Embracing Sustainability: How Businesses Can Contribute to the ‘Beautiful China’ Initiative

The “Beautiful China” initiative covers diverse business sectors, including green industries and urban planning, offering a wide array of investment opportunities within its framework.

“Beautiful China” is an initiative aimed at creating a sustainable and environmentally friendly nation, with specific goals for different sectors. It focuses on reducing pollutants, achieving carbon neutrality, promoting green development, and conserving the ecosystem. The initiative encourages domestic and foreign participation, urging businesses to adopt eco-friendly practices, invest in green projects, and align with environmental standards for a more beautiful and sustainable China.

What is the “Beautiful China” initiative?

In 2012, the Chinese government introduced the strategic concept of “Building a beautiful China,” emphasizing effective ecological protection, sustainable resource use, and harmonious coexistence with nature. In 2017, the government provided further clarification and overall requirements for this concept, aligning it with China’s sustainable development plan rooted in ecological civilization.

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During the July 19, 2023, National Conference on Ecological and Environmental Protection in Beijing, President Xi Jinping emphasized that the next five years were critical for building a “Beautiful China”. Xi stressed the importance of harmonious coexistence between humanity and nature, advocating for a holistic approach to ecological challenges. He committed to fighting pollution, advancing green development, and ensuring ecosystem diversity. Xi also called for nationwide planning to reaching peak carbon emissions and eventually carbon neutrality.

On January 11, 2024, the government issued guidelines to comprehensively promote the development of a “Beautiful China,” giving the concept a more prominent role in the construction of a strong country and the process of achieving national rejuvenation. More specifically, the guidelines list development goals as follows:

• By 2027, China is committed to achieving a continuous decrease in major pollutants, concurrently enhancing the quality of its ecological environment. Efforts will be directed toward maintaining the national ecological protection red line area (referring to the area with special important ecological functions, which must be mandatory and strictly protected) at above 3.15 million square kilometers, an initiative introduced in 2017 to safeguard ecological conservation.
• By 2030, the country aims to reach peak carbon emissions, laying the groundwork for achieving carbon neutrality by 2060. Additionally, specific targets include reaching a 45 percent proportion of new energy vehicles among all new automobiles and the elimination of old diesel locomotives, while ensuring the sustained growth of port container transport.
• Moving toward 2035, the focus shifts to the development of green production methods and lifestyles, marked by peak and declining carbon emissions. The goal is to achieve a fundamental improvement in the national ecological environment. Key targets include railway freight turnover reaching about 25 percent, attaining global advanced efficiency in energy and water resource utilization, achieving full coverage of zero-waste city construction, increasing national forest coverage to 26 percent, and elevating the soil and water conservation rate to 75 percent to foster a virtuous cycle in ecosystems.
• Looking ahead to 2050, China envisions a comprehensive upgrade in its ecological civilization. The nation aims to fully realize green development and lifestyles, accomplish deep decarbonization in key areas, and establish a healthy and aesthetically pleasing ecological environment, culminating in the creation of a “Beautiful China” in all aspects of its ecological landscape.

Throughout its development, the concept has evolved from an aspirational goal to a solid framework that involves specific agendas across multiple fields and sectors. The guidelines list some main topics:

• Accelerating the Transition to a Model of Green Development:
  • Optimizing the allocation of land for development and protection
  • Promoting peak carbon emissions and carbon neutrality
  • Coordinating and promoting green and low-carbon development in key areas
  • Promoting economical and intensive utilization of resources

• Continuously promoting pollution prevention and control:
  • Furthering the efforts to keep the skies blue, waters clear, and lands clean
  • Strengthening management of solid waste and new pollutants

• Enhancing the stability and sustainability of ecosystem diversity:
  • Building a solid natural ecological barrier
  • Implementing integrated protection and systematic management of ecosystems
  • Strengthening biodiversity protection, establishing national botanical gardens, and protecting wildlife

• Safeguarding the bottom line for ecological safety:
  • Improving the national ecological security system
  • Ensuring safety from use of nuclear resources and radiation
  • Strengthening biosafety management
  • Effectively responding to the adverse impacts and risks of climate change
  • Preventing and controlling environmental risks

• Building a model for the construction of a “Beautiful China”:
  • Constructing an advanced pilot zone for “Beautiful China”
  • Building beautiful cities
  • Building beautiful villages
  • Carrying out innovative demonstrations

• Actions to build a “Beautiful China” for all:
  • Cultivating and promoting ecological culture
  • Practicing green and low-carbon lifestyles
  • Establishing a multi-participation action system

How will the “Beautiful China” initiative affect businesses?

“Beautiful China” can significantly impact businesses and the private sector by promoting sustainable practices and environmental responsibility. The initiative encourages businesses to adopt eco-friendly strategies, invest in green technologies, and align their operations with environmental standards.

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The quantitative targets specified in the Guidelines, as well as the enforcement measures demonstrate the government’s determination to achieve green and low carbon development. Stricter enforcement of environment protection regulations should be expected in 2024 and beyond.

Meanwhile, this initiative can create new opportunities for companies involved in renewable energy, conservation, and sustainable development. Businesses that actively contribute to the goals of “Beautiful China” may receive support, recognition, and preferential treatment, enhancing their reputation and market position. Additionally, the initiative may lead to the development of eco-friendly products and services as a response to the growing demand for sustainable solutions in the Chinese market.

