“Environmental Policies on China’s Investment Overseas”

Environmental-protection policies in Chinese foreign investment and aid are sorely lacking, according to the authors of Environmental Policies on China’s Investment Overseas, and a small number of existing Ministry of Commerce policies – mainly requiring investors to obey international protocol and domestic environmental law -- have not been implemented. This book – the first to examine this subject -- calls for China to urgently issue guidelines regarding investment, aid and lending, and puts forward two proposed drafts.

The book grew out of research on the
environmental behaviour of Chinese companies overseas and on banks’ environmental policies in overseas lending. The Global Environmental Institute, a Chinese NGO, has been working on the subject since 2007 with the Ministry of Environmental Protection’s Chinese Academy for Environmental Planning and the University of International Business and Economics. There are eight authors, among them academics, planners and economists.

While suggesting that the government facilitate Chinese NGO participation in discussions of environmental issues in overseas aid, the book gives no details and focuses more on government management of the issue. It suggests that government set regulations on environmental protection for investors overseas, and
the two proposed drafts are guidelines on investment, aid and lending.

Pan Yue, vice-minister at the environmental protection ministry, notes in his foreword to the book that the government started promoting overseas investment and partnerships in the 1990s. Since then, Chinese companies have become active players internationally – but environmental impact has been a constant source of controversy. According to Pan:
"With increasing concern about environmental protection and the rational use of natural resources by governments, as well as growing public awareness of environmental participation, companies will face greater environmental pressures."

Proposals designed to improve policy implementation include boosting environmental awareness and management capability within companies, paying more attention to environmental behaviour, and establishing demonstration projects and trade and cooperation zones. But improvements arising from advances within companies and providing examples will be limited. While guidelines can apply on a large scale, stricter regulations would need to be universal.

So far, there has been no official response to the book’s two draft proposals. As the drafts involve coordination between the environmental protection and commerce ministries and the Chinese Banking Regulatory Commission, the process will be complex. As one of the writers, Ge Chazhong of the Chinese Academy for Environmental Planning, said at the book’s release, that coordination process is itself more problematic than drafting an actual guidelines document.

Environmental Policies on China’s Investment Overseas
Ge Chazhong, Xia Youfu, Zhi Yingbiao, Long Feng, et al
China Environmental Sciences Press, 2010

— By Meng Si

Meng Si is managing editor in chinadialogue’s Beijing office.