20120828-kansenrapport-top-sector-energy---sustainable-building

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OppOrtunities fOr Dutch cOmpaniestOp sectOr enerGY: sustainaBLe BuiLDinG

chinaTop SecTor eNerGY: SUSTAINABLe BUILDING OppOrtunities fOr Dutch cOmpanies

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chinaTop SecTor eNerGY: SUSTAINABLe BUILDING OppOrtunities fOr Dutch cOmpanies

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2012

Focal pointConsulate-General [email protected]

Other participating offices:Embassy of the Kingdom of the Netherlands in BeijingTWA at Consulate-General GuangzhouNetherlands Business Support Office Wuhan

www.zakendoeninchina.org

The business opportunity reports are a joined production of the Netherlands eco-nomic government network in China consisting of the Embassy of the Kingdom of the Netherlands in Beijing, the Consulates-General in Shanghai, Guangzhou and Hong Kong, and the Netherlands Business Support Offices (NBSO’s) in Chengdu, Dalian, Jinan, Nanjing, Qingdao and Wuhan.

Unauthorized use, disclosure or copying without permission of the publisher is strictly prohibited. The information contained herein, including any expression of opinion, analysis, charting or tables, and statistics has been obtained from or is based upon sources believed to be reliable but is not guaranteed as to accuracy or completeness.

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1. Summary of general developments and opportunities 5

2. Chinese government: investment and development plans 7

3. Chinese companies: investment and development plans 13

4. Foreign companies: investment and development plans 15

5. Chinese government: incentives and other measures 16

6. Image of the Netherlands 18

7. Information about legislation 19

8. Market trends and developments 20

9. Projects & tenders 21

10 . DESTEP factors 22

cOntents

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summarY Of GeneraL DeVeLOpments anD OppOrtunities fOr the Dutch sustainaBLe BuiLDinG sectOr

Unlike many other aspects of the environmental movement, sustainable design is a real, practical and long-term practice that could make a huge contribution to energy savings and environmental health around the world – if only architects and building owners would fully embrace its principles. For China, sustainable design isn’t merely an interesting idea. It’s necessary for controlling energy usage in crowded and constantly expanding urban areas.

It is well known that China is the world’s biggest construction market. Nearly half of the new buildings annually constructed worldwide are lo-cated in China by 2015. However, only about 4% of these are built according to energy efficiency standards. China’s construction market will by 2020 account for 40% of the country’s total energy consumption. While it con-tributes 15% of the world’s GDP, China consumes 30% of the earth’s steel and half its concrete. On top of which, buildings in China consume a third of the country’s increasingly endangered water supplies. Recent research showed that almost half of the national energy consumption has been used for con-struction related purposes. Of existing buildings, a huge amount needs sus-tainable redesign and retrofitting technologies.

Chinese government has recognized the urgency of widely implementing sustainable buildings. As a result, a national 3-star China National Green Building rating system has been launched in 2006. Yet the Chinese green building revolution is still in its infancy. Main problems are, amongst oth-ers, low level of regulations and standards, problematic implementations at local level, lack of awareness and transparency in related public and private sector, lack of expertise of integrated sustainable building design and con-struction among engineers, designers and constructors.

It is also to be expected that more aggressive energy saving and environ-mental protection targets will be set by the 12th Five Year Plan. Promote green buildings will be one of the top priorities in China’s swift urbaniza-tion process with focus on saving land, energy, water and materials.

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Chinese government has recognized the urgency of widely implementing sustainable buildings

Yet the Chinese green building revolution is still in its infancy

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Under this framework, the following areas will offer business opportunities in the coming years:

application of new energies and energy conservation solutions in archi-• tectural designeco-friendly and energy efficient urban planning designs• high quality and high technology green building materials• environmental protection technologies and products• engineering consultancy providing total energy conservation solutions •

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chinese GOVernment: inVestment anD DeVeLOpment pLans

Although the economic recession in 2008 appears to have hit the West hard-er than Asia, is China also undergoing the consequences of the economic recession? After the economic recession year, the government supported rejuvenating the construction sector in 2009: a long-term development scheme – provide housing at affordable prices, issuing of loans for real-es-tate businesses and other financial products for property developers have been proposed by the Ministry of Housing and Urban-Rural Development (MOHURD). Also stimulus plans – the development of 5.2 million low-rent properties from 2009 to 2012 and housing at subsidized rates for 7.5 million poor families from 2009 to 2011. One of the conditions is the national en-ergy strategy for buildings; targets to reduce energy consumption by build-ings by 50% by 2010 en by 65% by 2020 as compared to 1980 levels of energy consumption has been set.