In recent years, China has made significant progress in efforts that are in line with the requirements of the initiative.

Green economy

China is firmly committed to achieving net zero emissions and views clean energy as its future. It is strongly committed to achieving net-zero emissions and prioritizes clean energy for its future. The country has successfully reduced carbon dioxide emissions per unit of GDP by 34.4 percent, established the world’s largest carbon market, and leads in various renewable energy sectors. In 2023, China witnessed significant growth in solar and wind energy capacities, with renewables and nuclear power surpassing fossil fuel-based capacity for the first time. Solar installations reached a record 34 gigawatts (GW) in the first three months of the year, nearly tripling the previous high. Wind power installations also set a record with 10.4GW added in the same period, a 32 percent increase over 2022.

Further, the nation’s focus on green industries, including electric vehicles (EVs), batteries, and renewable energy, is attracting substantial investments, positioning Chinese companies as global leaders in these emerging sectors. Chinese companies, such as automotive giant BYD, battery maker CATL, and solar manufacturer Longi Green Energy Technology, are already among the world’s most prominent players in their respective markets. This strategy aligns with China’s broader economic goals and emphasizes sustainable and innovative industry development.

ESG

China is making significant strides in ESG reporting and disclosure. In 2022, the country introduced its inaugural ESG reporting framework, the “Guidance for Enterprise ESG Disclosure“, providing a localized, scientific, and measurable data-based evaluation system. Chinese companies are actively developing ESG strategies, with 53 percent publicly announcing them. State-owned-enterprises (SOEs) play a crucial role, with 70.4 percent issuing detailed ESG reports. Motivations include building customer relationships (47 percent), meeting investor expectations (44 percent), and improving government relations (37 percent). Stakeholder consultations (66 percent) and hiring ESG professionals (56 percent) showcase companies’ commitment.

Sustainable urban development

China’s sustainable urban development is also evident from recent efforts and milestones. China aimed to implement garbage sorting in over 90 percent of residential communities in cities at or above the prefecture level by the end of 2023, reaching 100 percent coverage by 2025. Efforts to achieve this include enhancing related laws, utilizing information technologies for waste management platforms, and boosting waste incineration capacity. Currently, garbage sorting is underway in 297 Chinese cities, covering 82.5 percent of residential communities, with a daily waste disposal capacity of 530,000 tons, predominantly through incineration.

Biodiversity protection

China’s Ministry of Ecology and Environment introduced the China National Biodiversity Conservation Strategy and Action Plan (2023-30) in January 2024, aligning with the Kunming-Montreal Global Biodiversity Framework. The action plan sets ambitious goals, including establishing various biodiversity-related policies and monitoring systems by 2030, restoring 30 percent of degraded ecosystems, and defining ecological protection red lines for land and marine areas, in line with efforts to build a “Beautiful China.”

While climate action has gained corporate attention, understanding of and involvement in biodiversity conservation is still low among Chinese companies transitioning from corporate social responsibility (CSR) to ESG. Yet despite a later start, Chinese businesses have the potential to lead in biodiversity conservation, aligning with the UN’s 2030 Agenda for Sustainable Development. Empowering every employee is crucial for integrating biodiversity conservation into all aspects of the company.

What are the challenges?

Despite strong policy support, China encounters formidable hurdles in pursuing the “Beautiful China” initiative. Official data reveals that the economy grew 5.2 percent in 2023, slightly surpassing the government’s target but falling short of the rapid rates witnessed in the pre-pandemic years. China’s slower economic growth poses potential challenges for its green development initiatives, impacting funding and resources for sustainability projects. Local governments could be faced with a dilemma to either balance economic growth pressure or meet sustainability requirements.

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Further, despite rapid growth in renewable technology investment and production in China, recent research from CREA in August 2023 indicates a surge in coal power activities. In the first half of 2023, China initiated the construction of 37GW of new coal power capacity and experienced a 10 percent year-on-year increase in CO₂ emissions in Q2 2023.

In addition, the competitive landscape with the U.S. and potential trade barriers may compound the challenges faced by China in achieving a sustainable and robust economy.

Despite substantial investments in high-tech manufacturing, especially in EVs, batteries, and renewables, the emphasis on manufacturing as a growth catalyst is a response to the economic downturn. This strategy risks provoking trade tensions amid global efforts to bolster vital industries.

How can foreign businesses get involved?

The “Beautiful China” initiative is an umbrella framework that contains different business sectors with a broad range of opportunities. Immediate ways for foreign companies to participate in this initiative include adhering to environmental regulations, implementing sustainable business operations, and transferring eco-friendly technologies. Adoption of green standards and certifications, along with active stakeholder engagement, may further contribute to the initiative’s success.

Meanwhile, investing in green projects, engaging in CSR, collaborating with local entities, promoting education and awareness, and innovating on sustainable products and services are key avenues for involvement that can benefit both China’s sustainable development and the company’s long-term business prospects in the country.

By aligning business practices with the principles of ecological conservation and leveraging opportunities for growth in green industries, foreign companies can play a significant role in creating a more sustainable and beautiful environment in China.

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