

ensi

ve u

tiliz

atio

n of

re

sour

ces (

5); p

ollu

tant

em

issi

ons (

8); o

ther

indi

cato

rs (3

); ch

arac

teris

tic in

dica

tors

(to

be

fille

d in

by

indu

stria

l par

ks (5

); pr

ojec

ts su

bsid

ized

by

cent

ral g

over

nmen

t fin

ance

(3);

and

self-

impl

emen

ted

proj

ects

(2).

The

stan

dard

em

phas

izes

the

circ

ular

eco

nom

y pe

rfor

man

ce o

f IPs

, lea

ding

to a

fo

cus o

n re

sour

ce p

rodu

ctiv

ity, e

ffici

ency

, and

pol

luta

nt e

mis

sion

s.

The

stan

dard

doe

s not

set t

arge

t val

ue fo

r ind

icat

ors.

Inst

ead,

it p

rovi

des a

n in

form

atio

n sh

eet f

or IP

s’ se

lf-as

sess

men

t aga

inst

thei

r pre

viou

s per

form

ance

and

es

timat

ed fu

ture

pro

gres

s.

The

Spec

ifica

tion

esta

blis

hes t

he b

asic

requ

irem

ents

for C

ircul

ar E

cono

my

Perf

orm

ance

Eva

luat

ion

of IP

s, th

e in

dica

tors

for t

he e

valu

atio

n—na

mel

y, th

e “r

esou

rce

prod

uctiv

ity”

(eco

nom

ic o

utpu

t/res

ourc

e in

put)

and

“res

ourc

e re

cycl

ing

rate

” (r

ecyc

led

reso

urce

s/to

tal w

aste

cre

ated

) — a

nd th

e ca

lcul

atio

n m

etho

d of

the

“Circ

ular

Eco

nom

y In

dex.

” It

is u

sed

to e

valu

ate

the

circ

ular

eco

nom

y pe

rfor

-m

ance

of n

atio

nal a

nd p

rovi

ncia

l ind

ustri

al z

ones

/par

ks.

Not

ice o

n Re

com

men

d-in

g K

ey

Cand

idate

In

dustr

ial P

arks

fo

r Circ

ular

Ec

onom

y Tr

ansfo

rmati

on

in 2

017

(NRD

C an

d M

OF

2017

b)

Spec

ifica

tion

for C

ircul

ar

Econ

omy

Perfo

rman

ce

Evalu

ation

of

Indu

strial

Par

ks(C

NIS

201

7)

ND

RC,

MO

F

CNIS

Mar

ch 2

9,

2017

Mar

ch 1

, 201

7

Sour

ce: W

orld

Ban

k co

mpi

latio

ns.

Not

e: P

leas

e not

e tha

t the

Eng

lish

trans

latio

n in

the a

ppen

dix

is m

eant

onl

y as

a re

fere

nce f

or n

on-C

hine

se sp

eake

rs. P

leas

e ref

er to

the o

rigin

al C

hine

se te

xts f

or cl

arifi

catio

n.

CNIS

=Ch

ina N

atio

nal I

nstit

ute o

f Sta

ndar

diza

tion;

EIA

= en

viro

nmen

tal i

mpa

ct as

sess

men

t; EI

P =

eco-

indu

stria

l par

k; IP

= in

dustr

ial p

ark;

M

EE =

Min

istry

of E

nviro

nmen

tal P

rote

ctio

n; M

IIT =

Min

istry

of M

inist

ry o

f Ind

ustry

and

Info

rmat

ion

Tech

nolo

gy; M

OC

= M

inist

ry o

f Com

mer

ce;

MO

ST =

Min

istry

of S

cien

ce an

d Te

chno

logy

; ND

RC =

Nat

iona

l Dev

elop

men

t and

Ref

orm

Com

miss

ion;

NPC

= N

atio

nal P

eopl

e’s C

ongr

ess.

60

Appendix B. Standard for National Demonstration EIPs (MEE)

Category No Indicators Unit

Require

-

ment

Compulsory or

optional

Economic

development

1

Industrial output from high-

tech firms/total industrial

output

% ≥30

Meet at least 1

of these 4

requirements

2 Industrial added value (IAV)

per capita

RMB10,000

/person ≥15

3 IAV growth rate of the IP in

the past 3 years % ≥15

4

IAV generated from reuse and

recycling of resources/total

IAV

% ≥30

Industrial

symbiosis

5 Number of newly established

eco-industrial chains / ≥6 Compulsory

6 Comprehensive utilization

rate of industrial solid waste % ≥70 Meet at least 1

of these 2

requirements 7 Circular utilization rate of

reusable resources % ≥80

Resource

saving

8 IAV per unit of land for

industrial use

RMB100

million /km2 ≥9

Meet at least 1

of these 2

requirements 9

Growth rate of IAV per unit

of land for industrial use in

the past 3 years

% ≥6

10 Energy consumption elasticity

rate

Annual

growth rate

of total

energy

consump-

tion/annual

growth rate

of IAV)

≤0.6

when

IAV

growth

rate is

positive;

≥0.6

when

IAV

growth

Compulsory

Resource saving

61

Resource

saving

10 Energy consumption elasticity

rate

Annual

growth rate

of total

energy

consump-

tion/annual

growth rate

of IAV)

≤0.6

when

IAV

growth

rate is

positive;

≥0.6

when

IAV

growth

rate is

negative

Compulsory

11 Total energy consumption per

unit of IAV

Ton of

standard

coal/

RMB10,000

≤0.5 Meet at least 1

of these 2

requirements

12 % of renewable energy

consumption % ≥9

13 Fresh water usage elasticity

rate

Annual

growth rate

of fresh

water usage/

annual

growth rate

of IAV)

≤0.55

when

IAV

growth

rate is

positive;

≥0.55

when

IAV

growth

rate is

negative

Compulsory

14 Fresh water usage per unit of

IAV

m3/RMB10,

000 ≤8

Meet at least 1 of these 3 requirements

62

63

Environ-

mental

protection

17 Key pollution emitters in IPs

meet emission requirements Yes/No Yes Compulsory

18

Total emission of national and

local key pollutants in IPs

meet emission requirements

Yes/No Yes Compulsory

19

Number of extremely severe

and severe emergent

environmental accidents in IPs

Number 0 Compulsory

20

Soundness/completeness of

IPs’ environmental

management ability

% 100 Compulsory

21

Enforcement rate of clean

production verification for key

firms in IPs

% 100 Compulsory

22 Concentrated wastewater

treatment facilities Yes/No Yes Compulsory

23

Soundness/completeness of

IPs’ environmental risk

control system

% 100 Compulsory

24

Reuse and safe disposal rate

of industrial solid waste

(including dangerous waste)

% 100 Compulsory

Reuse rate of industrial waste water15

16

≥75

At least 20% for cities withwater shortage;30% for Jing-Jin-Ji region; and 10%for others

Meet at least 1 of these 3 requirements

%

%Reuse rate of reclaimed water

64

Informationdisclosure

Source: World Bank compilations.Note: Please note that the English translation in the appendix is meant only as a reference for non-Chinese speakers and readers. Please refer to the original Chinese texts for any clarifications. When the economic output of a certain industrial sector exceeds 70 percent of the total industrial output of an IP, it is considered a Level I industry under the clean production evaluation system, or internationally advanced level. IAV = industrial added value; IP = industrial park; MEE = Ministry of Ecology and Environment.

24

25

26

27

28

29

30

31

32

Reuse and safe disposal rate of industrial solid waste (includ-ing dangerous waste)

Emission elasticity rate of key pollutants

Annual growth rate of pollutant emission/annual growth rate of IAV)

≤0.3 when IAV growth rate is positive;≥0.3 when IAV growth rate is negative

Carbon emission abatement rate per unit of IAV

Wastewater emission per unit of IAV

Ton/RMB10,000

Ton/ RMB10,000 RMB

Times/year

Solid waste generation per unit of IAV

Green coverage rate (area covered by plants/total area of IP)

Environmental information disclosure rate for key firms in IPs

Soundness/completeness of ecological industry informa-tion platform

Promotional activities with the topic of ecological industry

% ≥3

≤7

≤0.1

≥15

100

100

≥2

%

%

%

Compulsory

Compulsory

Compulsory

Compulsory

Compulsory

Compulsory

Meet at least 1 of these 2 requirements

Appendix C. Basic requirements and performance indicators of applying for circular economy transfor-mation demonstration IPs (NDRC and MOF)

Basic requirements

Circular economy transformation demonstrations IPs must meet the following requirements from the National Development and Reform Commission (NDRC) and the Ministry of Finance (MOF):

- The applicant IP should have already submitted the Demand for Circular Economy Transformation during the 13th Five-Year Period a according to the requirements by the NDRC in the Notice on Conducting Surveys of the Demand of IPs for Circular Economy Transformation.b

- The recommended IPs from each province should be on the list of the Catalogue of Verified Development Zones in China,c or development zones that have been approved by the State Council since 2007, or national circular economy pilot zones that have already been verified since 2007.

- The applicant IP should be in line with the general plan of land use and the general plan of urban develop-ment.

- Projects within the applicant IP should accord with national industry policies.- The applicant IP should have clear boundaries and a managerial committee or an investment/operation entity

in place for park management.- The applicant IP should reach a certain level of industry basis and industrial scale.- The applicant IP should have relatively large potentials for land use.- The applicant IP has a relatively large amount of waste generation with relatively large potentials in the

“reduce, reuse, and recycle” of resource utilization and circular economy transformation.- The applicant IP has sound/complete infrastructure and environmental protection facilities that are in line

with national standards. The park has not had serious environmental pollution accidents or other unexpected incidents in the past three years.

- The applicant IP has the foundation for circular economy transformation, and has already started relevant preparation or work.

- Priority goes to IPs recommended by demonstration cities for fiscal policies in energy conservation and national demonstration cities or counties for circular economy development; national and provincial circular economy transformation pilots are prioritized.

65

Source: NDRC and MOF (2017b)Note: IP = industrial park.a. 十三五”循环化改造需求b. 国家发展改革委办公厅关于开展园区循环化改造需求调查的通知（发改办环资〔2016〕513号）c. 中国开发区审核公告目录（2007年第18号）

Table C.1 Performance indicators

Categories No. Indicators Unit

Resource

productivity

1 Total industrial output of the IP RMB10,000

2 *Resource productivity RMB10,000/ton

3 *Energy productivity RMB10,000/ton of standard coal

4 *Land productivity RMB10,000 /hectare

5 Water resource productivity RMB/m3

Resource

consumption

6 *Total energy consumption 10,000 tons of standard coal

7 *Total consumption of water

resources m3

8 *Water usage per unit of GDP m3/RMB10,000

9 Energy consumption per unit of

industrial output

Tons of standard

coal/RMB10,000

10 Key product I: energy consumption

per unit of production Tons of standard coal/ton

Key product I: water consumption

per unit of production m3/ton

Comprehen-

sive utilization

of resources

11 *Comprehensive utilization of

industrial solid waste 10,000 tons

12 *Comprehensive utilization rate of

industrial solid waste ％

13 *Reuse of industrial wastewater 10,000 m3

14 *Reuse rate of industrial wastewater ％

15 Comprehensive utilization of used

resources (including imports) 10,000 tons

Pollutant

emissions

16 *SO2 emission 10,000 tons

17 *COD emission 10,000 tons

18 *Ammonia and NOx emission 10,000 tons

66

Pollutant

emissions

19 *Nitride emission 10,000 tons

20 *CO2 emission per unit of local

economic output

Ton/

RMB10,000

21 Industrial solid waste generation 10,000 tons

22 Industrial solid waste disposal 10,000 tons

23 Industrial wastewater emission 10,000 m3

Other

indicators

24 *Connectivity of the IP’s circular

economy industrial chain ％

25 *Non-fossil fuel consumption / total

primary energy consumption ％

26 Ratio of renewable energy ％

Characteristic

indicators

Projects

subsidized by

central

government

finance

27 Number of projects Number

28 Total investment RMB10,000

29 Subsidy from central government

finance RMB10,000

Self-

implement

projects

30 Number of projects Number

31 Total investment RMB10,000

Pollutant emissions

67

Source: NDRC and MOF (2017c)Note：Please note that the English translation in the appendix is meant only as a reference for non-Chinese speakers and readers. Please refer to the original Chinese texts for any clarifications. Indicators marked with asterisks (*) are key indicators and must be filled in the table. IP = industrial park; CO2 = carbon dioxide; COD = Chemical Oxygen Demand; NOX = nitrogen oxide; SO2 = sulfur dioxide.