After the 2009 Copenhagen climate conference, promoting sustainable building and eco-city became even hotter in China. Almost every city would like to move forward with low-carbon economy at local level. Therefore, there is huge potential in the fields of sustainable building and eco-cities, which includes high quality and efficiency in all aspects of landscaping, ur-ban planning and architecture.

At national level, in August 2010, the National Development and Reform Commission (NDRC) has announced five provinces and eight cities to pilot the low carbon development in China. The five provinces are Guangdong, Liaoning, Hubei, Shanxi, and Yunnan. Eight cities are Tianjin, Chongqing, Shenzhen, Xiamen, Hangzhou, Nanchang, Guiyang, and Baoding. In Feb-ruary 2011, the NDRC has required the five provinces and eight cities to include low-carbon development models in their regional 12th Five Year Plans. NDRC will approve the proposal of each province and city.

At local level, the real booming in the coming years is expected in the 2nd tier cities in China. Cities started their economic reforms in different stages. This became known as the Chinese tiered city system, which is character-ized by the economy scale and population size of a city. Shanghai, Beijing and Guangzhou are regarded as 1st tier cities. These cities have their own

The National Development and Reform Commission (NDRC) has announced five provinces and eight cities to pilot low carbon development in China

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Shanghai

Hong Kong

BEIJING

SICHUAN

GUANGDONG

SHANDONG

LIAONING

JIANGSU

ZHEJIANG

domestic demand and consumption. They improved the living standards and created better business and job opportunities and are an international showcase to the rest of the world. Many cities are having their own plans of sustainable development to construct green buildings, eco-cities and low-carbon communities. The Chief Executive China magazine has published a ranking list of the most potential future 2nd tier cities, the top 10 cities are ranked as follows: Suzhou, Chongqing, Hangzhou, Chengdu, Qingdao, Ningbo, Xiamen, Da-lian, Tianjin and Wuhan.

It is not possible to name all the development plans at local level through-out China, but some examples can be given:

nOrthern china

TianjinSino-Singapore Eco-city is the first eco-city cooperation on a government-to-government level in the world. All buildings will conform to stringent energy efficiency standards. The district has planned to allow for up to 90% public transport, cycling and walking. Advanced water saving and waste management systems will be implemented. The existing wetlands around

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the city will be protected to enhance biodiversity. Work began in 2008 and is scheduled to take between ten and fifteen years to completion. This year this project is heading to the 2nd phase.

Furthermore, in the coming 5 years, the city of Tianjin is planning to build 120 million m2 energy saving buildings, among them 30% will reach green building standard. Meanwhile the city will also carry out an energy saving re-design and retrofit project for 15 million m2 of existing buildings.

China’s push for green buildings and the development of eco-cities is really taking shape. March 2011, New York architect Kevin Kennon has announced the final plans for an eco-friendly office tower, called Tian Fang, in Tianjin. Tian Fang generates an estimated 20% of its clean energy on site – through a combination of hydrogen fuel cells, solar panels and wind turbines while simultaneously conserving nearly 20% of the energy used. Another 20% of the tower’s energy use will be saved using conservation efforts. The build-ing’s completion is scheduled in early 2013. When it is finished, it should draw 40% less energy from the city’s grid than similar buildings in the area. Tian Fang will be one of the most advanced sustainable commercial build-ings in China.

