International Journal of Sustainable Development &

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Circular economy in China the environmental

dimension of the harmonious society
Jon Naustdalslid
To cite this article: Jon Naustdalslid (2014) Circular economy in China the environmental
dimension of the harmonious society, International Journal of Sustainable Development &
World Ecology, 21:4, 303-313, DOI: 10.1080/13504509.2014.914599
To link to this article: http://dx.doi.org/10.1080/13504509.2014.914599

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Date: 26 September 2016, At: 06:52

International Journal of Sustainable Development & World Ecology, 2014

Vol. 21, No. 4, 303313, http://dx.doi.org/10.1080/13504509.2014.914599

Circular economy in China the environmental dimension of the harmonious society

Jon Naustdalslid*
Norwegian Institute for Urban and Regional Research, Gaustadallen 21, Oslo N-0349, Norway
(Received 6 February 2014; final version received 4 April 2014)
This paper discusses Chinas policy of developing an ecologically based circular economy (CE). In this paper, CE is
understood as the environmental dimension of the wider vision of China as a harmonious society, formulated by the 16th
Party Congress in 2002 in response to the social and environmental problems following in the wake of the unfettered
economic growth policy of China after Mao Zedongs death in 1976. The 18th Party Congress of CCP in 2012 further
strengthened the official resolve to develop China as an ecological civilization characterized by harmony between man and
nature under the epitome Beautiful China. The paper discusses CE in this wider context. It is based on a review of
literature on CE available in English. The aim is to present a more comprehensive understanding and critique of the Chinese
version of CE as part of a wider policy for socioeconomic transformation and development of an ecologically based society,
than has so far been done. The paper concludes by discussing bottlenecks and challenges confronting the implementation of
CE in this wider socioeconomic context. The main problems are claimed to be the challenge of implementing CE as a topdown social engineering process and the lack of civil society involvement.
Keywords: circular economy; environment; China; development; harmonious society

1. Introduction
Since the turn of the century, China has followed a
national strategy of transforming the economy according
to the principles of circular economy (CE). CE may be
seen as a system for production and consumption, which
aims at balancing economic growth and development with
environmental and resource protection, and has also been
explained as a strategy for decoupling economic growth
from resource consumption, and hence secure continued
economic growth without destroying the environment
(Zhu 2008). The concept is inspired by industrial ecology
and practical efforts of resource recovery through recycling and reuse of materials in industrial production. But
the concept is also linked to the wider social and economic
system by including household and other consumption
refuse items in the total recycling system at a local, regional, and finally at a national, levels.
The concept of CE appeared toward the end of the
1990s as a response to the recognition that the singleminded policy of economic growth and industrial expansion that China had been following since Deng Xiaoping
opened up the economy after Mao Zedongs death in
1976 was about to lead to serious environmental problems
and resource scarcity (Su et al. 2013; Wan 2013). The
environmental challenges were, however, not the only
problems occurring in the wake of Dengs economic
growth policy. Toward the turn of the century, there was
a growing recognition that the untamed economic growth
policy had led to social injustice, regional discrepancies,
inadequate social and economic safety networks, corruption and mismanagement; and, as a consequence,
*Email: jon.naustdalslid@nibr.no
2014 Taylor & Francis

increasing risks of social and political unrest (Chi 2007;

Guo & Guo 2008). As a response to these challenges, the
new generation of leaders under Hu Jintao developed the
policy framework of the harmonious society to be based
on a scientific view on development. This strategy aimed
at bringing a stronger value-orientation back into Chinese
development policy and to balance economic growth with
social and economic justice; all led by the state and the
Party and achieved through scientifically based policies.
CE may be seen as the environmental dimension of
this broader policy. Whereas the idea of harmonious
society aims at creating social harmony and balance; CE
aims at creating harmony and balance between nature and
society (Ness 2008, p. 291). But the two dimensions are
linked. Environmental problems are seen to have grave
social and welfare consequences (CCICED 2013) and
hence lead to social disharmony and potential conflict
and unrest (Economy 2007, p. 47f.). More than what is
the case with CE discourses in the western world, CE in
the Chinese version is part of a broader strategy for managing the articulation of nature and society, and where the
overarching goal is to design this as a harmonious relationship. This paper will present and discuss CE in this
context of a harmonious society. I will claim that this
context gives the Chinese version of the concept of CE a
wider and more fundamental meaning than CE as practiced elsewhere. One may, on the other hand, ask if the
top-down political project of solving societys environmental and social problems without a more open participatory bottom-up approach is at all realistic. This is
discussed in the concluding section of the paper.

