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Report: Scaling Circular Economy in China Could Save Businesses, Households ¥70T by 2040

Image credit: Ellen MacArthur Foundation

New research from the Ellen MacArthur Foundation (EMF) finds that a transition to a circular economy in China’s cities could make goods and services more affordable for citizens while reducing the impacts normally associated with middle-class lifestyles. The findings are being presented today at the World Economic Forum’s Annual Meeting of the New Champions in Tianjin, China.

The circular economy opportunity for urban and industrial innovation in China, which identifies opportunities across five focus areas — built environment, mobility, nutrition, textiles and electronics — was produced in partnership with Arup and McKinsey & Company, supported by UNCTAD and funded by the MAVA Foundation, with feedback from public institutions, academics and business circles in China.  

Similar to a 2016 EMF report that found that adopting circular economic principles would put India on a path to regenerative and value-creating development with annual benefits of US $624 billion (30 percent of India’s current GDP) by 2050 compared with current development, this new analysis shows that applying circular principles at scale could save businesses and households approximately ¥70 trillion by 2040 (16 percent of China’s projected GDP). This would enable more of China’s urban dwellers to enjoy a middle-class lifestyle, while seeing China’s cities reduce emissions of fine particulate matter by 50 percent, emissions of greenhouse gases by 23 percent, and traffic congestion by 47 percent by 2040.

“China has long been a pioneer of circular economy policies and practices, and China’s cities are hubs of circular economy innovation,” Dame Ellen MacArthur said back in July, when China and the European Union both signed a Memorandum of Understanding on Circular Economy at the 20th EU-China Summit in Beijing. “This new report shows that transition to a circular economy presents China’s cities with significant opportunities to create new value and economic growth, and further drive that innovation, while becoming more liveable for citizens.”  

China’s cities are well placed to adopt a circular economy. China has been a frontrunner on circular strategies for more than two decades, and the country’s continuing urbanization, rapid development of digital technologies, and boom in asset-sharing platforms present significant opportunities for further industrial innovation and circular urban development. Pioneering cities, entrepreneurs and businesses in China are already beginning to capture these opportunities, as demonstrated by multiple examples.

However, as many Western economies learned when China — once the linchpin of many of their recycling strategies — last year banned the import of 24 types of solid waste material,

 a systemic shift towards the adoption of a circular economy in some of the world’s largest cities is not without challenges. The report points out that realizing the benefits of a transition to a circular economy will require collaboration between decision makers, government institutions, along value chains, and between public and private sectors. Cities such as Edinburgh, Scotland and Auckland, New Zealand are busy putting these principles into action.


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