Tangshan/ caofeidianAfter an earthquake in 1976 Tangshan city was rebuilt according to higher sustainable standards. In 2006, the initiative to consolidate the city as a pio-neer for sustainable urban development was launched. Industries have been relocated. At the same time, strict water and waste recycling requirements have been imposed. A new district, Caofeidian, is being built to meet the demand for additional housing. It will feature renewable energy and energy conservation technologies. Migrant workers are provided with health care and educational support. Agricultural production in the city’s hinterland has been encouraged to switch to non-pesticide methods.

rizhaoRizhao has a reputation of environmental sustainability due to its status of a coastal resort with little heavy industry. In 2001, the city switched to solar power technology. A majority of houses has been equipped with photovol-taic cells, while almost all households have solar water heating systems. All street and public lighting is solar powered. In addition to this retrofitting, the city has begun work on new neighbourhood developments using strict environmental standards.

Sino-Singapore Eco-city is the first eco-city cooperation on a government-to-government level in the world

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Beijing / MenTouGouThis district in West Beijing was selected by the Chinese authorities as a major growth area. Through collaboration with VTT, a Finnish technical re-search organization, work was begun in 2007 to retrofit the existing neigh-bourhood and to build new housing and office space.

centraL / eastern china

ShanghaiDongtan project was launched in 2005 as a flagship project of the Chinese government. Located outside Shanghai at the mouth of the Yangtze River, the city is designed to consist of zero-energy buildings (ZEBs); a green-house gas neutral transport system; a self-sufficient water system; and a fully re-newable energy system. The project is developed by the Shanghai Indus-trial Investment Corporation (SIIC) and British engineering firm Arup. The first part was supposed to be finished in 2010, but has been delayed.

Hongqiao Development Zone is a new pattern of commercial areas cen-tred by foreign trade authorities, foreign trade promotion centres, foreign trade companies and exhibition venues and high-rise office buildings. The Hongqiao Economic & Technological Development Zone covers an area of 65.2 hectares, with a construction area of 31.09 hectares, a greenery area of 19.54 hectares and a road area of 14.39 hectares. It plans to construct 300,000 m2 exhibition and displaying place, office building, hotel and res-taurant, commercial and building, complementary facilities. A foreign con-sular area has been established in the Development Zone.

Quite soon after China’s tallest building, the Shanghai World Financial Cen-tre, opened in 2008, ground was being broken just next-door for an even taller building. The new skyscraper is designed to curl heavenward; incor-porating “green” elements such as rainwater capture and wind redirecting technology. The building’s spiralling parapet collects rainwater, which is used for heating and air conditioning. Wind turbines located directly be-neath the parapet generate on-site power. Gardens will grow in between and around what are essentially nine cylindrical buildings stacked atop one another, all of it visible through a transparent facade. The facade’s taper, texture and asymmetry will work in partnership to reduce wind loads on the building by 24%, saving on both building materials and construction costs. Estimated completion of this skyscraper is in 2014.

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HangzhouHangzhou is one of the Chinese cities selected to spearhead the transition to a low-carbon economy. The International Finance Corporation (IFC), a member of the World Bank Group, is going to finance energy-saving, low-carbon projects in the city. According to the memorandum, the city gov-ernment and IFC, will jointly invest in low-carbon, sustainable projects and create a platform for carbon emissions trading.

Hangzhou has published the city’s land-use plan for the 2006-2020 period, indicating that Hangzhou has entered a new stage of urban development. The plan puts an emphasis on improved land management and sustainable development. Furthermore, Hangzhou has attached great importance to in-vestment attraction. Foreign investment is conducive to economic restruc-turing and it helps create new jobs and financial recourses, promoting sus-tainable economic development. SuzhouIn the 21st century, Suzhou has been one big construction zone. Govern-ment officials are investing billions of dollars in big public works projects: building ring highways, widening roads and alleyways, building light rail and subway lines, laying more than 50 miles of sewage and rainwater pipes and renovating and building housing complexes. Government officials say Suzhou’s top priorities are to develop a public transportation and alterna-tive energy infrastructure and to continue ongoing clean up of the city’s polluted air and waterways.

WuhanIn 1997, Wuhan was recommended by the National Environmental Protec-tion Bureau (EPB) to joining the global Sustainable Cities Program. The Sus-tainable Wuhan Project (SWP) aims to promote environmentally sustainable development in de Municipality of Wuhan, by enhancing the efficiency of use and re-use of environmental resources and by reducing environmental degradation through strategic planning and environmental management. In 2009, a general plan has been worked out for the ecological construction and environmental protection of an eco-city cluster, which is to be centered in Wuhan. The construction of the city cluster, involving 459 environment programs and a total investment of RMB 512.8 billion, will be completed in 2020. Wuhan is now a model city for sustainable development in China.

