What Kind of Green is China After?

Roots

Sustainability

Emily Pan This paper discusses China’s operations on becoming the powerhouse in economic

development, and how the country is pursuing sustainability in the midst of a growing time

period. The cost of the environment for monetary gain is analyzed, particularly through the

comparison of urban cities (Shanghai), second-tier cities (Changzhou, Hangzhou), and rural

towns (Lijiang). Sustainable practices are also analyzed through multinational companies’

involvements and how Corporate Social Responsibility influences environmental values. The

“green” China is racing for is further examined through a Wal-Mart case study and China’s

environmental laws.

What Kind of Green is China After?

S p r i n g 2 0 1 1 R e s e a r c h P a p e r P r o f e s s o r Y e

2 WHAT KIND OF GREEN IS CHINA AFTER?

Table of Contents

Introduction.................................................................................................................... 3

Race for the Green vs. Race to be Green .................................................................... 4

Lijiang (Yunnan Province), China ..........................................................................................5

Shanghai, China.......................................................................................................................9

Rural Areas Versus Urban Areas ............................................................................... 11

Second-Tier Cities .................................................................................................................12

Green Supply Chain: The Chase for the Green ........................................................ 14

Multinational Company Case Study: Wal-Mart ......................................................... 15

Wal-Mart in China ..................................................................................................................17

Corporate Social Responsibility (CSR) ..................................................................... 18

Bacardi Limited in China.......................................................................................................19

Roots & Shoots: The Million Tree Project ...........................................................................20

Conclusions ................................................................................................................. 21

Figure 1. Map of China (Source: Lonely Planet)

WHAT KIND OF GREEN IS CHINA AFTER? 3

Introduction

During a busy afternoon in the office, my

supervisor offered an exchange of U.S. dollar bills

for some Chinese Yuan1. “In exchange for some

green bills, I want you to enforce some unripe,

green ideas for our Corporate Social Responsibility

program and place them on our idea tree.” Little

did I know that I began planting my own ideas of

“what it means to be sustainable in China”, how

corporations have the power to make a social

difference, and the manner in which the pursuit of

both economic and environmental goals can be

obtained simultaneously. The idea of “money versus trees” suddenly became the focal point for

investigating the fragile balance between monetary gain and sustainable practice. The themes of

this paper outline the different perspectives of China’s rural and urban life, which sustainable

practices are carried out in each environment, and how they fit into China’s overall sustainability

pursuits. On the face of it, it seems that China is pursuing the green that will fund its economy

and fulfill its aspirations for world power status. At times, however, the nation does surprise all

and prove that it can pursue both goals at the same time. Concurrently, the private sector plays

its own role in promoting eco-friendly habits, unrelated to the efforts made by the Chinese

government. China is a big place. Therefore, the future of sustainability in China is an unclear

one. It is one that will involve a combination of actions undertaken by both China’s private and

public sectors, the region in question, and the opportunity cost—for both public and private

actors, and in both the present and future—of achieving environmental goals.

As one of the many exchange students in Shanghai, my time is consumed of dedicating

25 hours a week to an internship, while attending 15 hours of class a week and bellowed by a

dense two hour daily commute. In the morning, I ride the subway to class for 15 stops. When I

am running behind schedule, I hop into a cab, saving me the 15-minute walk to the subway, or

1 The Chinese currency, Yuan, will be used interchangeably with Renmingbi (RMB)

Figure 2. Bacardi Tree with ideas written on apple

post-it notes. A meeting is held on a monthly basis

to execute some “idea” projects and enhance the

company culture.

4 WHAT KIND OF GREEN IS CHINA AFTER?

even treat myself on exam days to a 15 kilometer-ride to Fudan University’s campus area. Most

of the time, there is a tradeoff between reserving time to commute and saving time to studying or

working; everyday, I find myself calculating the opportunity costs between conserving money

and conserving carbon energy—constantly battling between becoming green sustainably rather

than looking green for spending an excess amount of money on transportation. Taking account of

my firsthand experience, I have been breathing in daily amounts of economic development and

living in a momentous time period.

Over the course of my research, I have focused on discovering China’s goals and

ambitions by differentiating between effective and ineffective solutions. I interviewed expatriates

and Chinese citizens involved with sustaining businesses, participated in non-profit organizations’

volunteer events, and visited second-tier cities as well as rural villages. While many

interviewees’ opinions of course are subjective, it is important to grasp the local citizens’

perspective on the development of a nation. We can therefore have a more rounded viewpoint,

rather than merely an academic view on such a vital topic.