Appendix D. Requirements/Qualifications of Green IPs (MIIT)

Basic requirements

Green IPs must meet the following basic requirements from the Ministry of Industry and Information Technology (MIIT):

- IPs must comply with and effectively implement relevant regulations and policies on green, circular, and low-carbon economy that were established on both the national and provincial/municipal levels.

- IPs must have had no severe environmental accidents (resulting in major pollution or ecological damage) in the past three years.

- IPs must achieve the goal regarding energy efficiency and carbon reduction set by the national or provincial/-municipal government.

- The level of emissions of key pollutants must not exceed the limit set by national or provincial/municipal government.

- All key enterprises must pass the Clean Production Examination. Key enterprises are enterprises that are required by the Law of Clean Production Promotion to pass the Clean Production Examination.

- Enterprises should not use outdated technologies and equipment, or produce products, that are listed in “elim-ination directory.”

- A specific institute for green development should be established in the parks with at least two professionals.- Parks are encouraged to establish and operate environmental management systems, energy management

systems, and energy surveillance platforms.- Parks are encouraged to use renewable energy, such as wind and solar.

General

indicators No. Specific indicators

Reference

value

Compulsory

or optional

Energy

utilization

green index

(EG)

1 industrial added value (IAV)/energy input

ratio (RME10,000/tce) 3 Compulsory

2 renewable energy (%) 15 Compulsory

3 clean energy (%) 75 Compulsory

Resource

utilization

green index

(RG)

4 IAV/water input ratio (RMB/m3) 1,500 Compulsory

5 IAV/land use ratio (100 million RMB/km2) 15 Compulsory

6 solid waste that is comprehensively utilized

(%) 95 Compulsory

7 water (for industrial use) that is reused (%) 90 Compulsory

8 reclaimed water that is reused (%) 30 Select 2 out

of 4

68

Select 2 out

of 4

9 residual heat that is reused (%) 60

10 waste gas that is recycled/reused (%) 90

11 renewable resources that are reused (%) 80

Infrastructure

green index

(IG)

12 wastewater treatment facilities (Yes/No) Yes Compulsory

13 green buildings among all newly constructed

industrial buildings (%) 30

Select 1 out

of 2 14

green buildings among all newly constructed

public buildings (%) 60

15 park area that can be covered by public

transport (%) 90 Select 1 out

of 2 16 renewable energy public buses (%) 30

Industry green

index (CG)

17 IAV from high-tech industries/total IAV (%) 30 Compulsory

18 IAV from green industries/total IAV (%) 30 Compulsory

19 IAV per capita (RMB10,000/person) 15 Select 1 out

of 2 20 modern service industry (%) 30

Ecological

environment

green index

(HG)

21 industrial solid waste (dangerous waste

included) properly disposed and utilized (%) 100 Compulsory

22 carbon emission reduction % per RMB10,000

of IAV (%) 3 Compulsory

23 wastewater emission per IAV

(ton/RMB10,000) 5 Compulsory

24 elasticity rate of main pollutantsa 0.3 Compulsory

25 days when air quality falls into the first two

tiers (“Very good” and “Good”) (%) 80 Compulsory

26 green coverage rate (%) 30

Select 1 out

of 3

27 road area that is covered by tree shadows (%) 80

28 parking lot area that is covered by tree

shadow (%) 80

69

Method of calculating the IP green index and other green indexes

The IP green index is calculated as follows:

where: GI is the green index of IPs, EG is the energy utilization green index EGi is the index value of indicator i (within the EG category) of the IP, and EGbi is the reference value of indicator i (within the EG category).

This formula also applies to the: -Resource utilization green index (RG) -Infrastructure green index (IG) -Industry green index (CG) -Ecological environment green index (HG) -Management green index (MG).

Note: Please note that the English translation in the appendix is meant only as a reference for non-Chinese speakers and readers. Please refer to the original Chinese texts for any clarifications.

Management

green index

(MG)

29 soundness of the Green IP Standard System

(Sound/Not sound) Sound Compulsory

30 completed a development plan of the Green

IP (Yes/No) Yes Compulsory

31 soundness of the Green IP Information

Platform (Sound/Not sound) Sound Compulsory

70

Source: MIIT (2016b)Note: IAV = industrial added value; IP = industrial park; tce = ton of standard coal equivalenta.The elasticity rate of a certain pollutant = the annual rate of increase of emissions (%)/the annual growth rate of industrial added value (%); the elasticity rate of key pollutants = the sum of elasticity rates of pollutants/number of key pollutants.

Appendix E. Comparison of “China Green Triangle” against the EIP Framework

Table E.1 A detailed comparison of the three Chinese IP green standards

The EIP Framework MIIT NDRC MEE

Park management (prerequisites)

Topic Subtopic

Park

management

services

Park management entity

(Available [Yes/No])

√√√

BR-6

√√√

BR-5

√√√

EP-20

Park property, common

infrastructure and services

(Available [Yes/No])

√√

IG-12, BR-7

√√

BR-9

√

EP-22, ID-31

Monitoring

and risk

management

Monitoring performance and risks

(Available [Yes/No])

√√

MG-30, 31 ×

√√

EP-20, ID-30,

31

Information on applicable

regulations and standards

(Available [Yes/No])

√√

MG-29 ×

√√

ID-30, 31

Planning and

zoning

Master plan

(Available [Yes/No])

√√

MG-30, 31 ×

√

ID-31

Park management (performance indicators)

Topic Subtopic (unit [target value])

Park

management

services

Park management empowerment

(% of firms [100%]) × × ×

Park management entity property

and common infrastructure

(% of firms [75%])

× × ×

71

Monitoring

and risk

management

EIP performance and critical risk

management

(frequency of reports [every 6

months])

√√

MG-31

(frequency

not stated)

×

√√

EP-23, ID-31

(frequency not

stated)

Environment (prerequisites)

Topic Subtopic

Management

and

monitoring

Environmental/Energy

Management Systems (EMS and

EnMS, respectively)

(Available [Yes/No])

√

MG-31

(ISO

certified

standards not

stated)

×

√

EP-20, ID-31

(ISO certified

standards not

stated)

Energy

Energy efficiency

(Available [Yes/No])

√√

MG-29~31

(not

specifically

on energy

efficiency)

×

√

ID-30, 31

(no specific

programs in

place)

Exchange of waste heat energy

(Available [Yes/No])

√√

RG-9

(not strategy,

but

requirement)

√

CUR-15

(not

specificall

y on heat

recovery)

×

Water

Water efficiency, reuse and

recycling

(Available [Yes/No])

√√

RG-7,8

(not plan, but

requirement)

√√

CUR-

13,14

(not plan,

only

indicators

)

√√

RS-15,16

(not plan, but

requirement)

72

Climate

change and the

natural

environment

Air, GHG emissions and pollution

prevention

(Available [Yes/No])

√√

EG-2,3; HG-

22

(target for

carbon

reduction, no

monitoring

program

required for

other GHGs)

√

PE-20;

OI-25,26

(only

includes

CO2

emission

and

renewable

energy

indicators

)

√√

RS-12; EP-26

(target for

carbon

reduction, no

monitoring

program

required for

other GHGs)

Environmental assessment and

ecosystem services

(Available [Yes/No])

√

HG-26~28

(green

coverage in

particular)

×

√

EP-29

(green coverage

in particular)

Environment (performance indicators)

Topic Subtopic (unit [target value])

Management

and

monitoring

Environmental/Energy

Management Systems (EMS and

EnMS, respectively)

(% of firms with >250 employees

which have such systems [40%])

√

BR-7, MG-

31

(ISO

certified

standards not

stated)

×

√

EP-20, ID-31

(ISO certified

standards not

stated)

Energy

Energy consumption

(% of combined park & firm level

energy consumption metered and

monitored [90%])

× × ×

73

Energy

Renewable and clean energy

(% of renewable energy use in

park relative to national average %

[≥]; max. carbon intensity target

kg CO2e/kWh [in line with local

norms and industry sector

benchmarks])

√√√

EG-2,3; HG-

22

(target for

renewable

energy %

and carbon

reduction)

√√

PE-20;

OI-25,26

(require

data on

renewable

energy %

and

carbon

emissions

)

√√√

RS-12; EP-26

(target for

renewable

energy % and

carbon

reduction)

Energy efficiency

(kWh/$ turnover [in line with local

norms and industry sector

benchmarks])

√√√

EG-1

(industrial

added value /

energy input)

√√

RP-3,

RC-9,10

(no

specific

target is

set)

√√√

RS-10,11

(energy input /

industrial added

value)

Water

Water consumption

(% of water demand that is

sustainable[100%])

√

RG-4

(requirement

on water use

efficiency)

√

RP-5,

RC-8

(require

data on

water

resource

productivi

ty)

√

RS-13,14

(limits on water

usage)

Water treatment

(% of waste water treated/total

waste water [95%])

√√

IG-12

(only

requires WW

treatment

facilities)

×

√√

EP-22

(only requires

WW treatment

facilities)

Energy

74

Water efficiency, reuse and recycling

(% of water reused/total water consumed

[50%])

√√√

RG-7,8

(90%) (higher

target value than

EIP)

√√

CUR-14

(no target

value is set)

√√√

RS-15,16

(75%) (higher

target value than

EIP)

Waste/by-products re-use and recycling

(% of solid waste reused/total waste

[20%])

√√√

RG-6

(95%) (higher

target value than

EIP)

√√

CUR-12

(no target

value is set)

√√√

IS-6

(70%) − (higher

target value than

EIP)

Dangerous and toxic materials

(% of firms which appropriately handle

such materials [100%])

√√√

HG-21

(target value

[100%])

×

√√√

EP-24

(target value

[100%])

Waste disposal

(% of waste to landfill [<50%]) × × ×

Flora and fauna

(% of open space used for native flora and

fauna [5%])

√

HG-26~28

(green coverage

instead of native

flora and fauna)

×

√

EP-29

(green coverage

instead of native

flora and fauna)

Air, GHG emissions, and pollution

prevention

(% of firms which have pollution

prevention and emission reduction

strategies beyond national regulations

[50%]; % of largest polluters which have

a risk management framework [30%])

√√

BR-3,4

HG-24,25

(emission

requirements for

all firms &

environmental

management

framework on

park level)

×

√√

EP-17,18,20,

21,23

(emission

requirements for

key firms & risk

management

framework on park

level)

75

Social (performance indicators)

Topic Subtopic (unit [target value])

Social

management

systems

OH&S management system

(% of firms with more than 250

employees that have a well-

functioning OH&S system [75%])

× × ×

Grievance management

(% of grievances addressed within

90 days [100%]; % of grievances

brought to conclusion [60%]; % of

firms with more than 250

employees that have a code of

conduct system to deal with

grievances [75%])

× × ×

Harassment response

(% of firms with more than 250

employees that have a harassment

prevention and response system in

place [75%])

× × ×

Social

infrastructure

Primary social infrastructure

(% of surveyed employees

reporting satisfaction with social

infrastructure [80%])

× × ×

IP security

(% of reported security and safety

issues adequately addressed within

30 days [100%])

× × ×

76

Capacity building

(% of firms with more than 250

employees with a program for

skills/vocational training

[75%]; % of female workforce

who benefit from such program

[≥ of])

× × ×

Local

community

outreach

Community dialogue

(% of surveyed community

members who are satisfied with

community dialogue [80%])

√

MG-31

(a green IP

information

platform for

info

disclosure)

×

√

ID-30,31

(information

platform for

info disclosure)

Community outreach

(No. of outreach activities/year

[2])

× ×

√√√

ID-32

(target value [h

ac

Economic (prerequisites)

Topic Subtopic

Employment

generation

Type of employment

(Available [Yes/No]) × × ×

Local business

and SME

promotion

SME development

(Available [Yes/No]) × × ×

Economic

value creation

Market demand for EIP services

and infrastructure

(Available [Yes/No])

√

MG-30

(IP

development

× ×

Socialinfrastructure

77

Economic (performance indicators)

Topic Subtopic (unit [target value])

Employment

generation

Local employment generation

(% of employees who live within

daily commuting distance [60%])

× × ×

Type of employment

(% of employees employed

through direct employment [25%])

× × ×

Local business

and SME

promotion

Local value added

(% of firms using local suppliers or

service providers for munity

dialogue [ training [75%];25%]; %

of total procurement value of park

management entity by local firms

or service providers [90%])

× × ×

Economic

value creation

Investment-ready park for firms

(average percent occupancy rate –

rented or used by resident firms

over 5 years [50%])

× × ×

78

Source: World Bank compilationNote: The number of check markets (√) refer to the extent of compatibility/similarity between requirements/stan-dards. √√√ = high level of compatibility/similarity√√ = medium level of compatibility/similarity√ = low level of compatibility/similarity but still share similarities× = no or extremely low compatibility/similarity

The letters and numbers in the final three columns refer to the index and indicators' number. BR = basic requirements;CUR = comprehensive utilization of resources; EP = environmental protection; HG = ecological environment green index; ID = information disclosure; IG = infrastructure green index; MG = management green index; RS = resource saving;CO2 = carbon dioxide;

EIP = eco-industrial park; GHG = greenhouse gas emissions; ISO = International Organization for Standardization; MEE = Ministry of Ecology and Environment; MIIT = Ministry of Industry and Information Technology; NDRC = National Development and Reform Commission; OH&S = occupational health and safety; SME = small and medium enterprise.