Hangzhou is one of the Chinese cities selected to spearhead the transition to a low-carbon economy

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The world’s most sustainable building will be placed in Wuhan and the con-struction has started in November 2010. The Wuhan Energy Flower is after accomplishment assured of the highest award of 3-star in the China National Green Building rating system. It is also the first office building in the world that meets the standards for the highest sustainability class “Outstanding” in the international classification system BRE Environmental Assessment Method (BREEAM). The building is designed by Dutch companies; it will become a major R&D center for new energy technologies. It combines the outstanding concept of new energy application, advanced technology, with energy-saving, low-carbon, comfortable, intelligent, efficient and unique ar-tistic design. In the coming years, the city of Wuhan, with over nine million inhabitants, will become the most sustainable city development in China.

sOuthern china

ShenzhenBefore the Special Economic Zone was implemented, the area of Shenzhen was composed of several farming and fishing villages. After the economic opening of 1978, Shenzhen’s cheap land and its proximity to Hong Kong at-tracted foreign investors and land speculators.

Shenzhen aims on specific measures and goals: building Shenzhen into a recycling society, with technological innovation plans, public transporta-tion projects and green projects; such as rebuilding or enlarging the scale of sewage factories, cleaning the city’s main rivers, (re-)building garbage transfer stations and building green boulevards and parks.

Western china

chengduChengdu is a national forest city. At present, Chengdu has 24 forest parks of national level, provincial level and municipal level. Through projects such as post-disaster revegetation and vegetation restoration, Chengdu is striv-ing to achieve 28% of the forest cover rate in 2015.

The ecological protection and urban greening project of Qingbaijiang Dis-trict of Chengdu is Sichuan’s unique project from around the country. Fur-thermore, in April 2010, China’s first high-speed maglev naturalized proto-type was delivered in Chengdu.

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chinese cOmpanies: inVestment anD DeVeLOpment pLans

Real estate in the People’s Republic of China is developed and managed by public, private and state-owned red chip enterprises. Leading Chinese companies have already realized that China’s sustainable development will bring enormous business opportunities along. For example, Vanke, prob-ably the biggest real estate developer in China, has started their R&D center with focus on low emission technologies for residential buildings. Till now, they have invested over RMB 1,000 billion. The CEO of Vanke believes that innovative green technology will be the future core competitiveness in the real estate Industry. Vanke plans to develop green buildings with applica-tion of different types of new energies, such as solar energy, wind energy, tidal energy, etc.

The case of Vanke is only one example. There are already many large-scale enterprises engaged deeply in green businesses. With more promotion of green economy by the government driven by enforcement of related laws and regulations, we will see more and more Chinese companies, including SME’s, gradually responding to the climate change and sustainability in their business activities. Companies will also (be forced to) put attentions on sustainability / CSR reporting.

Another example is Greentown China, by Greentown China Holdings Ltd., headquartered in Hangzhou, one of the leading residential property devel-opers in China. Greentown not only builds green and sustainable building, it also changed its business strategy. At 31 December 2010, the Greentown Group’s premier land bank comprised over 37 million m2 of total GFA, which ensures the Group’s sustainable and steady development in the next three to five years.

Besides Vanke and Greentown China, there are several large real estate de-velopers in China which are also active in the green building sector, such as: Agile Property, Aoyuan Group, Capitaland, China Merchants Property, China SCE Property, Coastal Greenland, Country Garden, Evergrande Real Estate Group (Hengda Real Estate Group), Glorious Property Holdings, Hop-son Development, KWG Property, Poly Real Estate, R&F Properties, SOHO China, Shanghai Forte Land, Shimao Property, Shui On Land, Sino-Ocean

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There are already many large-scale enterprises engaged deeply in green businesses

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Land and Xinyuan Real Estate. They invested or are still investing in sus-tainable projects.For meeting both export and local demands, Chinese companies will focus on investment and development of new energies technologies, high-tech green products, Clean Development Mechanism (CDM) projects, etc.

