Although many attribute this drive to China's famous pool of cheap labor, it's also the central government's attitude towards this global issue that makes China a magnet for clean tech companies. "The Chinese are striving to think differently about the economy and the environment," said Sir Crispin Tickell, Director of the Policy Foresight Programme at the James Martin Institute for Science and Civilization and a founder member of the China Council for International Cooperation on Environment and Development, at a talk given in February 2007 as part of the China Seminar Series at the Saïd Business School. (2)
"Within China the environmental cost may be high, even unworkable. But the government seems well aware of the risks and hazards, and knows better than its critics that it has to do a lot more to look after the only China, indeed the only Earth, there is. They may turn out to be pioneers in doing so." (2)
In addition, China's enormous pollution problem has turned it into a breeding ground for companies seeking to find solutions to the world's pollution problems. A recent report from the World Bank recently listed 16 of the world's 20 most polluted cities in China, and by some estimates "China has now overtaken America to become the world's largest producer of greenhouse gases." (3) "The pollution that has resulted from China's growth is a huge problem, but to investors it presents an enormous opportunity. Venture-capital investment in clean tech in China is picking up, increasing by 147% from $170m in 2005 to $420m last year." (3)
It is the combination of all these things that means that China "has the opportunity to be at the forefront in finding solutions to the energy problem that the world faces", says Richard Branson, a world-famous British businessman who has invested in a range of clean-tech technologies. (3)
And these opportunities are no secret to big business or even foreign government agencies. GE, for example, launched Ecomagination in May of 2005, aiming to achieve annual sales of US$20 billion in 2010 from environmentally friendly products and solutions but has already vastly exceeding it's current estimates, releasing figures that showed that sales from its
Ecomagination products have reached US$10.1 billion in 2005, up from US$6.2 billion in 2004 (4)
China has even caught the attention of the U.S. Environmental Protection Agency (EPA), which has recently agreed to collaborate with the U.S. Business Council for Sustainable Development (US BCSD) on international sustainable development projects in China and other parts of the globe. (5) "The initial focus will be on China, where EPA and the BCSD will build on existing relationships with the China Business Council for Sustainable Development and the Chinese State Environmental Protection Agency." (5)
And all this seems to be coming at the perfect time for American businesses as a recent study just released suggests that "A growing majority of corporate decision makers will consider green credentials when selecting future outsourcing companies." (6)
"Brown-Wilson Group, a Florida company that studies the outsourcing industry, generated a green-related sub-survey while questioning companies for its larger 'State of Outsourcing Industry' report. The company concluded that more corporations are dumping environmentally-unfriendly outsourcers in a trend expected to continue." (6)
Although all of this is still in the early stages, there is no doubt in the minds of world's global players and visionary thinkers that China will be, and in most cases, has already become the fore-runner in solving the environmental problems that have just recently begun to receive widespread media attention in the states. Although this recent survey found that "Public companies are more likely to work green practices into future outsourcing contracts because of regulatory, shareholder and customer concerns," there's no reason why smaller private businesses shouldn't also think about green practices and how they could be implemented them into their operations; In fact, these trends are becoming practically impossible for any responsible business owner, of any size, to continue to ignore.
This article was written by Gary Isse, CEO of First Choice China Consulting, Ltd. Gary is an American businessman and entrepreneur who is currently in Hong Kong and Shenzhen, China, and holds an MBA in Business Administration. For more information, please visit his web site at
http://www.1stChoiceChinaConsulting.com
(1) Woody, Todd (2006, November 30). China's Green Tech Boom. Retrieved August 21, 2007, from Green Wombat Web site: http://blogs.business2.com/greenwombat/2006/11/chinas_green_te.html
(2) Tickell, Crispin (2007, April 2). China's green revolution. Retrieved August 21, 2007, from Oxford Said Business School Web site: http://www.sbs.ox.ac.uk/news/archives/Events/Chinas+green+revolution.htm
(3) Green Shoots, (2007, July 19). A new venture hopes to promote clean-technology investment in China. Retrieved August 21, 2007, from The Economist Print Edition Web site: http://www.economist.com/business/displaystory.cfm?story_id=9517615
(4) Baijia, Liu (2006, May 30). GE pushes 'green' business. Retrieved August 21, 2007, from China Daily Web site: http://www.chinadaily.com.cn/bizchina/2006-05/30/content_603659.htm
(5) Ryan, Dave (2007, July 31). EPA, U.S. Business Council Commit to Sustainable Green Projects in China, Other Parts of World, To Reduce Greenhouse Gases. Retrieved August 21, 2007, from EPA Newsroom Web site:
http://yosemite.epa.gov/opa/admpress.nsf/b853d6fe004acebf852572a000656840/c178f6cff8cd0721852573290050b534!OpenDocument
(6) GreenBiz, (2007, August 20). (More Companies Want Outsource Vendors to Green Operations: Survey. Retrieved August 21, 2007, from GreenBiz News Web site: http://www.greenbiz.com/news/news_third.cfm?NewsID=35755