Table E.2 A detailed comparison between the Chinese standards and the EIP Framework

The EIP Framework standards MIIT NDRC MEE

Park

management

Prerequisites

(subtopics) (5)

√√√

√√

√

×

1/5

3/5

1/5

0

0

0

0

5/5

1/5 2/5 2/5 0

√/× 5/0 0/5 5/0

No. of

√ 10 0 9

Performance

indicators

(subtopics) (3)

√√√

√√

√

×

0

1/3

0

2/3

0

0

0

3/3

0 1/3 0

2/3 √/× 1/2 0/3 1/2 No. of

√ 2 0 2

Environment

Prerequisites

(subtopics) (6)

√√√

√√

√

×

0

4/6

2/6

0

0

1/6

2/6

3/6

0 2/6 3/6 1/6

√/× 6/0 3/3 5/1 No. of

√ 10 4 7

Performance

indicators

(subtopics)

(12)

√√√

√√

√

×

5/12

2/12

3/12

2/12

0

4/12

1/12

7/12

5/12 2/12 3/12 2/12

√/× 10/2 5/7 10/2 No. of

√ 22 9 22

79

Social

Prerequisites

(subtopics) (2)

√√√

√√

√

×

0

1/2

0

1/2

0

0

0

2/2

0 0 0

2/2 √/× 1/1 0/2 0/2 No. of

√ 2 0 0

Performance

indicators

(subtopics) (8)

√√√

√√

√

×

0

0

1/8

7/8

0

0

0

8/8

1/8 0

1/8 6/8

√/× 1/7 0/8 2/6 No. of

√ 1 0 4

Economic

Prerequisites

(subtopics) (4)

√√√

√√

√

×

0

0

1/4

3/4

0

0

0

4/4

0 0 0

4/4 √/× 1/3 0/4 0/4 No. of

√ 1 0 0

Performance

indicators

(subtopics) (4)

√√√

√√

√

×

0

0

0

4/4

0

0

0

4/4

0 0 0

4/4 √/× 0/4 0/4 0/4 No. of

√ 0 0 0

80

Source: World Bank compilationNote: EIP = eco-industrial park; MEE = Ministry of Ecology and Environment; MIIT = Ministry of Industry and Information Technology; NDRC = National Development and Reform Commission

Total

Prerequisites

(subtopics)

(17)

√√√

√√

√

×

1/17

8/17

4/17

4/17

0

1/17

2/17

14/17

1/17 4/17 5/17 7/17

√ /× 13/4 3/14 10/7 No. of

√ 23 4 16

Performance

indicators

(subtopics)

(27)

√√√

√√

√

×

5/27

3/27

4/27

15/27

0

4/27

1/27

22/27

6/27 3/27 4/27 14/27

√ /× 12/15 5/22 13/14 No. of

√ 25 9 28

81

App

endi

x F.

Sel

f-as

sess

men

t by

Fuzh

ou H

igh-

tech

Zon

e ag

ains

t the

EIP

Fra

mew

ork

Item

s in

whi

te: M

eet E

IP st

anda

rds

Item

s in

blue

: Dat

a ar

e un

avai

labl

e, b

ut th

e Zo

ne b

elie

ves t

hat i

t mee

ts E

IP st

anda

rds

Item

s in

oran

ge: D

oes n

ot m

eet E

IP st

anda

rds O

R d

ata

are

unav

aila

ble

but t

he Z

one

belie

ves i

t doe

s not

mee

t EIP

stan

dard

s

EIP

stan

dard

s D

escr

iptio

n

Req

uire

-

men

t

met

?

(√/×

)

Exp

lana

tion

and

prop

osed

pla

n to

clo

se t

he

gaps

Park

man

agem

ent (

prer

equi

site

s)

Topi

c Su

btop

ic

Park

man

agem

ent e

ntity

A d

istin

ct p

ark

man

agem

ent e

ntity

exi

sts t

o

hand

le p

ark

plan

ning

, ope

ratio

ns a

nd

man

agem

ent,

and

mon

itorin

g.

√

The

Fuzh

ou h

igh-

tech

zon

e m

anag

emen

t

com

mitt

ee (F

ZHT

MC

her

eafte

r) is

in c

harg

e of

econ

omic

, soc

ial,

and

man

agem

ent a

ffai

rs

with

in th

e zo

ne.

√

The

FZH

T M

C e

stab

lishe

d de

partm

ents

(suc

h as

a la

nd re

sour

ce b

urea

u, c

onst

ruct

ion

bure

au, a

nd

envi

ronm

enta

l pro

tect

ion

bure

au) t

hat m

anag

e

vario

us c

omm

on a

ffai

rs. S

imul

tane

ousl

y, F

ZHT

MC

hire

s a th

ird p

arty

to p

rovi

de m

ore

prof

essi

onal

serv

ices

.

Park

man

agem

ent

serv

ices

Pa

rk p

rope

rty, c

omm

on

infr

astru

ctur

e an

d se

rvic

es

Park

man

agem

ent e

ntity

to m

anag

e an

d m

aint

ain

the

IP p

rope

rty, c

omm

on

infr

astru

ctur

e, a

nd se

rvic

es a

s pre

scrib

ed in

the

tena

nt c

ontra

ct a

nd th

e pa

rk’s

M

aste

r Pla

n. T

his s

houl

d in

clud

e, b

ut is

not

lim

ited

to th

e fo

llow

ing:

• Pro

perty

man

agem

ent,

incl

udin

g pl

ot a

llotm

ents

, rea

llotm

ents

, dev

elop

men

t, an

d la

nd u

se m

onito

ring.

• Util

ities

, roa

ds, a

nd te

chni

cal u

nits

such

as w

aste

and

was

tew

ater

trea

tmen

t pl

ants

and

ope

ratio

ns, p

ower

and

ene

rgy

syst

ems.

• Was

te c

olle

ctio

n ar

eas a

nd se

rvic

es.

• Mai

nten

ance

and

repa

ir w

orks

hops

.• S

ecur

ity a

nd e

mer

genc

y re

spon

se se

rvic

es a

nd fa

cilit

ies.

• Com

mon

land

scap

ing,

buf

fer z

ones

, stre

et li

ghtin

g, se

curit

y su

rvei

llanc

e,

and

stre

et c

lean

ing.

• Com

mon

em

ploy

ee a

nd te

nant

faci

litie

s.• P

rovi

de fa

cilit

atin

g se

rvic

es to

and

bet

wee

n te

nant

firm

s (fo

r exa

mpl

e,

netw

orki

ng, c

olla

bora

tion,

and

trai

ning

oppo

rtuni

ties)

.• E

ngag

emen

t with

the

park

’s st

akeh

olde

rs a

nd b

usin

ess r

epre

sent

ativ

es.

82

Mon

itorin

g

and

risk

man

agem

ent

Mon

itorin

g

perf

orm

ance

and

risk

s

Park

m

anag

emen

t en

tity

mai

ntai

ns

an

EIP

fram

ewor

k m

onito

ring

syst

em in

pla

ce, t

rack

ing:

• Pro

gres

s on

envi

ronm

enta

l, so

cial

, and

econ

omic

perf

orm

ance

at t

he p

ark

leve

l.

• C

ritic

al r

isk

fact

ors

and

rela

ted

resp

onse

s, at

leas

t for

:

o R

isk

poin

ts w

here

the

acc

iden

tal

rele

ase

of

pois

onou

s so

lid,

liqui

d, a

nd g

aseo

us e

fflu

ents

,

incl

udin

g du

ring

trans

porta

tion

and

disp

osal

,whe

n fir

e ha

zard

s are

pos

sibl

e.

o A

pplic

able

nat

ural

dis

aste

r ris

ks (

for

exam

ple,

earth

quak

es).

√

Rel

evan

t man

ager

ial d

epar

tmen

ts a

nd

mon

itorin

g sy

stem

are

in p

lace

.

Whe

re r

equi

red,

Par

k m

anag

emen

t has

a p

lan

in

plac

e to

reac

t to

poss

ible

neg

ativ

e im

pact

s du

e to

clim

ate

chan

ge r

isks

(he

at w

aves

and

dro

ught

s,

stor

ms a

nd fl

oodw

ater

even

ts).

All

adap

tion

need

s

for i

nfra

stru

ctur

e and

serv

ices

are i

dent

ified

and

in

plac

e fo

r th

e in

dust

rial

esta

te t

o pr

otec

t ag

ains

t

clim

ate

chan

ge ri

sks a

nd p

oten

tial d

amag

es.

√

Rel

evan

t pla

ns a

re in

pla

ce.

Info

rmat

ion

on

appl

icab

le re

gula

tions

and

stan

dard

s

Park

man

agem

ent e

ntity

has

a fu

nctio

ning

syst

em in

pla

ce to

com

ply

with

loca

l/nat

iona

l

regu

latio

ns a

nd in

tern

atio

nal s

tand

ards

app

licab

le

to th

e IP

. Par

k m

anag

emen

t inf

orm

s com

plia

nce

by re

side

nt fi

rms i

nclu

ding

com

plia

nce

info

rmat

ion

that

firm

s sha

re w

ith th

e pa

rk

man

agem

ent e

ntity

.

√

N/A

83

Prop

ortio

n of

firm

s in

the

IP to

hav

e si

gned

a re

side

ncy

cont

ract

/par

k ch

arte

r/cod

e of

con

duct

(dep

endi

ng o

n w

hat

is le

gally

bin

ding

on

park

firm

s acc

ordi

ng to

the

exis

ting

legi

slat

ion

in th

e co

untry

); an

d ad

ditio

nal l

egal

ly b

indi

ng

arra

ngem

ents

that

em

pow

er th

e pa

rk m

anag

emen

t ent

ity

to p

erfo

rm it

s res

pons

ibili

ties a

nd ta

sks a

nd c

harg

e fe

es

(som

etim

es a

bsor

bed

in re

ntal

fees

) for

com

mon

serv

ices

. Th

is m

ay in

clud

e tra

nspa

rent

fees

for s

ervi

ces p

erta

inin

g to

the

achi

evem

ent o

f EIP

per

form

ance

targ

ets.