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fOreiGn cOmpanies: inVestment anD DeVeLOpment pLans

A long-term cooperation between China en the Netherlands has resulted in a Memorandum of Understanding (MoU) between the Chinese Ministry of Housing Urban and Regional Development (MOHURD) and the Nether-lands’ Ministry of Housing, Spatial Planning and Environment (VROM).

Since 2009 a business platform called Dutch Sustainable Building Platform (DSBP) is organized by the Consulate-General of the Kingdom of the Neth-erlands in Shanghai, currently about 20 Dutch companies are participating in the platform. The companies that form the DSBP have extensive experi-ence in designing and realizing cost-effective sustainable building and ur-ban planning projects in China. The members are active in different fields, such as green building design and retrofitting, sustainable urban planning, landscaping & water management, energy efficient solutions for buildings and communities, providing green building products, etc.

Companies in the platform are divided in three categories:

Architects and urban planners: KCAP, KuiperCompagnons, BEAR-iD, 1. MVRDV, UNStudio, Soeters Van Eldonk, ARX Architects, NITA Group Engineering consultants: Grontmij, Tebodin, DHV, Deerns, Arcadis/2. RTKL, Ecofys, KEMAMaterial suppliers: Philips, Hunter Douglas, DESSO, Parthos, Semper-3. green

Contact information of the above mentioned companies could be obtained via the Economic Department of the Consulate-General of the Netherlands in Shanghai.

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chinese GOVernment: incentiVes anD Other measures

China will restructure its economy, changing the image of “world’s factory”. Expected from the 12th Five Year Plan, new energy, energy conservation, environmental protection and new materials are among the 7 defined Stra-tegic Emerging Industries (SEIs), which will receive major boost. The 12th FYP plans to strengthen fiscal and financial policies that support high-tech industry, including updating research funding management and venture capital investment systems. However the precise policies, regulations and rules of implementations are still to come after the 12th FYP being officially publish.

Recently, the National Development and Reform Commission and the Min-istry of Finance jointly issued a financial incentive to fund energy manage-ment contract Interim Measures - “Energy Management Contract (EMC)” Policy. In 2010, the central government funds have been arranged, RMB 2 billion to support the EMC. Prior to this, the State Development and Reform Commission, Ministry of Finance, the People’s Bank and the State Admin-istration of Taxation have jointly issued “on accelerating the implementa-tion of energy management contract to promote energy efficiency services industry view”. EMC is a new market oriented energy saving mechanism. It is not about selling a product or technology, but to promote a reduction of energy costs by financial management.

At local level, some cities have also supported their own green building regulations with incentives. In case of the city of Wuhan, a Green Build-ing Administrative Regulation has been issued in 2009. In this regulation, it is mentioned that for local companies who produce or utilize new green building materials, technologies, facilities in the promoted categories de-fined by the government, can enjoy tax benefits.

The initial establishment of regulations and standards, like “Energy Con-servation Law”, “Building Energy Conservation Regulations”, “energy-sav-ing regulations in public institutions” and other laws and regulations, have been promulgated and implemented for green building developments and provide a legal guarantee.

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Meanwhile, the initial establishment of green building standards (translat-ed from Chinese):

Green Building Technical Guidelines• Quality of building energy-saving construction standards and accep-• tanceGreen building rating standards• Green building assessment identified management practices”• Green building evaluation technical details• Green building rating supplement technical details (planning and de-• sign section)Green building rating supplement technical details (use part of the • run)

The government officially launched the green building evaluation; also a green building rating system of identification has been established.

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imaGe Of the netherLanDs

Most of the high-end architecture design in China has been controlled by foreign architects, which can account for about 30% of the total market share in China. Among the global top 200 architecture firms, more than 140 have already entered the Chinese market. Take the 2008 Olympic Games as an example, there were about 121 architecture firms involved in designing all the sports stadiums, among which 74 were either foreign-owned or from overseas. Also major international engineering consultancies are operating in China, involved in many large-scaled projects nationwide. Except foreign companies in this field, Chinese companies, especially the ones with gov-ernmental background (formally SOE) are also strong players in the market in achieving large-scale governmental projects. Regarding building materi-als, they will also face competition with foreign companies. However, there are more Chinese local producers taking price advantages in the market, although the quality is lower.

