Xiaojun Wang

Eye On Asia | Will China’s green guide burnish the belt and road’s environmental credentials?

Beijing wants state-owned enterprises to meet global green standards, not lax local laws, when operating overseas and improve communication to better address local environmental concerns. Are they ready?

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A ground-breaking ceremony for the Phnom Penh-Sihanoukville Expressway in Cambodia on March 22, 2019, a belt and road project by state-owned China Road and Bridge Corporation. Photo: Xinhua

Xiaojun Wang

Published: 2:30pm, 1 Aug 2021

Last month, China published a “Green Development Work Guide for Overseas Investment and Cooperation”, mainly targeting state-owned enterprises (SOEs), but also copied to key players in its Belt and Road Initiative, such as the China Development Bank, the Export-Import Bank of China and the China Export & Credit Insurance Corporation.

Jointly put out by the Ministry of Commerce and Ministry of Ecology and Environment, this green guide aims for Chinese SOEs “to gain a proactive stance in global cooperation and competition”, in light of the trend where “green is the direction for scientific and industrial revolutions, carbon neutrality is a global concern, and global trade is rapidly adopting green rules”.

In other words, Beijing is telling its SOEs to focus on low-carbon initiatives and be more competitive in the global market.

The guide lists 10 points that SOEs are encouraged to follow in their overseas operations, ranging from more investment in renewable energy, and the establishment of green supply chains, to the construction of green infrastructure, and industrial and trade zones.

Two other points stand out for environmental groups in belt and road partner countries. One expects Chinese companies to follow higher international standards, instead of weak local ones, and the other encourages better communication with local communities and environmental groups.

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To identify potential environmental risks, Chinese enterprises “are encouraged to follow internationally accepted practices to conduct environmental impact assessments and due diligence”. To prevent environmental risks, they should “follow internationally accepted standards or Chinese standards, in case of no regulation or low standards in host countries”.