China’s Recent Economic Developments Show Sustainability Really Invigorates An Economy

China pursues econimc recovery through sustainabilityNow that the COP14 climate negotiations have gotten underway, thinking about the downturn in the global economy is all the more saliently linked with sustainability. Many economists have been cured of thinking of the environment as an issue that’s not attractive for the economy in the short term. One compelling example of how environment considerations can stimulate a speedier transition to health is how China is transitioning from a industry based to a service based economy.

Recent economic numbers have shown that the global recession might actually be contributing to this country’s accelerated transformation. The Chinese government recently announced a $586 billion stimulus package to promote a sustainable infrastructure. In order to hold on to healthy GDP growth –China reached double digit GDP growth in recent years– the country is set to embrace the knowledge industry by steering away from energy-intensive jobs. They build on from what they’ve been doing in the last three years, when various measures were taken aimed at kick starting energy efficiency as well as new renewable energy projects. The impact of these measures is already beginning to be visible in the wider picture. Says the Guardian Newspaper;

“China’s energy efficiency and renewable energy policies [..] have begun to make a real impact at the provincial and local levels.”

And against what you might be expecting, China is being rewarded for promoting sustainability and renewable energy. That’s because GDP growth in China’s service sector produces more jobs than does the industrial sector.  And jobs are what the Chinese need more than anything in this precarious global economic downturn. So the service industry’s already bailing them out, generating more new jobs than the industry sector.  Talk about return on investment!

So there you go –  all the talk of using clean energy investments to reinvigorate the economy ain’t fuzzed up hot air; it’s realism at its best.

The Chinese want to spend 70 billion, or 12% of the entire stimulus package on energy efficiency and environmental improvements. A further 70 billion is dedicated to electricity grid improvements and the railways are going to receive a $85 billion facelift.  That’s a pretty shiny example which hopefully encourages other nations to also come up with creative ideas to tackle the global warming crisis.

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  1. It would be wise for all countries to devote a significant portion of their stimulus dollars to building sustainable infrastructure. This is not only the best way to get out of the recession, but also the best way to reenter a new growth phase, as the building of an alternative energy industry will help to mitigate the rise in oil prices once growth returns.


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