China as a Green Lab

China’s energetic transformation into a largely urban, market economy may produce more than an economic powerhouse and billions of affluent consumers. It could also give China an advantage in an unlikely arena: the development of strategies for sustainable economic growth.

Consider Chinese president Hu Jintao’s recent invitation to Asian-Pacific business leaders to join China in developing a clean, resource-conserving “circular economy,” which he said would yield both steady growth and ecological vitality throughout the Pacific Rim. Given China’s well-documented environmental problems, it would be easy to dismiss this call to action as political rhetoric. But President Hu’s declaration was an explicit acknowledgment that the country, with challenges ranging from water shortages in many of its cities to the voracious appetites of its fossil-fuel-burning industries, must find ways to decouple economic growth from ecological destruction.

Indeed, the very urgency of China’s environmental problems is forcing a flowering of innovation. And its search for solutions will have global impact, opening up vast markets for forward-looking energy and technology companies while simultaneously creating a rich seedbed for new types of ecologically intelligent products, services, and technologies.

The very urgency of China’s environmental problems is forcing a flowering of innovation.

So what is the circular economy to which President Hu refers? Broadly defined, it is one based on nature’s regenerative cycles. Thus, it is powered by clean and renewable energy; uses material inputs that have positive or benign effects on people and the environment; and employs manufacturing, distribution, and recovery systems that allow those material inputs to be returned to fully productive use (not merely turned into products of lesser value, as in conventional recycling).

One way in which China is working toward a circular economy is through its involvement with the China-U.S. Center for Sustainable Development. Founded in 1999, the center brings together a variety of organizations (business, governmental, nongovernmental, scientific) to develop commercially, socially, and environmentally advantageous enterprises. Among the participants in the center’s projects are China’s ministries of Science and Technology; Land and Resources; and Construction; private groups such as the China Real Estate Chamber of Commerce; and multinational corporations such as BP, Intel, Ford, and BASF.

In one project in Huangbaiyu, Liaoning Province, a China-U.S. Center team is advising local developers on the planning and construction of a sustainable rural village that the government hopes will serve as a prototype for improving the lives of 800 million rural Chinese. But Huangbaiyu village also highlights the business opportunities that a Chinese circular economy would offer Western companies.

Model homes, which are being used to test environmentally friendly materials and technologies, feature recyclable polystyrene roof panels and insulation produced by BASF; compressed earth-and-straw-bale block walls created with machines made by Vermeer, a U.S. industrial-equipment company; and a 1,000-watt solar panel made by energy giant BP. BASF sees a huge market in China for superinsulating polystyrene as a possible alternative to resource-intensive building materials like coal-fired brick, which was recently banned in many cities under new Chinese environmental regulations. And if BP can accelerate China’s move into the mass production of solar collectors, we will see a rapid, cost-efficient expansion of the global solar marketplace.

In another project, my architecture firm, under the guidance of the China Housing Industry Association and the China-U.S. Center, is creating plans for a variety of “new towns” that we hope will offer a model for healthy, vibrant twenty-first-century cities. The plan for one of the sites, in the city of Miyun, near Beijing, includes eco-industrial sites in which the outputs of one enterprise can be linked with the inputs of another. For example, wasted heat from a green textile factory could be used to dry grain in a nearby brewery; the spent grains from the brewery could be used as bedding for neighboring mushroom growers. These kinds of experiments not only present commercial opportunities for Western firms but also may yield valuable economic lessons for the entire world.

Many of China’s sustainable development projects are still in their early stages. But there is another reason, besides economic necessity, for being optimistic about such initiatives: China’s 4,000-year-old tradition of resource conservation and regeneration. Though the advent of industrialization may have created a kind of cultural amnesia in China, circular economics is built in part on a simple principle, waste ultimately equals food, that enabled the Chinese to farm the same fields for 40 centuries without destroying the land’s fertility. In fact, what represents circular economics more vividly than the traditional admonishment of a rural Chinese host to his guests that, before returning home after a good meal, they replenish his bucket of “night soil”? As a symbol for sustainability, that’s no laughing matter.