Plan

ning

and

zoni

ng

Mas

ter p

lan

A M

aste

r Pla

n (o

r equ

ival

ent p

lann

ing

docu

men

t) fo

r any

new

and

exi

stin

g IP

has

bee

n

deve

lope

d an

d is

revi

ewed

per

iodi

cally

(and

upda

ted

if re

quire

d), i

nclu

ding

the

follo

win

g co

re

elem

ents

:

• Site

sel

ectio

n st

udy

base

d on

var

ious

risk

anal

yses

; ess

entia

l and

eff

icie

nt in

fras

truct

ure,

utili

ties,

and

tran

spor

tatio

n ne

twor

k;

envi

ronm

enta

l and

soc

ial i

ssue

s; in

tern

al p

ark

land

zon

ing;

buf

fer z

one

arou

nd th

e pa

rk;

proc

edur

e to

saf

ely

loca

te h

igh

risk

indu

strie

s;

and

clus

ter s

yner

gist

ic in

dust

ries.

• Int

egra

tion

into

Mas

ter P

lan

of re

leva

nt

requ

irem

ents

spe

cifie

d in

this

EIP

fram

ewor

k

that

hav

e sp

atia

l im

plic

atio

ns.

√

Soci

oeco

nom

ic d

evel

opm

ent p

lans

, urb

an

deve

lopm

ent p

lans

, lan

d re

sour

ce u

tiliz

atio

n

plan

s, a

nd in

dust

rial p

lans

are

all

in p

lace

.

Park

man

agem

ent (

perf

orm

ance

indi

cato

rs)

Topi

c Su

btop

ic

(uni

t [ta

rget

val

ue])

Park

man

agem

ent

serv

ices

Park

man

agem

ent

empo

wer

men

t

100%

[100

%]

N/A

Park

man

agem

ent e

ntity

prop

erty

and

com

mon

infr

astru

ctur

e

The

resi

dent

firm

s ind

icat

e sa

tisfa

ctio

n w

ith re

gard

to

the

prov

isio

n of

serv

ices

and

com

mon

infr

astru

ctur

e by

the

park

man

agem

ent’s

ent

ity (o

r alte

rnat

ive

agen

cy,

whe

re a

pplic

able

).

≥95

%

[75%

]

Park

surv

eys f

irm sa

tisfa

ctio

n w

ith th

e pa

rk

man

agem

ent e

very

six

mon

ths.

The

aver

age

satis

fact

ion

rate

is a

bove

95%

.

84

Mon

itorin

g

and

risk

man

agem

ent

EIP

perf

orm

ance

and

criti

cal r

isk

man

agem

ent

Park

man

agem

ent e

ntity

regu

larl

y m

onito

rs a

nd

prep

ares

con

solid

ated

repo

rts re

gard

ing

the

achi

evem

ent o

f tar

get v

alue

s (a

s do

cum

ente

d in

this

fram

ewor

k) to

enc

ompa

ss th

e fo

llow

ing:

• Env

ironm

enta

l per

form

ance

• Soc

ial p

erfo

rman

ce

• Eco

nom

ic p

erfo

rman

ce

• Crit

ical

risk

man

agem

ent a

t the

leve

l of t

he

park

.

Var

ies

from

mon

thly

to

sem

iann

ua

lly

The

Zone

con

duct

s m

onth

ly re

port

and

anal

ysis

of th

e Zo

ne’s

eco

nom

ic p

erfo

rman

ce,

The

Zone

als

o pr

epar

es a

sem

iann

ual r

epor

t and

anal

ysis

on

envi

ronm

enta

l and

soc

ial

perf

orm

ance

of t

he Z

one.

Env

iron

men

t (pr

ereq

uisi

tes)

Topi

c Su

b-to

pic

Man

agem

ent

and

mon

itorin

g

Envi

ronm

enta

l/Ene

rgy

Man

agem

ent S

yste

ms

(EM

S an

d En

MS,

resp

ectiv

ely)

Park

man

agem

ent e

ntity

ope

rate

s an

envi

ronm

enta

l/ene

rgy

man

agem

ent s

yste

m in

line

with

inte

rnat

iona

lly c

ertif

ied

stan

dard

s,

mon

itorin

g pa

rk p

erfo

rman

ce a

nd s

uppo

rting

resi

dent

firm

s in

the

mai

nten

ance

of t

heir

own

firm

-leve

l man

agem

ent s

yste

ms.

×

The

Zone

’s e

nviro

nmen

tal p

rote

ctio

n bu

reau

mon

itors

and

man

age

envi

ronm

enta

l pro

tect

ion

activ

ities

, but

has

not

yet

est

ablis

hed

natio

nally

or in

tern

atio

nally

cer

tifie

d m

anag

emen

t sys

tem

s

The

Zone

pla

ns to

est

ablis

h an

onl

ine

mon

itorin

g sy

stem

to im

prov

e th

e le

vel o

f

“sm

art m

anag

emen

t.”

Ener

gy

Ener

gy e

ffic

ienc

y

Supp

ortin

g pr

ogra

ms

and

docu

men

ts a

re in

pla

ce

to im

prov

e th

e en

ergy

eff

icie

ncy

of re

side

nt

firm

s, e

spec

ially

for t

he to

p 50

per

cent

of m

ajor

ener

gy-c

onsu

min

g bu

sine

sses

in th

e pa

rk.

√

Polic

ies

supp

ortin

g fir

ms’

ene

rgy

savi

ng

trans

form

atio

n an

d cl

ean

prod

uctio

n ar

e in

plac

e.

Dat

a ar

e av

aila

ble

for f

irms’

ene

rgy

cons

umpt

ion.

Exch

ange

of w

aste

hea

t

ener

gy

An

indu

stria

l hea

t rec

over

y st

rate

gy is

in p

lace

to

inve

stig

ate

oppo

rtuni

ties

for h

eat a

nd e

nerg

y

reco

very

for t

he m

ajor

ene

rgy-

cons

umin

g fir

ms

in th

e pa

rk. (

Typi

cally

, the

se a

re fi

rms

that

indi

vidu

ally

con

sum

e at

leas

t 10

perc

ent−

20

perc

ent o

f tot

al fi

rm le

vel e

nerg

y co

nsum

ptio

n).

√

The

Zone

sup

ports

was

te h

eat r

ecov

ery,

but

no

firm

with

in th

e Zo

ne h

as th

e ca

paci

ty to

reco

ver

was

te h

eat.

85

Wat

er

Wat

er e

ffic

ienc

y, re

use,

and

recy

clin

g

Park

man

agem

ent e

ntity

has

dem

onst

rabl

e pl

ans

and

(pre

fera

bly)

prio

r doc

umen

ted

evid

ence

to

incr

ease

wat

er re

use

in th

e sh

ort a

nd m

ediu

m

term

. Thi

s wou

ld b

e ac

hiev

ed b

y ei

ther

reus

e of

indu

stria

l eff

luen

ts o

r by

rain

wat

er/s

torm

wat

er

colle

ctio

n.

√

The

Zone

enc

oura

ges a

nd g

uide

s firm

s in

wat

er

savi

ng a

nd re

use.

Rai

n w

ater

col

lect

ion

and

was

te w

ater

trea

tmen

t

faci

litie

s are

in p

lace

Clim

ate

chan

ge a

nd

the

natu

ral

envi

ronm

ent

Air,

GH

G e

mis

sion

s,

and

pollu

tion

prev

entio

n

A p

rogr

am is

est

ablis

hed

to m

onito

r, m

itiga

te

and/

or m

inim

ize

gree

nhou

se g

as (G

HG

)

emis

sion

s, su

ch a

s car

bon

diox

ide

(CO

2),

met

hane

(CH

4), a

nd n

itrog

en o

xide

(NO

x). T

here

is c

lear

evi

denc

e of

step

s tak

en to

intro

duce

miti

gatio

n ac

tiviti

es.

×

No

data

on

GH

G e

mis

sion

are

bei

ng c

olle

cted

or m

onito

red.

Jian

gxi P

rovi

nce

inve

stig

ates

carb

on e

mis

sion

s of f

irms w

ith a

n an

nual

ener

gy c

onsu

mpt

ion

of m

ore

than

5,0

00 to

ns

stan

dard

coa

l. Th

e Zo

ne h

as o

nly

3 su

ch fi

rms.

Envi

ronm

enta

l

asse

ssm

ent a

nd

ecos

yste

m se

rvic

es

The

park

man

agem

ent e

ntity

has

a p

lan

in p

lace

to a

sses

s ope

ratio

nal e

nviro

nmen

tal i

mpa

cts,

and

aim

s to

limit

the

impa

ct o

n pr

iorit

ized

loca

l

ecos

yste

m se

rvic

es.

√

An

EIA

repo

rt an

d re

leva

nt m

anag

emen

t

polic

ies a

re in

pla

ce.

An

EIA

is a

lso

done

for e

very

new

com

pany

.

ente

ring

the

Zone

.

Env

iron

men

t (pe

rfor

man

ce in

dica

tors

)

Topi

c Su

btop

ic (u

nit [

targ

et v

alue

])

Man

agem

ent

and

mon

itorin

g

Envi

ronm

enta

l/ene

rgy

man

agem

ent s

yste

ms

Prop

ortio

n of

resi

dent

firm

s with

mor

e

than

250

em

ploy

ees t

hat

hav

e an

envi

ronm

enta

l/ene

rgy

man

agem

ent

syst

em in

pla

ce th

at is

in li

ne w

ith

inte

rnat

iona

lly c

ertif

ied

stan

dard

s.

8.82

%

[40%

]

Acc

ordi

ng to

prim

ary

surv

eys,

9 fir

ms w

ithin

the

Zone

obt

aine

d IS

O c

ertif

icat

ion,

3 o

f whi

ch

have

250

+ em

ploy

ees.

A to

tal o

f 34

firm

s

with

in th

e pa

rk h

ave

250+

em

ploy

ees.

Ener

gy c

onsu

mpt

ion

Prop

ortio

n of

com

bine

d pa

rk fa

cilit

ies a

nd

firm

-leve

l ene

rgy

cons

umpt

ion,

for w

hich

met

erin

g an

d m

onito

ring

syst

ems a

re in

plac

e.

Dat

a no

t

avai

labl

e

The

Zone

’s b

urea

u of

stat

istic

s con

duct

s

mon

thly

ene

rgy

cons

umpt

ion

inve

stig

atio

n of

firm

s, bu

t rea

l-tim

e m

eter

ing

and

mon

itorin

g

syst

ems a

re n

ot in

pla

ce

Ener

gy

86

Ener

gy

Ren

ewab

le a

nd c

lean

ene

rgy

Tota

l ren

ewab

le e

nerg

y us

e in

the

IP is

equa

l to

or g

reat

er th

an th

e an

nual

natio

nal a

vera

ge e

nerg

y m

ix.

< [≥]

The

Zone

’s p

erce

ntag

e of

rene

wab

le e

nerg

y us

e

in 2

016

was

7.8

%; p

ower

gen

erat

ed fr

om

rene

wab

le e

nerg

y co

nstit

uted

25.

4% o

f tot

al

pow

er c

onsu

mpt

ion

in 2

016.

Park

man

agem

ent e

ntity

set

s an

d w

orks

tow

ard

ambi

tious

) m

axim

um c

arbo

n

inte

nsity

targ

ets

beyo

nd in

dust

ry n

orm

s:

max

imum

kilo

gram

s of

car

bon

diox

ide

equi

vale

nt (k

g C

O2e

)/kilo

wat

t hou

r (kW

h)

for t

he p

ark

and

its re

side

nts.

Tar

gets

shou

ld b

e es

tabl

ishe

d fo

r the

sho

rt,

med

ium

, and

long

term

.

No

targ

et

is

set

No

spec

ific

plan

on

GH

G e

mis

sion

con

trol i

s in

plac

e w

ithin

the

Zone

; how

ever

, in

the

Jian

gxi

Prov

inci

al 1

3th

Five

-Yea

r Pla

n, C

O2 e

mis

sion

per u

nit o

f ind

ustri

al o

utpu

t in

Fuzh

ou s

houl

d be

redu

ced

by 1

8.5%

by

2020

(with

201

5 em

issi

on

leve

l as

benc

hmar

k).