Dutch companies should be prepared for a fierce competition in the Chinese market. However, the market is big enough to still get a piece of the pie. So far, we have seen Dutch companies doing reputable projects in China, such as Hunter Douglas has furnished the red skin for the Chinese pavil-ion at the Shanghai 2010 World Expo; Philips’s lighting design and supply for the Guangzhou TV Tower; OMA designed the CCTV building in Beijing; and Grontmij and Soeters Van Eldonk have won the competition of Wuhan New Energy Centre, which will be the most energy efficient building in the world.

Most of the high-end architecture design in China has been controlled by foreign architects, which accounts for about 30% of the total market share

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infOrmatiOn aBOut LeGisLatiOn

Experience shows that there are definitely enough possibilities for foreign companies to participate in tender procedures in China. However, in certain cases chances are limited; for example, permissions from local authorities or certifications are required.

The regulations make strict stipulations about foreign investors in real estate industry with respect to investment capitals, qualifications, invest-ment forms etc. Meanwhile, since the end of 2007, foreign investors are restricted to investing in real estate agencies and prohibited in investing in construction of golf courses.

According to the Circular of the Ministry of Construction on foreign invest-ment in the construction industry (2002), a wholly foreign-owned construc-tion company is allowed in China. However, it has to get the approval from the local authority and has to have the relevant qualifications. Therefore, a big overseas construction company with a representative office in China is not entitled to conduct construction in China. The most efficient way for a foreign constructor to enter the Chinese market is to set up a joint venture with a domestic Chinese construction company or purchase one. However, a wholly foreign invested construction company is only entitled to certain business areas where either the projects are generated from overseas or when a foreign construction technology is needed, whilst joint ventures can contract any local project according to their qualifications.

As a foreign architecture firm, it is possible to set up a WFOE as a consul-tancy firm on architectural design. All official documents and drawings, relating to permission drawings for the local authorities, official tender drawings and execution drawings have to be stamped by a Local Design Institute (LDI) for approval. It is not necessary to have a joint venture; coop-eration with different LDI’s on project basis is possible. All Chinese clients are familiar with this procedure and it is not a problem in itself. It implies that foreign architecture firms are limited to cooperation in the tender and execution phases. Overseas architecture firms can also participate in the Chinese market if they have a domestic Chinese architecture firm as their cooperative partner to work with.

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The most efficient way for a foreign constructor to enter the Chinese market is to set up a joint venture with a domestic Chinese construction company

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marKet trenDs anD DeVeLOpments

China has one of the world’s largest growing construction industries. The World Bank estimates that by 2015 half of the world’s building construc-tions will take place in China. China nowadays has to change its image of “factory of the world” to an image of a country with sustainable building and long-term investments for the future. The challenge of a change to-ward sustainability may pose a serious opportunity for China: China could show that it has not only been gaining power, but also aims for greatness as it develops toward sustainability.

Besides the increased importance of sustainable building, there is a visible trend in construction quality as well. Aiming at sustainability as an invest-ment for the future, companies now have to abide quality control require-ments issued by the Prime Minister in order to improve the construction quality.

Furthermore a trend of a so-called ‘Circle of Blame’ is noticeable.

Hurdles to implementation “The circle of blame”

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Investors‘We would fund

sustainable buildings, but there is no demand

for them.’

occupiers‘We would like to have sustainable buildings but there are very few

available.’

Developers‘We would ask for sus-tainable buildings, but the investors won’t pay

for them.’

constructors‘We can build sustain-

able buildings, but the developers ask for

them.’

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prOJects & tenDers (LOcaL anD natiOnaL)

On UN Climate Change Conferences it is agreed that without China’s action, the current climate change problem cannot be solved. Therefore, under the slogan “Green Building China”, the Chinese government now puts emphasis on the healthy development of Chinese green and energy-efficient build-ings and the promotion of the establishment of resource-saving and envi-ronment-friendly society. Furthermore, solar and other renewable energies will be used.

