Shanghai can become circular economy pioneer

Efforts to push a circular economy will significantly increase in advanced economies in the near future. With China’s early-mover advantages in circularity, Shanghai could become an international CE trendsetter.

CE means more than the production and consumption of goods and services.

It includes a shift from fossil fuels to the use of renewable energy and a debate on the role of money and finance.

In the next three years, Shanghai plans to invest 100 billion yuan (US$16.3 billion) on 220 anti-pollution projects.

Among other things, the plan seeks to reduce hazardous PM2.5 particle concentrations drastically to 48 ug/m3, a level closer to international standards (25-35 ug/m3).

While the anti-pollution budget seeks to address some eight core areas, one involves the circular economy. The latter is a way to think about pollution and efforts to minimize it across the entire eco-system.

While the CE concept has been pioneered in advanced economies, China is seen as a leader in implementing the core ideas.

CE pioneer

According to a 2012 McKinsey report, a shift toward circularity could add US$1 trillion to the global economy by 2025 and create 100,000 new jobs within the next five years.

However, while advanced economies are struggling to establish appropriate CE legislation, China did so over a decade ago.

At first, Chinese efforts at CE emulated pioneer initiatives in Germany, Japan, the EU, and the US. As double-digit economic expansion began to raise Chinese living standards, both the high level of growth and pollution were unprecedented in world history.

When British industrial revolution escalated in 1800, England’s population was only 10 million; less than half of that in modern Shanghai and less than 1 percent of that in China.

But great threats come with great opportunities.

In China, authorities began to develop CE policy that would be broader and better integrated with national-level development planning and government agencies, which seek to link CE to the mainland’s low-carbon strategy.

As CE studies arrived in higher education institutions and activities took off in clean tech production and eco-industrial parks, the National Development Reform Commission envisioned circularity as central to an alternative development model.

With the establishment of the 2009 Chinese CE law, circularity began to support national plans for safe urban municipal solid waste treatment, energy saving, and emissions reduction.

Shanghai as a frontrunner

As circularity is now seen as a possible platform to create a more sustainable future, substantial investment has been geared to CE-oriented pilot projects, including those in municipal and regional eco-industrial development.

In the early 2010s, many cities — particularly Beijing — met or exceeded the targets set. Other cities such as Dalian, Shanghai, and Tianjin attained more modest improvements. And that’s why Shanghai’s plan for anti-pollution projects matters.

However, as efforts toward circularity are about to accelerate in Europe and other advanced economies, more is needed in Shanghai as well. The city’s budgeted anti-pollution plan is a great start. But it is not a systematic CE strategy.

If Shanghai is to become an international CE pioneer, it is time for the city to intensify thinking not just in terms of how to reduce the effects of pollution but how to drastically nullify the causes of pollution in the urban eco-system.

These lessons are vital for all metropolises in China and other emerging economies, as well as to cities in the advanced economies worldwide.

Such forward thinking would offer a handsome payoff to cutting-edge Shanghainese enterprises and extraordinary cost-efficiencies to the municipality itself. Most importantly, circularity would raise the quality of life in Shanghai with safer air, purer water, and fewer vehicular emissions.

Dan Steinbock is Research Director of International Business at India China and America Institute (USA) and Visiting Fellow at Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more, see

The original commentary was released by Shanghai Daily on June 4, 2015