Ener

gy e

ffic

ienc

y

Park

man

agem

ent e

ntity

set

s an

d w

orks

tow

ard

ambi

tious

max

imum

ene

rgy

inte

nsity

targ

ets

per p

rodu

ctio

n un

it

(kW

h/$

turn

over

) for

the

park

and

its

resi

dent

s. T

arge

ts s

houl

d be

est

ablis

hed

for t

he s

hort,

med

ium

, and

long

term

.

N/A

N

/A

Wat

er

Wat

er c

onsu

mpt

ion

Tota

l wat

er d

eman

d fr

om fi

rms

in IP

that

does

no

t hav

e si

gnifi

cant

neg

ativ

e

impa

cts

on lo

cal w

ater

sou

rces

or l

ocal

com

mun

ities

.

100%

[100

%]

/N/A

Wat

er tr

eatm

ent

Prop

ortio

n of

indu

stria

l was

tew

ater

gene

rate

d by

IP a

nd re

side

nt fi

rms

that

is

treat

ed to

app

ropr

iate

env

ironm

enta

l

stan

dard

s.

100%

[95%

] N

/A

Wat

er e

ffic

ienc

y, re

use,

and

recy

clin

g

Prop

ortio

n of

tota

l ind

ustri

al w

aste

wat

er

from

firm

s in

the

park

that

is re

used

resp

onsi

bly

with

in o

r out

side

the

IP.

30%

[50%

] N

/A

Ener

gy

87

Was

te a

nd

mat

eria

l use

Was

te/b

y-pr

oduc

ts re

use

and

recy

clin

g

Prop

ortio

n of

solid

was

te g

ener

ated

by

firm

s, w

hich

is re

used

by

othe

r firm

s,

neig

hbor

ing

com

mun

ities

, or

mun

icip

aliti

es.

86%

[20%

] N

/A

Dan

gero

us a

nd to

xic

mat

eria

ls

Prop

ortio

n of

firm

s in

park

, whi

ch

appr

opria

tely

han

dle,

stor

e, tr

ansp

ort a

nd

disp

ose

of to

xic

and

haza

rdou

s mat

eria

ls.

100%

[100

%]

N/A

Was

te d

ispo

sal

Max

imum

pro

porti

on o

f was

tes g

ener

ated

by fi

rms i

n th

e IP

that

goe

s t

o la

ndfil

ls.

100%

[<50

%]

All

was

te g

oes t

o la

ndfil

ls.

Clim

ate

chan

ge a

nd

the

natu

ral

envi

ronm

ent

Flor

a an

d fa

una

Min

imum

pro

porti

on o

f ope

n sp

ace

in th

e

park

use

d fo

r nat

ive

flora

and

faun

a.

46%

[5%

] G

reen

cov

erag

e ra

te o

f the

Zon

e re

ache

s 46%

.

Air,

GH

G e

mis

sion

s, an

d

pollu

tion

prev

entio

n

Prop

ortio

n of

firm

s in

park

that

hav

e

pollu

tion

prev

entio

n an

d em

issi

on

redu

ctio

n st

rate

gies

to re

duce

the

inte

nsity

and

mas

s flo

w o

f pol

lutio

n/em

issi

on

rele

ase

beyo

nd n

atio

nal r

egul

atio

ns.

Dat

a N

/A

but

belie

ves t

o

be 1

00%

[50%

]

All

firm

s mus

t est

ablis

h po

llutio

n pr

even

tion

and

redu

ctio

n st

rate

gies

to e

nsur

e th

at th

ey m

eet

emis

sion

requ

irem

ents

.

EIA

and

ene

rgy

cons

umpt

ion

inve

stig

atio

n m

ust

be c

ondu

cted

and

env

ironm

enta

l pro

tect

ion

and

ener

gy sa

ving

are

com

puls

ory

requ

irem

ents

Prop

ortio

n of

larg

est p

ollu

ters

in IP

that

have

a ri

sk m

anag

emen

t fra

mew

ork

in

plac

e th

at: (

a) id

entif

ies t

he a

spec

ts th

at

have

an

impa

ct o

n th

e en

viro

nmen

t, an

d

(b) a

ssig

n a

leve

l of s

igni

fican

ce to

eac

h

envi

ronm

enta

l asp

ect.

Dat

a N

/A

but

belie

ves t

o

be 1

00%

[30%

]

All

firm

s mus

t hav

e en

viro

nmen

tal r

isk

man

agem

ent f

ram

ewor

k in

pla

ce to

ens

ure

no

envi

ronm

enta

l acc

iden

t cou

ld o

ccur

.

An

EIA

mus

t be

cond

ucte

d an

d av

oidi

ng

envi

ronm

enta

l acc

iden

ts is

a c

ompu

lsor

y

requ

irem

ent

88

Soci

al (p

rere

quis

ites)

Topi

c Su

btop

ic

Soci

al

man

agem

ent

syst

ems

Man

agem

ent t

eam

Ded

icat

ed p

erso

nnel

exi

st (a

s par

t of t

he

park

man

agem

ent e

ntity

) to

plan

and

man

age

soci

al q

ualit

y st

anda

rds.

√

The

Zone

’s b

urea

u of

soci

al a

ffai

rs, b

urea

u of

hum

an re

sour

ces a

nd so

cial

secu

rity,

and

the

depa

rtmen

t of h

ousi

ng m

anag

emen

t are

in

char

ge o

f pla

nnin

g an

d m

anag

ing

soci

al

deve

lopm

ent.

Soci

al

infr

astru

ctur

e Pr

imar

y so

cial

infr

astru

ctur

e

Prov

isio

n of

fund

amen

tal s

ocia

l

infr

astru

ctur

e in

the

IP o

r its

pro

xim

ity

also

faci

litat

e an

d en

cour

age

wom

en’s

empl

oym

ent,

for e

xam

ple,

lava

torie

s and

publ

ic to

ilets

(for

men

and

wom

en),

drin

king

wat

er fo

unta

ins,

prov

isio

n of

cafe

teria

s with

in re

ach

of th

e em

ploy

ees,

recr

eatio

nal a

reas

, and

chi

ldca

re

prog

ram

s. Th

is in

fras

truct

ure

need

s to

be

fully

ope

ratio

nal t

o en

cour

age

wom

en’s

empl

oym

ent.

√

N/A

89

Soci

al (p

erfo

rman

ce in

dica

tors

)

Topi

c Su

btop

ic (u

nit [

targ

et v

alue

])

Soci

al

man

agem

ent

syst

ems

OH

&S

man

agem

ent s

yste

m

Perc

enta

ge o

f all

firm

s in

the

IP w

ith m

ore

than

250

em

ploy

ees t

hat h

ave

a w

ell-

func

tioni

ng O

H&

S m

anag

emen

t sys

tem

in

plac

e.

Dat

a N

/A

but

belie

ves t

o

be 1

00%

[75%

]

All

firm

s mus

t est

ablis

h a

safe

pro

duct

ion

and

voca

tiona

l hea

lth m

anag

emen

t fra

mew

ork

to

ensu

re e

mpl

oyee

s’ h

ealth

and

that

no

prod

uctio

n

acci

dent

wou

ld o

ccur

. The

se

are

com

puls

ory

requ

irem

ents

Grie

vanc

e m

anag

emen

t

Perc

enta

ge o

f grie

vanc

es re

ceiv

ed b

y th

e

park

man

agem

ent e

ntity

that

ar

e

addr

esse

d w

ithin

90

days

.

Dat

a N

/A

but

belie

ves t

o

be 1

00%

[100

%]

The

Zone

pro

vide

s a v

arie

ty o

f way

s for

firm

s

to e

xpre

ss g

rieva

nces

, as w

ell a

s cor

resp

ondi

ng

grie

vanc

e re

solv

ing

mec

hani

sms,

incl

udin

g si

te

surv

eys i

n fir

ms,

regu

lar s

essi

ons w

ith fi

rms,

and

a se

rvic

e ho

tline

for f

irms.

Perc

enta

ge o

f gr

ieva

nces

rec

eive

d by

the

park

man

agem

ent e

ntity

that

wer

e br

ough

t

to c

oncl

usio

n.

Dat

a N

/A

but

belie

ves t

o

be >

90%

[60%

]

Alm

ost

all

reas

onab

le

grie

vanc

es

can

be

reso

lved

.

Perc

enta

ge o

f all

firm

s in

the

IP w

ith m

ore

than

250

em

ploy

ees t

hat h

ave

a co

de o

f

cond

uct s

yste

m in

pla

ce to

dea

l with

grie

vanc

es.

Dat

a N

/A

but

belie

ves t

o

be 1

00%

[75%

]

The

Zone

bel

ieve

s tha

t all

firm

s with

mor

e th

an

250

empl

oyee

s hav

e ad

min

istra

tive

depa

rtmen

ts

in c

harg

e of

man

agin

g an

d re

solv

ing

grie

vanc

es

from

em

ploy

ees.

Har

assm

ent r

espo

nse

Perc

enta

ge o

f all

firm

s in

the

IP w

ith m

ore

than

250

em

ploy

ees t

hat h

ave

a

hara

ssm

ent p

reve

ntio

n an

d re

spon

se

syst

em in

pla

ce.

Dat

a N

/A

but

belie

ves t

o

be 1

00%

[75%

]

The

Zone

bel

ieve

s tha

t all

firm

s with

mor

e th

an

250

empl

oyee

s hav

e a

hara

ssm

ent p

reve

ntio

n

and

resp

onse

syst

em in

pla

ce.

90

Soci

al

infr

astru

ctur

e

Prim

ary

soci

al in

fras

truct

ure

Perc

enta

ge o

f the

surv

eyed

em

ploy

ees’

repo

rting

satis

fact

ion

with

soci

al

infr

astru

ctur

e.

Dat

a N

/A

Indu

stria

l par

k se

curit

y

Perc

enta

ge o

f rep

orte

d se

curit

y an

d sa

fety

issu

es th

at a

re a

dequ

atel

y ad

dres

sed

with

in 3

0 da

ys.

Dat

a N

/A

but

belie

ves t

o

be 1

00%

[100

%]

The

Zone

has

rele

vant

ope

ratio

n an

d

mai

nten

ance

dep

artm

ent h

andl

ing

all k

inds

of

secu

rity

and

safe

ty is

sues

Cap

acity

bui

ldin

g

Perc

enta

ge o

f all

firm

s in

the

IP w

ith m

ore

than

250

em

ploy

ees w

ith a

pro

gram

for

skill

s/vo

catio

nal t

rain

ing

and

deve

lopm

ent.

100%

[75%

] N

/A

Perc

enta

ge o

f fem

ale

wor

kfor

ce w

ho

bene

fit fr

om a

vaila

ble

supp

ortin

g

infr

astru

ctur

e/pr

ogra

ms f

or sk

ills

deve

lopm

ent.

Dat

a N

/A

Gen

eral

supp

ortin

g in

fras

truct

ure

and

prog

ram

s

for s

kill

deve

lopm

ent i

n th

e Zo

ne a

re a

vaila

ble

to a

ll, so

in p

rinci

ple,

all

fem

ale

wor

kfor

ce c

an

bene

fit u

nles

s som

e ar

e no

t will

ing

to

parti

cipa

te.

Loca

l

com

mun

ity

outre

ach

Com

mun

ity d

ialo

gue

Ove

r 80

perc

ent o

f the

surv

eyed

com

mun

ity m

embe

rs a

re sa

tisfie

d w

ith th

e

com

mun

ity d

ialo

gue.

Dat

a N

/A

The

Zone

has

est

ablis

hed

info

rmat

ion

disc

losu

re

and

feed

back

fram

ewor

k, b

ut h

as n

ot d

one

the

surv

eys i

n qu

estio

n,

Com

mun

ity o

utre

ach

Num

ber o

f out

reac

h ac

tiviti

es

impl

emen

ted

by th

e pa

rk m

anag

emen

t

entit

y an

nual

ly th

at a

re re

gard

ed a

s

posi

tive

by o

ver 8

0 pe

rcen

t of t

he

surv

eyed

com

mun

ity m

embe

rs.