China and Singapore are now developing Sino-Singapore Tianjin Eco-City. Tianjin is chosen as location for the sustainable urban development project. Furthermore, by 2025, China will develop 20,000 to 50,000 new skyscrap-ers.

More information about government projects could be found on: http://zhaoshang.51zjxm.com/ (in Chinese only).

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Destep factOrs

Demographic

The People’s Republic of China is the second largest country in the world, after Russia. China acknowledges 56 official ethnic groups, of which the Han is the biggest group with 92% of the total population of 1.3 billion people (July 2011 est.). Expectations are that China will have 1.5 billion residents in the year 2035. The median age of the Chinese citizen is 35,5 years, with a population growth rate of 0.49% (2011 est.). Within the next 40 years, the modal average citizen will reach 80 years and the seniors will possess one-third of the total Chinese population.

The biggest migration ever was taking place in the last 10 years. More than 200 million Chinese left their native region for a region with more jobs. The annual rate of urbanization is around 2.3% (2010-2015 est.). The urban population rate was 47% of the total population in 2010. The coastal cities had a huge industrial expansion and that is a big motive for the migration. China’s ongoing urbanization will be a major driver of growth and new cit-ies will emerge in the less-developed inland provinces. The UN forecasts China’s urban population will rise up to 73% in 2050.

Nowadays, although the quality of life has been dramatically improved, large scale of urbanization nation wide has also caused serious environmen-tal challenges in many aspects for Chinese government and citizens. Both central and local level governments have been addressing sustainability high on their agenda with ambitious targets to be achieved in the coming years.

economicChina is one of the fastest growing economies in the world. In 2010 Chi-na shot past Japan to become the world’s second-largest economy, based on current market prices. The Economist forecasts that China will pass America at number one by 2016. It has been the world’s fastest-growing major economy, with consistent growth rates of around 10% over the past 30 years. China is also the largest exporter and second largest importer of goods in the world. The country’s per capita GDP (PPP) was $7,544 (Inter-national Monetary Fund, 94th in the world) in 2010. China’s GDP grew by 10.3%, while the consumer price index (CPI) increased by 4.9%. Behind the

The UN forecasts China’s urban population will rise up to 73% in 2050

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rapid increase of growth rate, there do exist problems of income distribu-tion, which cannot be neglected. The provinces in the coastal regions of China tend to be more industrialized, while regions in the hinterland are less developed.

The large income distribution gap is an obstacle of China’s future economic development. Urban incomes are now more than three times higher than rural incomes. China’s government is taking strong measures to correct this trend by increasing investment in rural areas through the “China’s Go West” policy; they especially focus on infrastructure, irrigation, education and health in western regions. The policy aims to bridge the gap between the economies of China’s coastal regions and western China. Through fa-vourable tax and investment incentives, “Go West” has invested in interior infrastructures, like airports, highways and high-speed rails. These invest-ments make an arrival of new industries and foreign firms possible. More and more companies are now looking west to host new operations and in-vestments.

As a member of the World Trade Organization, China benefits from access to foreign markets. But relations with trading partners have been strained over China’s huge trade surplus and the piracy of goods. The former has led to demands for Beijing to raise the value of its currency, which would make Chinese goods more expensive for foreign buyers and possibly hold back exports. Some Chinese fear that the rise of private enterprise and the demise of state-run industries carries heavy social costs such as unemploy-ment and instability.

Moreover, the fast-growing economy has fuelled the demand for energy. China is the largest oil consumer after the US, and the world’s biggest pro-ducer and consumer of coal. It spends billions of dollars in pursuit of for-eign energy supplies. There has been a massive investment in hydro-power, including the USD 25 billion Three Gorges Dam project.

As China’s economic importance has grown, so has attention to the struc-ture and health of that economy. However, for many years, provinces in China face a shortage of raw materials and energy. There is an overcapacity in many industries, such as cement, steel, cars and construction. Because of these shortages, investment in sustainable building is becoming more and more attractive.