My stay in Shanghai and trips to Jiangsu, Zhejiang, and Yunnan province exposed me to

the standard of living in China, and how it ties back to the Chinese people’s environmental

values. I also achieved an understanding of the immense gap between the aristocrats and migrant

workers. The following topics will be explained: comparisons between China’s rural and urban

life, operations of non-profit organizations within China, along with multinational companies’

(MNCs) Corporate Social Responsibility (CSR) and green supply chain in China.

Race for the Green vs. Race to be Green

China’s environmental crisis has arisen, basically, because our mode of

economic modernization has been copied from Western, developed nations. In

twenty years, China has achieved economic results that took a century to attain in

the West. But we have also concentrated a century’s worth of environmental

issues into those twenty years. While becoming the world leader in GDP growth

and foreign investment, we have also become the world’s number one consumer

of coal, oil, and steel—and the largest producer of CO2…In China, pollution has

14 WHAT KIND OF GREEN IS CHINA AFTER?

the Boston University students; every employee had a different, repetitive role and worked

silently. Some heat-pressed the same section of a jacket while other sewed on buttons or zippers.

I realized they were using German engineered machines, and wondered if the factory

workers were able read the machines’ brand names. Changzhou represents one of the many

developing cities similar to the ones found in Leslie Chang’s Factory Girls, where young women

working in factories make only a meager few hundred Yuan a month. The New York Times

describes “this vast and ceaselessly renewed workforce has built China’s cities, throwing up

skyscrapers at a rate never seen before, and has filled China’s factories, churning out ever

cheaper goods in ever greater quantities to fuel the double-digit growth that has reshaped the

world’s economy”. 28 Changzhou was another depiction of an inexpensive, labor-intensive

factory area. Unregulated factory standards and unsanitary bathroom standards could potentially

cost a developed country’s reputation. However, developing countries are usually more

concerned with production output rather than, for instance, being concerned with supplying

bathroom necessities, or with calculating the factory pollutant’s monthly numbers; the issue of

having phenomenal visual architecture on the outside and emanating the same superior quality

on the inside takes a turmoil on the representation of many factories. Examples like these remind

the external community that China is still a developing country. The reasons for building a

factory from raw materials and cutting down trees were all moving towards one goal—economic

development—and moving further away from environmental preservation.

Green Supply Chain: The Chase for the Green

“Sustainability represents the biggest business opportunity of the 21st century,”

–Jib Ellison, founder of BluSky Sustainability Consultancy

Green Supply Chain is yet another way to uphold “bringing in profit” with ethical

integrity. After an interview with Shelton Chan (head of supply chain management from

Resources Global Professionals, an international consultancy agency), he defined “green supply

chain” as a value-added service derived from corporate social responsibilities (CSR). From the

end product suppliers to the supplier’s base product suppliers, there is a chain of reaction in the

business starting at the base foundation of the supply chain model. For instance, it is the

company’s sole responsibility to work with integrity; factories with child labor sweatshops are

WHAT KIND OF GREEN IS CHINA AFTER? 15

avoided whereas eco-friendly transportation and procurement processes are to be supported.

Companies utilize CSR techniques to serve its stakeholders, the society and communities, and

some MNCs even churn sustainability in forecasting their next business motives and direction.

They work alongside non-profit organizations that uphold sustainable practices and certification.

Before entering China’s market, foreign firms’ supply chain policies will be monitored to

ensure “EHS standards of commercial relations—a policy which is typically referred to

as ’greening the supply chain’”.29 Although the idea of “greening” supply chain models is to

lessen carbon footprint and environmental degradation, Chan explains green supply chain in

China as a “nice to have” model rather than a “must have” model. Currently, mainly the MNCs

have the “luxury” and manpower to instill this “chase for the green”. This environmental

movement is largely displayed in Wal-Mart’s business goals, as the company made its way into

the Chinese market fifteen years ago right after Deng Xiao Ping’s Open Door Policy was

initiated in 1986 to 1990.30 Having the necessary execution tools as a renowned Fortune 500

company in the United States, Wal-Mart began its leadership path as one of the world’s

“greenest” supply chain model.

Multinational Company Case Study: Wal-Mart

The “green” profits became a leading

persona, convincing MNCs on the benefits of

applying environmental values and aligning

them with business missions and goals.

Forecasting sustainable practices became a

viable business strategy. Companies started

seeing this as an opportunity to increases

control in risk management, cost reductions,

and revenue growth. Prior to the 1990s, Wal-

Mart attempted to create green-colored shelf tags, but these 300 green products backfired when

stakeholders discovered a green-labeled brand of paper towels had only a recycled tube…the

towels themselves were unrecycled paper treated with chlorine bleach”.31 It was not until

October of 2005 where the company’s Chief Executive Officer, H. Lee Scott Jr., resurrected the

Figure 21. Political Cartoon (Source: Danziger, Jan.

2010)