Dat

a N

/A

Dat

a ar

e N

/A, b

ut th

e Zo

ne d

oes h

ave

outre

ach

activ

ities

such

as w

orke

r rec

ruitm

ent,

bloo

d

dona

tions

, and

fest

ival

gal

as. T

hese

act

iviti

es

rece

ive

a hi

gh le

vel o

f rec

ogni

tion

from

com

mun

ity m

embe

rs.

91

Eco

nom

ic (p

rere

quis

ites)

Topi

c Su

btop

ic

Empl

oym

ent

gene

ratio

n Ty

pe o

f em

ploy

men

t

Park

man

agem

ent e

ntity

has

pla

ns to

gene

rate

spec

ific

num

bers

and

type

s of

jobs

(inc

ludi

ng d

iver

sity

and

incl

usiv

enes

s) in

line

with

gov

ernm

ent

targ

ets.

√

N/A

Loca

l bus

ines

s

and

SME

prom

otio

n

SME

deve

lopm

ent

Park

man

agem

ent e

ntity

allo

ws a

nd

prom

otes

the

esta

blis

hmen

t of S

MEs

that

prov

ide

serv

ices

and

add

val

ue to

par

k

resi

dent

s.

√

N/A

Econ

omic

valu

e cr

eatio

n

Mar

ket d

eman

d fo

r EIP

serv

ices

and

infr

astru

ctur

e

A m

arke

t dem

and

and

feas

ibili

ty st

udy,

supp

orte

d by

a b

usin

ess p

lan,

for s

peci

fic

“gre

en”

infr

astru

ctur

e an

d se

rvic

e

offe

rings

has

bee

n un

derta

ken

to ju

stify

plan

ning

and

impl

emen

tatio

n in

the

IP.

√

N/A

EIP

mee

ts e

cono

mic

inte

rest

s

of th

e go

vern

men

t

Trac

ked

by th

e pa

rk m

anag

emen

t ent

ity,

the

IP fu

lfils

rele

vant

gov

ernm

ent t

arge

ts,

incl

udin

g do

mes

tic, f

orei

gn d

irect

inve

stm

ent,

and

tax

reve

nues

.

√

N/A

92

Eco

nom

ic (p

erfo

rman

ce in

dica

tors

)

Topi

c Su

btop

ic

(uni

t [ta

rget

val

ue])

Empl

oym

ent

gene

ratio

n

Loca

l em

ploy

men

t

gene

ratio

n

Perc

enta

ge o

f tot

al w

orke

rs e

mpl

oyed

in IP

who

live

with

in d

aily

com

mut

ing

dist

ance

.

Dat

a N

/A

but

belie

ves t

o

be >

95%

[60%

]

Wor

kers

and

em

ploy

ees w

ithin

the

Zone

are

mos

tly re

side

nts f

rom

nei

ghbo

rhoo

d

com

mun

ities

or m

igra

nt w

orke

rs li

ving

in d

orm

s

prov

ided

by

the

Zone

.

Onl

y th

ose

(ver

y fe

w) w

ho a

re te

mpo

raril

y

empl

oyed

or s

ales

peop

le w

ho a

re b

usin

ess t

rips

on a

regu

lar b

asis

do

not l

ive

with

in d

aily

com

mut

ing

dist

ance

.

Type

of e

mpl

oym

ent

Perc

enta

ge o

f tot

al fi

rm w

orke

rs in

IP e

mpl

oyed

thro

ugh

dire

ct e

mpl

oym

ent (

that

is, n

ot e

mpl

oyed

on a

fee-

for-

outp

ut b

asis

or p

rovi

ded

thro

ugh

a

labo

r sup

ply

firm

) and

per

man

ent c

ontra

cts.

Dat

a N

/A

but

belie

ves t

o

be >

90%

[25%

]

A p

relim

inar

y bu

t tho

roug

h in

vest

igat

ion

sugg

ests

that

mos

t (if

not a

ll) e

mpl

oyee

s are

dire

ctly

em

ploy

ed b

y fir

ms.

93

Sour

ce: W

orld

Ban

k co

mpi

latio

n

Not

e: N

/A =

not

ava

ilabl

e. E

IA =

env

ironm

enta

l im

pact

ass

essm

ent;

EIP

= ec

o-in

dust

rial p

ark;

FH

TZ M

C =

Fuz

hou

high

-tech

zon

e m

anag

emen

t com

mitt

ee;

IP =

indu

stria

l par

k; O

H&

S =

occu

patio

nal h

ealth

and

safe

ty.

Loca

l bus

ines

s

and

SME

prom

otio

n

Loca

l val

ue a

dded

Perc

enta

ge o

f res

iden

t firm

s usi

ng lo

cal s

uppl

iers

or se

rvic

e pr

ovid

ers f

or a

t lea

st 8

0 pe

rcen

t of

thei

r tot

al p

rocu

rem

ent v

alue

.

Dat

a N

/A

but

belie

ves t

o

be <

25%

[25%

]

Firm

s nor

mal

ly c

ompa

re a

nd se

lect

pro

duct

s or

serv

ices

on

a la

rge

scal

e in

a b

ig “

com

petit

ive

mar

ket”

The

trans

porta

tion

syst

em in

Fuz

hou

is

rela

tivel

y ad

vanc

ed; p

rocu

rem

ent o

utsi

de

Fuzh

ou is

eas

y.

The

indu

stria

l cha

in in

the

Zone

is n

ot

com

plet

e. S

ome

prod

ucts

and

serv

ices

nee

d to

be p

urch

ased

out

side

the

Zone

.

Perc

enta

ge o

f tot

al p

rocu

rem

ent v

alue

of p

ark

man

agem

ent e

ntity

supp

lied

by lo

cal f

irms o

r

serv

ice

prov

ider

s.

Dat

a N

/A

but

belie

ves t

o

be <

90%

[90%

]

The

Zone

pur

chas

es a

gre

at v

arie

ty o

f goo

ds a

nd

serv

ices

from

diff

eren

t ind

ustri

es/b

usin

esse

s;

how

ever

, m

ost f

irms w

ithin

the

Zone

are

IT,

bio-

phar

mac

eutic

al, a

utom

obile

, ren

ewab

le

ener

gy fi

rms:

The

90%

of l

ocal

pro

cure

men

t

valu

e is

just

impo

ssib

le to

mee

t.

Econ

omic

valu

e cr

eatio

n

Inve

stm

ent-r

eady

par

k

for f

irms

The

ratio

of r

ente

d or

use

d sp

ace

by re

side

nt

firm

s com

pare

d to

the

tota

l am

ount

of a

vaila

ble

spac

e ea

rmar

ked

for r

esid

ent f

irms w

ithin

IPs.

Dat

a N

/A

but

belie

ves t

o

be >

50%

[50%

]

Land

dem

and

from

the

deve

lopm

ent o

f IPs

is

stea

dy; i

n fa

ct, m

any

proj

ects

are

una

ble

to e

nter

the

Zone

bec

ause

they

do

not h

ave

the

quot

a fo

r

land

use

(as r

equi

red

by th

e lo

cal g

over

nmen

t,

right

s for

land

use

take

the

form

of “

land

quo

ta”

and

are

dist

ribut

ed to

pro

ject

s eac

h ye

ar.

Proj

ects

with

out s

uch

quot

a ar

e no

t allo

wed

to

oper

ate)

. The

cur

rent

ratio

is 6

9.9%

(are

a

deve

lope

d: 1

5 km

2 ; tot

al a

rea

of th

e Zo

ne: 2

1.48

km2 )

94

App

endi

x G

. Fin

anci

al in

stru

men

t/pol

icie

s pro

mot

ing

the

deve

lopm

ent o

f EIP

s in

Chi

na

T

itle

Ena

cted

by

Fisc

al su

ppor

t fro

m g

over

nmen

t Pr

efer

entia

l tax

atio

n po

licy

Gre

en fi

nanc

e an

d ot

her

pref

eren

tial

finan

cial

pol

icie

s

Law

s

Envi

ronm

enta

l

Prot

ectio

n

Law

NPC

Arti

cle

8: L

ocal

gov

ernm

ents

at a

ll le

vels

shal

l

incr

ease

the

finan

cial

inve

stm

ent i

n pr

otec

ting

and

impr

ovin

g th

e en

viro

nmen

t as w

ell a

s

prev

entin

g an

d co

ntro

lling

pol

lutio

n an

d ot

her

publ

ic h

azar

ds, a

nd im

prov

e th

e ef

ficie

ncy

of

usin

g fis

cal f

unds

.

Arti

cle

11: G

over

nmen

ts sh

all g

rant

aw

ards

to

entit

ies a

nd in

divi

dual

s tha

t mak

e ou

tsta

ndin

g

cont

ribut

ions

to t h

e pr

otec

tion

and

impr

ovem

ent o

f the

env

ironm

ent.

Arti

cle

21: T

he S

tate

shal

l ado

pt p

olic

ies a

nd

mea

sure

s in

resp

ects

of f

inan

ce, t

ax, p

rice,

and

gove

rnm

ent p

rocu

rem

ent t

o en

cour

age

and

supp

ort t

he d

evel

opm

ent o

f env

ironm

enta

l

prot

ectio

n in

dust

ries r

elat

ed to

env

ironm

enta

l

prot

ectio

n te

chno

logi

es a

nd e

quip

men

t,

inte

grat

ed u

se o

f res

ourc

es, a

nd e

nviro

nmen

tal

serv

ices

.

Arti

cle

22: F

or e

nter

pris

es a

n d in

stitu

tions

and

othe

r pro

duce

rs a

nd o

pera

tors

that

furth

er

redu

ce th

e di

scha

rge

of p

ollu

tant

s bas

ed o

n th

e

lega

l req

uire

men

ts fo

r dis

char

ge o

f pol

luta

nts,

the

peop

le's

gove

rnm

ents

shal

l enc

oura

ge a

nd

supp

ort t

hem

by

usin

g po

licie

s and

mea

sure

s in

resp

ects

of f

inan

ce, t

ax, p

rice,

and

gov

ernm

ent

proc

urem

ent i

n ac

cord

ance

with

the

law

.

See

Art

icle

21

colu

mn

See

Art

icle

22

See

Art

icle

21

See

Ar t

icle

22

95

Cle

aner

Prod

uctio

n

Prom

otio

n La

w

NPC

Arti

cle

7: T

he S

tate

Cou

ncil

shal

l for

mul

ate

fisca

l

and

tax

polic

ies

cond

uciv

e to

the

impl

emen

tatio

n of

clea

ner p

rodu

ctio

n.

Arti

cle

34: F

undi

ng fr

om th

e Sm

all-

and

Med

ium

-

Size

d En

terp

rise

Dev

elop

men

t Fun

d es

tabl

ishe

d in

acco

rdan

ce w

ith n

atio

nal r

egul

atio

ns s

hall

be se

t

asid

e to

supp

ort c

lean

er p

rodu

ctio

n fo

r sm

all-

and

med

ium

-siz

ed e

nter

pris

es in

acc

orda

nce

wit h

thei

r

need

s.

See

Art

icle

7 A

rticl

e 35

: With

resp

ect t

o pr

oduc

ts p

rodu

ced

from

was

tes

and

mat

eria

ls

recl

aim

ed fr

om w

aste

s, th

e

taxa

tion

auth

oriti

es sh

all r

educ

e

or e

xem

pt th

ese

from

val

ue-

adde

d ta

x in

acc

orda

nce

with

rele

vant

nat

iona

l reg

ulat

ions

.

Arti

cle

32: T

he p

eopl

e's g

over

nmen

ts s

hall

give

com

men

datio

ns a

nd re

war

ds to

thos

e un

its a

nd

indi

vidu

als t

hat h

ave

mad

e co

nspi

cuou

s

achi

evem

ents

in th

e w

ork

of re

aliz

ing

clea

ner

prod

uctio

n.