China spends billions of dollars in pursuit of foreign energy supplies

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Social-culturalChina is a multiracial country with 56 recognized ethnic groups, which in-clude ancient and proud nations such as the Mongols, Manchus, and Turik Uighurs. These people live primarily in a ring around China. China has many ethnic groups, religions, customs and habits, which makes the Chi-nese culture not easy to define. Based on the culture dimension model of Geert Hofstede, the culture of China can generally be described.

Geert Hofstede analysis for China has Long-term Orientation (LTO) the highest-ranking factor (118), which is true for all Asian cultures. This Di-mension indicates a society’s time perspective and an attitude of persever-ing; that is, overcoming obstacles with time, if not with will and strength.

The Chinese rank lower than any other Asian country in the Individualism (IDV) ranking, at 20 compared to an average of 24. This may be attributed, in part, to the high level of emphasis on a Collectivist society by the Com-munist rule, as compared to one of Individualism. The low Individualism ranking is manifest in a close and committed member ‘group’, be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount. The society fosters strong relationships where every-one takes responsibility for fellow members of their group.

Of note is China’s significantly higher Power Distance ranking of 80 com-pared to the other Far East Asian countries’ average of 60, and the world average of 55. This is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily forced upon the population, but rather accepted by the society as their cultural heritage. China’s religion is officially designated as Atheist by the State, although the concepts and teachings of the ancient Chinese philosopher Confucius (500 B.C.) are woven into the society at large. Some religious practice is accept-able in China; however, the government sets rigid limits. (Source: www.geert-hofstede.com/hofstede_china.shtml)

ecologicalOne of the serious negative consequences of China’s rapid industrial de-velopment since the 1980s has been increased pollution and degradation of natural resources. Problems such as soil erosion, desertification and the steady fall of the water table, especially in the north, have posed a threat to the sustainable development of the country.

The society fosters strong relationships where everyone takes responsibility for fellow members of their group

25


Because of the rapid growth of the population and the urbanization in Chi-na, big cities are getting more and more overcrowded. Also the shortage of raw materials and energy, China is forced to make use of natural and renew-able energy sources.

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Hongkong

Nanjing

Jinan

Nanning

Changsha Nanchang

Fuzhou

Hefei

Xi’anZhengzhou

Taiyuan

Hohhot

Shenyang

Changchun

Harbin

Urumqi

Xining

Lanzhou

Chengdu

Chongqing

Guiyang

Kunming

Lasha

Nanjing

Shanghai

GuangzhouHong Kong

Wuhan

Tianjin

Qingdao

Dalian

Hangzhou

Shijiazhuang

BEIJING

Yinchuan

TIBET

XINJIANG

QINGHAI

SICHUAN

YUNNAN

GUANXI

GUIZHOUHUNAN

GUANGDONG

GANSU INNER MONGOLIA

SHANXISHANDONG

SHAANXI

HENAN

HUBEI

JIANGXI

NINGXIAHEBEI

LIAONING

JILIN

HEILONGJIANG

ANHUI

JIANGSU

ZHEJIANG

FUJIAN

HAINAN

CHONGQING

netherlands economic network in chinaprovincial capitalprOVince nameprovincial Border

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NeTHerLANDS ecoNoMIc NeTWorK IN cHINA

embassy of the Kingdom of the Netherlands4 Liangmahe nanlu, chaoyang District, Beijing 100600tel: +86 10 8532 0200e-mail: [email protected]

consulate-General Shanghai10/f tower B, Dawning center, 500 hongbaoshi road, changning District, shanghai 201103tel.: +86 21 2208 7288email: [email protected]

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consulate-General Hong Kongsuite 5702, cheung Kong center, 2 Queen’s road, central, hong Kong sartel.: +852 2522 5127e-mail: [email protected]

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NBSo Jinan31/f, Jinan Qilu Bank Building, 176 shunhe street, shizhong District, Jinan 250002tel.: +86 531 8606 5138e-mail: [email protected]

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NBSo Qingdaoa-2505, top Yihe international, 10 hong Kong middle road, shinan District, Qingdao 266071tel.: +86 532 6677 7515 / 17e-mail: [email protected]

NBSo Wuhantower i, room 1306, 568 Jianshe avenue, Wuhan 430022tel.: +86 27 8576 6511e-mail: [email protected]

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