Cir

cula

r

Econ

omy

Prom

otio

n La

w

NPC

Arti

cle

42: S

tate

Cou

ncil

and

prov

inci

al/m

unic

ipal

gove

rnm

ents

hav

e es

tabl

ishe

d sp

ecifi

c fu

ndin

g fo

r

the

prom

otio

n of

circ

ular

eco

nom

y, s

uppo

rting

the

oper

atio

n of

key

circ

ular

eco

nom

y in

dust

rial

proj

ects

Arti

cle

44: T

he S

tate

off

ers

pref

eren

tial t

ax ra

te fo

r

indu

stria

l pro

ject

s tha

t pro

mot

e

circ

ular

eco

nom

y

Arti

cle

45: F

or p

roje

cts

on c

ompr

ehen

sive

utili

zatio

n of

reso

urce

s, fin

anci

al in

stitu

tions

shal

l

prov

ide

pref

eren

tial l

oan

supp

ort a

nd o

ffer

rele

vant

finan

cial

ser

vice

s

Envi

ronm

enta

l

Prot

ectio

n Ta

x

Law

NPC

N

/AN

/A

Arti

cle

4: W

here

an

ente

rpris

e,

publ

ic in

stitu

tion

or a

ny o

ther

prod

ucer

or o

pera

tor f

alls

und

er

any

of th

e fo

llow

ing

circ

umst

ance

s, it

shal

l not

be

deem

ed a

s di

rect

ly d

isch

argi

ng

pollu

tant

s to

the

envi

ronm

ent,

and

shal

l not

pay

env

ironm

enta

l

prot

ectio

n ta

x on

the

corr

espo

ndin

g po

lluta

nts:

(1) I

t dis

char

ges t

axab

le

pollu

tant

s to

a ce

ntra

lized

sew

age

or d

omes

tic g

arba

ge

treat

men

t site

est

ablis

hed

in

acco

rdan

ce w

ith th

e la

w.

(2) I

t sto

res

or d

ispo

ses

of s

olid

was

tes

at a

ny fa

cilit

y or

site

that

mee

ts th

e na

tiona

l and

loca

l

envi

ronm

enta

l pro

tect

ion

stan

dard

s.

N/A

N/A

96

Rene

wab

le

Ener

gy L

aw

NPC

Arti

cle

24: T

he S

tate

sets

up

spec

ific

fund

ing

to

supp

ort k

ey d

emon

stra

tion

proj

ects

whi

ch

appl

y re

new

able

ene

rgy.

N/A

N/A

N

/AN

/A

Ener

gy

Con

serv

atio

n

Law

NPC

Arti

cle

60: C

entra

l and

pro

vinc

ial g

over

nmen

t

set u

p sp

ecifi

c fu

ndin

g to

faci

litat

e th

e

impl

emen

tatio

n of

key

ene

rgy-

savi

ng in

dust

rial

proj

ect.

Arti

cle

62: T

he S

tate

impl

emen

ts p

refe

rent

ial

taxa

tion

polic

ies f

or e

nerg

y-

savi

ng p

roje

cts o

r act

iviti

es.

Arti

cle

65: T

he S

tate

gui

des f

inan

cial

inst

itutio

ns to

pro

vide

pre

fere

ntia

l loa

ns fo

r

proj

ects

und

er e

nerg

y-sa

ving

upg

rade

.

Actio

n Pl

an

for W

ater

Pollu

tion

Prev

entio

n

and

Con

trol

MEP

N

/AN

/A

Arti

cle

14: F

urth

er im

prov

e

the

pref

eren

tial t

axat

ion

polic

ies a

nd e

nsur

e so

lid

impl

emen

tatio

n of

the

polic

ies f

or c

ompr

ehen

sive

utili

zatio

n of

reso

urce

s.

Arti

cle

16: E

stab

lish

ince

ntiv

e sc

hem

es a

nd

enco

urag

e in

dust

rial z

ones

to u

se w

ater

reso

urce

mor

e ef

ficie

ntly

(rea

ch h

ighe

r

stan

dard

s). S

uppo

rt de

mon

stra

tion

proj

ects

rega

rdin

g cl

ean

prod

uctio

n, w

ater

savi

ng, a

nd

pollu

tion

cont

rol.

Arti

cle

17: P

rom

ote

gree

n fin

ance

. Fin

anci

al

inst

itutio

ns su

ch a

s sta

te-o

wne

d po

licy-

rela

ted

bank

s sha

ll su

ppor

t pro

ject

s rel

ated

to c

ircul

ar

econ

omy

and

clea

n pr

oduc

tion.

Nat

iona

l

polic

ies

Gen

eral

Gui

delin

e on

the

Inst

itutio

nal

Refo

rm o

f

Ecol

ogic

al

Civ

iliza

tion

Stat

e

Cou

ncil

N/A

N

/A

Sect

ion

8, p

arag

raph

45:

Est

ablis

h gr

een

finan

ce sy

stem

. Enc

oura

ge fi

nanc

ial

inst

itutio

ns to

incr

ease

the

issu

ance

of “

gree

n

loan

s” a

nd su

ppor

t gre

en c

redi

ts th

roug

h

inte

rest

subs

idy

from

pub

lic fi

nanc

e; e

ncou

rage

finan

cial

inst

itutio

ns a

nd e

nter

pris

es to

issu

e

gree

n bo

nds;

furth

er su

ppor

t the

use

of g

reen

insu

ranc

e in

sect

ors w

ith h

igh

envi

ronm

enta

l

risks

.

97

Not

ice

by th

e

Stat

e C

ounc

il

on th

e “M

ade

in C

hina

202

5”

Proj

ect

Stat

e

Cou

ncil

Sect

ion

4, p

arag

raph

4: S

treng

then

fisc

al su

ppor

t

from

pub

lic fi

nanc

e to

rele

vant

pro

ject

s and

incr

ease

the

effic

ienc

y of

the

use

of p

ublic

finan

cing

.

Sect

ion

4, p

arag

raph

4:

Impl

emen

t pre

fere

ntia

l tax

atio

n

polic

ies f

or th

e tra

nsfo

rmat

ion

and

upgr

ade

of th

e

man

ufac

turin

g se

ctor

; car

ry

forw

ard

refo

rms i

n va

lue-

adde

d

tax

t o re

leas

e th

e ta

xatio

n

burd

en fo

r man

ufac

turin

g

ente

rpris

es

Sect

ion

4, p

arag

raph

3: F

urth

er im

prov

e su

ppor

tive

finan

cial

pol

icie

s for

the

“Mad

e in

Chi

na 2

025”

proj

ect;

expa

nd th

e so

urce

s of f

inan

cing

and

low

er

the

cost

of c

apita

l col

lect

ion

for t

he m

anuf

actu

ring

sect

or; e

ncou

rage

dev

elop

men

t ban

ks to

incr

ease

the

amou

nt o

f loa

ns to

man

ufac

turin

g fir

ms;

esta

blis

h a

mul

ti-le

vel c

apita

l mar

ket a

nd

enco

urag

e ca

pabl

e fir

ms t

o co

llect

cap

ital t

hrou

gh

IPO

s [in

itial

pub

lic o

ffer

ings

] and

var

ious

type

s of

finan

cial

inst

rum

ents

.

The

13th F

ive-

Yea

r Pla

n on

the

Econ

omic

and

Soci

al

Dev

elop

men

t

ND

RC

Arti

cle

43-7

: Est

ablis

h an

d im

prov

e th

e in

cent

ive

sche

mes

for e

nviro

nmen

tal p

rote

ctio

n. E

xpan

d

fisca

l pol

icie

s whi

ch p

rom

ote

ener

gy sa

ving

and

pollu

tion

redu

ctio

n

N/A

N

/A

Actio

n Pl

an fo

r

Lead

ing

Cir

cula

r

Econ

omy

Dev

elop

men

t

ND

RC

Sect

ion

8, p

arag

raph

37:

The

Act

ion

Plan

pro

pose

s

to fi

nanc

ially

supp

ort p

roje

cts r

elev

ant t

o ci

rcul

ar

econ

omy

trans

form

atio

n an

d de

velo

pmen

t thr

ough

the

use

of fu

nds f

rom

pub

lic fi

nanc

e, a

nd fu

rther

incr

ease

the

effic

ienc

y of

usi

ng p

ublic

fina

nce.

Sect

ion

8, p

arag

raph

36:

Pref

eren

tial t

axat

ion

polic

ies f

or

proj

ects

or e

nter

pris

es th

at u

se

reso

urce

s com

preh

ensi

vely

for

prod

uctio

n.

Sect

ion

8, p

arag

raph

37:

Pro

mot

e th

e us

e of

gre

en

cred

its, g

reen

bon

ds, i

nsur

ance

fund

s, an

d gr

een

indu

stry

fund

s to

supp

ort c

ircul

ar e

cono

my

trans

form

atio

n pr

ojec

ts;

enco

urag

e th

e PP

P m

odel

and

invo

lve

mor

e pr

ivat

e

capi

tal i

nto

gree

n in

vest

men

ts.

Gui

delin

es o

n

the

Man

agem

ent o

f

Nat

iona

l Eco

-

IPs

MEP

,

MO

C,

MO

ST

Arti

cle

32: P

rovi

ncia

l or l

ocal

gov

ernm

ents

shou

ld

set u

p sp

ecifi

c fu

nds o

r off

er p

refe

rent

ial t

ax ra

tes

for E

IPs t

hat c

arry

forw

ard

proj

ects

on

infr

astru

ctur

e fo

r pol

lutio

n co

ntro

l, co

mpr

ehen

sive

utili

zatio

n of

reso

urce

s, an

d ec

o-in

dust

rial c

hain

s

Arti

cle

32: P

rovi

ncia

l or l

ocal

gove

rnm

ents

shou

ld se

t up

spec

ific

fund

s or o

ffer

pref

e ren

tial t

ax ra

tes f

or E

IPs

that

ca

rry

forw

ard

proj

ects

on

infr

astru

ctur

e fo

r pol

lutio

n

cont

rol,

com

preh

ensi

ve

utili

zatio

n of

reso

urce

s, an

d ec

o-

indu

stria

l cha

ins

N/A

98

Gui

ding

Not

ice

on

Stre

ngth

enin

g

the

Dev

elop

men

t of

Nat

iona

l Eco

-

IPs

MEP

,

MO

C,

MO

ST

Sect

ion

5, p

arag

raph

22:

The

Gui

ding

Not

ice

enco

urag

es p

ublic

fund

s for

ene

rgy

cons

erva

tion

and

emis

sion

redu

ctio

n, g

reen

dev

elop

men

t,

tech

nolo

gica

l inn

ovat

ion,

and

env

ironm

enta

l

prot

ectio

n at

pro

vinc

ial a

nd lo

cal l

evel

to le

an

tow

ard

the

deve

lopm

ent o

f EIP

s. Pu

blic

fund

s tha

t

spec

ifica

lly su

ppor

t EIP

dev

elop

men

t ar e

enco

urag

ed to

be

esta

blis

hed

to p

rovi

de fi

scal

subs

idy

for t

he e

stab

lishm

ent o

f EIP

s.

Sect

ion

5, p

arag

raph

22:

Loa

ns

with

pre

fere

ntia

l int

eres

t rat

e

and

pref

eren

tial t

axat

ion

polic

y

are

also

requ

ired

to b

e in

pla

ce

to a

ssis

t key

pro

ject

s and

rese

arch

with

in E

IPs.

Sect

ion

5, p

arag

raph

22:

In a

dditi

on, t

he G

uidi

ng

Not

ice

also

enc

oura

ges I

Ps to

est

ablis

h “s

peci

al

cons

truct

ion

fund

s” fo

r EIP

dev

elo p

men

t to

supp

ort p

roje

cts o

n pa

rk p

lann

ing,

infr

astru

ctur

e

shar

ing,

and

indu

stria

l sym

bios

is, a

s wel

l as t

he

capa

city

bui

ldin

g of

IPs (

for e

xam

ple,

thro

ugh

info

rmat

ion

shar

ing

plat

form

s, co

nsul

ting

serv

ices

,

inno

vatio

n ac

tiviti

es, a

nd R

&D

).

Plan

for

Indu

stri

al

Gre

en

Dev

elop

men

t

(201

6−20

20)

MII

T

Sect

ion

4, p

arag

raph

3: F

urth

er st

reng

then

and

mak

e ef

fect

ive

use

of su

ppor

tive

fisca

l pol

icie

s

(fun

ding

from

the

cent

ral g

over

nmen

t’s b

udge

t,

spec

ial f

unds

for c

onst

ruct

ion,

oth

er fu

nds r

elev

ant

to te

chno

logi

cal t

rans

form

atio

n, e

nerg

y

cons

erva

tion

and

emis

sion

redu

ctio

n, c

lean

prod

uctio

n, a

nd g

over

nmen

t pro

cure

men

t of g

reen

prod

ucts

, as w

ell a

s fin

anci

ng fr

om p

ublic

-priv

ate

partn

ersh

ip) i

n pr

omot

ing

the

deve

lopm

ent o

f gre

en

IPs,

gree

n fir

ms,

and

the

gree

n m

anuf

actu

ring

syst

em o

vera

ll.

Sect

ion

4, p

arag

raph

3: F

urth

er

stre

ngth

en a

nd m

ake

effe

ctiv

e

use

of su

ppor

tive

taxa

tion

polic

ies (

pref

eren

tial t

axat

ion

polic

y) in

pro

mot

ing

the

deve

lopm

ent o

f gre

en IP

s, gr

een

firm

s, an

d th

e gr

een

man

ufac

turin

g sy

stem

ove

rall.

Sect

ion

4, p

arag

raph

4: F

urth

er in

crea

se th

e us

e of

gree

n fin

ance

(exp

and

the

scal

e of

gre

en c

redi

ts

and

gree

n bo

nds,

esta

blis

h gr

een

indu

stry

deve

lopm

ent f

unds

, inn

ovat

e ne

w g

reen

fina

ncia

l

inst

rum

ents

and

serv

ices

, lin

k “g

reen

per

form

ance

”

of fi

rms t

o th

eir c

redi

t rat

ing,

enc

oura

ge fi

nanc

ial

inst

itutio

ns to

pro

vide

mor

e co

nven

ient

and

pref

eren

tial c

redi

t sup

port

and

guar

ante

e se

rvic

e

for t

he g

reen

tran

sfor

mat

ion

of S

ME s

) in

prom

otin

g th

e de

velo

pmen

t of g

reen

IPs,

gree

n

firm

s, an

d th

e gr

een

man

ufac

turin

g sy

stem

ove

rall.

99

Stan

dard

s and

indi

cato

rs

Not

ice

on th

e

Esta

blis

hmen

t

of a

Gre

en

Man

ufac

turi

n

g Sy

stem

MII

T

Sect

ion

6, p

arag

raph

2: M

IIT

will

use

“fu

nds

for i

ndus

trial

tran

sfor

mat

ion

and

upgr

ade”

(工

业转

型升

级资

金),

spec

ial f

unds

for

cons

truct

ion

(专项

建设

基金

), an

d ot

her

supp

ortiv

e fin

anci

al p

olic

ies t

o as

sist

the

build

ing

of a

gre

en m

anuf

actu

ring

syst

em

(incl

udin

g gr

een

fact

orie

s, gr

een

prod

ucts

,

gree

n IP

s, an

d gr

een

indu

stria

l cha

ins)

.

Furth

erm

ore,

pro

duct

s fro

m th

e gr

een

man

ufac

turin

g sy

stem

are

prio

ritiz

ed in

gove

rnm

ent p

rocu

rem

ent.

N/A

Sect

ion

6, p

arag

raph

2: M

IIT

will

use

gre

en

cred

its a

nd o

ther

supp

ortiv

e fin

anci

al p

olic

ies

to a

ssis

t the

bui

ldin

g of

a g

reen

man

ufac

turin

g

syst

em (i

nclu

ding

gre

en fa

ctor

ies,

gree

n

prod

ucts

, gre

en IP

s, an

d gr

een

indu

stria

l

chai

ns);

MII

T en

cour

ages

fina

ncia

l ins

titut

ions

to

prov

ide

pref

eren

tial f

inan

cial

supp

ort f

or

indu

stria

l zon

es a

nd e

nter

pris

es th

at p

rom

ote

gree

n m

anuf

actu

ring

Not

ice

on

Reco

mm

end-

ing

Key

Can

dida

te IP

s

for C

ircu

lar

Econ

omy

Tran

sfor

ma-

tion

in 2

017

ND

RC

Sect

ion

3, p

arag

raph

3: T

hrou

gh a

sses

smen

t

and

reco

mm

enda

tion

at p

rovi

ncia

l lev

el, a

nd

eval

uatio

n an

d se

lect

ion

by th

e N

DR

C a

nd

MO

F at

nat

iona

l lev

el, c

erta

in in

vest

men

t

proj

ects

in th

e im

plem

enta

tion

plan

pro

pose

d

by se

lect

ed IP

s are

fina

ncia

lly su

ppor

ted

by th

e

MO

F an

d N

DR

C b

y us

ing

fund

s fro

m th

e

cent

ral g

over

nmen

t’s b

udge

t (th

e sp

ecifi

c

mon

etar

y am

ount

dep

ends

on

each

yea

r’s

finan

cial

bud

get).

N/A

N

/A

So

urce

: Wor

ld B

ank

com

pila

tion

Not

e: E

IP =

eco

-indu

stria

l par

k;

MEE

= M

inis

try o

f Eco

logy

and

Env

ironm

ent;

MII

T =

Min

istry

of I

ndus

try a

nd In

form

atio

n Te

chno

logy

; N

DR

C =

Nat

iona

l Dev

elop

men

t and

Ref

orm

Com

mis

sion

100

Source: World Bank compilationNote: MEE = Ministry of Environment Protection; MIIT = Ministry of Industry and Information Technology; NDRC = National Development and Reform Commission.

Appendix H. Comparison between the Chinese EIP standards

101

Source: WBG, UNIDO, and GIZ (2017).

Figure I.1 Core EIP categories and topics

Appendix I. An overview of the WBG/UNIDO/GIZ International Framework for EIPs

Aims and Objectives

Despite the growing interest for eco-industrial parks (EIPs) globally, the lack of national or international standards has become an obstacle to their development and credibility. Many IP have claimed the “eco” label, but the concrete features this refers to on the ground differ widely (UNIDO 2016). The aim of the EIP Frame-work published by the World Bank, UNIDO, and GIZ in December 2017 is to provide a common set of EIP standards, which could be relevant model for all countries willing to promote EIPs and use them as a basis to develop national standards. The EIP framework can thus guide policy makers and practitioners to identify the critical elements that governments and the private sector should focus on establishing for sustainable EIPs.

The EIP framework is intended to apply to all types of existing and planned IPs in developed, transition, and developing countries, covering all industrial sectors. It is expected to provide a common understanding of EIP at the international level, with broadly applicable performance requirements that can be tailored to national contexts.

Requirements for EIPs

The EIP framework divides EIP performance requirements into four categories, namely: park management performance, environmental performance, social performance, and economic performance. Core topics under each category are presented in Figure I.1.

102

Compliance with applicable national and local regulations is a prerequisite for all EIPs, whatever the geograph-ical location and specific characteristics of the park. The performance requirements for EIPs in this framework aim to go beyond compliance with local and national environmental and social regulations (“Compliance Plus”). EIPs are encouraged to go beyond these requirements and performance expectations where it is techni-cally, socially, and financially feasible and cost effective to do so.

The requirements within each category are divided into prerequisites and performance indicators. To be deemed an EIP, a park is expected to be compliant with all relevant prerequisites and performance expectations. The EIP performance requirements set the baseline expectations for EIPs globally, although sensitivity to local contexts is required (for example, when setting thresholds for fuel and industry mix, energy intensity, waste disposal, as well as requirements of the higher-level governance structures, institutions, regulating bodies, and so on).

103

Figure J.1 Potential incentives for complying with EIP standards

Appendix J. Examples of potential incentives for complying with EIP standards

Incentives are a key factor determining the willingness and motivation of an industrial park (IP) to become green and seek compliance with eco-industrial park (EIP) standards. Figure J.1 lists potential incentives for complying with EIP standards, which can be divided into two mutually supportive categories: financial incen-tives and nonfinancial incentives.

Government subsidy

Access to green finance

Preferential tax rate

Domestic and foreign investment

Improved green image

Improved productivity

Compliance with internationalbuyer's standards

Better relations with local communities

Reduced exposure to environmental and social risks

Enhanced innovation

Fina

ncia

l inc

entiv

es

Non

-fin

anci

al in

cent

ives

Source: World Bank.

104

Box J.1 Influence of foreign investment on environmental awareness

Financial incentives

Major financial incentives to comply with the EIP Framework include:

-Access to government subsidy: Compliance with domestic and international EIP standards would potentially help IPs obtain government subsidies. For example, the National Development and Reform Commission (NDRC) directly offers subsidies to selected investment projects proposed by “circular economy upgrade” demonstration parks.

-Better access to green financing: Becoming certified as an EIP can enhance access to the growing set of green finance opportunities offered both by the public and private sectors (see Chapter 5).

-Preferential tax rate: The third potential financial incentive for compliance with green standards, subject to fiscal constraints, could be lower tax rates for tenant companies in EIPs. Such an approach could be piloted in selected parks and, if successful, rolled out to the rest of the country.

-Domestic and foreign investment: Meeting green standards (especially international standards) could bring IPs additional foreign investment, especially in the environmentally sensitive high-value-added industries. In addition, increased foreign investment (from economically and environmentally more advanced countries) would also help increase environmental awareness through more stringent environmental standards on production and higher environmental management targets (Box J.1.).

Thang Long IP Corporation (TLIP) in Vietnam is a Japanese-Vietnamese initiative that targets compa-nies with investment projects that use modern and high-end manufacturing technologies that are also environmentally friendly, clean or/and energy-efficient. Reported achievements in environmental management have been the treatment of wastewater, emissions and odor (companies must install their own systems), treatment of solid and hazardous waste, and management of trees and plants (23 percent of area cover).

Given that all the companies in TLIP are Japanese or Japan-Vietnam joint ventures, the average environmental awareness level is considerably high. This understanding of environmental responsibili-ty, together with the requirement of the TLIP Corporation, has resulted in the tenant companies adher-ing to high environmental management targets. The best examples of these companies include leading Japanese electronics companies such as Panasonic and Canon. These companies are pursuing policies guided by an ecoefficiency perspective, especially toward energy and materials. For example, Panason-ic is creating model factories that not only develop eco-products according to sustainable industry practices, but also take a lead role in promoting greater eco-awareness in the community through outreach activities.

Source: UNIDO (2016).

105

Nonfinancial incentives

Major nonfinancial incentives include:

- Improved green image: Becoming an internationally certified EIP can make a park a role model at both the international and national level and enhance its corporate social responsibility (CSR). This, in turn, could increase its attractiveness vis-à-vis domestic and foreign investors.

- Improved productivity: A natural advantage of complying with the green standards is improved productiv-ity with more efficient use of resources. Both the Chinese standards and the EIP Framework have require-ments on energy/resource efficiency and the reuse and recycle of resources.

- Compliance with international buyers’ standards: Meeting the EIP Framework requirements and becom-ing recognized as an international EIP would bring parks benefits in terms of attractiveness for international buyers. With increasing environmental awareness worldwide, buyers would increasingly prefer products made by green manufacturers in EIPs. Some international buyers follow or set procurement standards to ensure the “greenness” of the products they purchase. Compliance with domestic and international green standards would attract such “green buyers,” and thus incentivize the development of EIPs.

- Better relations with local communities: The EIP Framework has a specific focus on socioeconomic performance of IPs, measuring parks’ performance in driving the local economy and local employment. Requirements on environmental performance would also provide a cleaner and healthier environment for local residents through pollution control and environmental quality monitoring. Meeting such requirements would help IPs establish better relations with the local community, which is, in return, beneficial to the steady and long-term development of IPs. Reciprocal relationships could potentially incentivize IPs to comply with EIP standards.

- Reduced exposure to environmental and social risks: Compliance with both domestic and international green standards (especially on environmental and social performance) also means strengthened capacity in environmental and social risk management, reducing environmental and social risks.

- Enhanced innovation: The innovative capacity of IPs could also be enhanced through projects and capaci-ty building in the context of meeting EIP requirements, which improves the overall competitiveness of IPs.

106

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