304

J. Naustdalslid

2. CE, harmonious society, and scientific development

During the last decades, the Chinese society has been
transformed from a relatively poor developing country
into the worlds second largest economy. The development
has been a result of the opening up policy, where China,
from being a relatively closed country with a strongly
regulated economy, opened up for foreign investment
and market-oriented economic reforms at the same time
as the Chinese Communist Party (CCP) retained its total
political control. China may hence be seen to have developed a unique political-economic model: a centrally controlled political system combined with one of the most
liberal and non-restricted market economies in the world.
Priority number one during the first couple of decades
after Maos death was to lift the economy. Economic
growth should lead to a more wealthy society; and even
if some people got richer than others, the basic idea was
that by raising the national economic level, everyone
would gain. This might be true, but not without its costs.
Toward the turn of the century, two serious and interlinked
problems were increasingly attracting attention: deepening
economic and social cleavages; and equally increasing
environmental problems.
On the social side, the rapid economic growth had
created huge social and economic differences (Zheng &
Tok 2007). Rural areas were lagging behind, and the
income gap between urban and rural areas and between
social groups increased (Chi 2007; Han 2008) We see a
rapid development where the rich, particularly in the cities,
get very rich very fast; where the income discrepancies
between groups, particularly in the cities, widen; and
where the urbanrural cleavage also widens, with the
rural areas lagging more and more behind. Generally,
the rapid economic growth during the last decades of the
twentieth century was accompanied by rapidly widening
regional inequalities (Zhang & Zhang 2003). At the same
time as market liberalization and economic growth led to
increased social and income discrepancies, this development also meant the dismantling of the Chinese social
security system, as this existed before the opening up
and the introduction of market economy (Guan 2003).
In the same way as the market forces were liberated
without much attention being paid to the social and distributional effects, the environmental effects of the development were clearly neglected during the first decades
after the reform. The liberated business sector simply
failed to take responsibility for its links to the wider
society and the environment (Valentinov 2013). In the
long run, pollution of air, soil, and water, particularly in
the large and rapidly growing cities, could hardly be overlooked. The rapid industrial transformation led to daunting
problems in the form of land degradation, deforestation,
desertification water depletion, and loss of biodiversity (Su
et al. 2013). It is estimated that one-third of ground water
resources are affected by pollution. Almost all rivers running through urban areas are polluted. One in five cities
has serious air pollution problems, and acid rain is an

increasing problem (Yong 2007). The environmental problems are serious, not only for the environment; they have
also great negative effects on economic growth and social
stability. A World Bank report from 1997 estimated the
cost of air and water pollution in China to between 3.5%
and 8% of GDP (World Bank 1997). The environmental
problems following the rapid economic growth are also
closely linked to the social and health side. Another World
Bank report from 2007 evaluated the health losses due to
ambient air pollution to 3.8% of GDP (World Bank 2007).
The environmental side of the problem is also a question of availability and depletion of natural resources.
China, with its 1.3 billion people, is actually poor in
resources, and it has gradually been realized that ..
the economic and social development in China is facing
the challenge of severe restriction of natural capital (Zhu
& Wu 2007, p. 3). Chinas resource utilization efficiency
is also low in relation to international standards (Ness
2008). Whereas China, in 2005, represented 14.5% of
the worlds economy, the country used 15.8% of the
worlds freshwater resources, 26% of steel, 25% of aluminum, and 47% of cement. Consumption of copper, aluminum, lead, and zinc per unit of GDP is reported to be
between four and six times of the world average (The
World Bank 2009, p. 8). These figures should be seen in
contrast to the fact that per capita natural capital in
China is far less than the average level in the world (Zhu
& Wu 2007, p. 4). And with the rapid economic growth of
around 10% per year that China has experienced over the
last decades, the authorities have, since the 1990s, clearly
acknowledged the fact that ways and means must be found
to reduce pollution and to exploit natural resources in a
more efficient way. Chinas resources are simply not
enough to sustain a continued growth that will bring
GDP per capita and living standards in China more or
less at par with more developed countries (Yong 2007).
Hence, China will, in any case, depend on import of many
raw materials and natural resources. But it is also clearly
recognized that without developing mechanisms and policies for reducing pollution and the production of waste,
continued economic growth will be self-defeating, and the
economic foundation for building the harmonious
society will also be eroding.
Hence, at the turn of the century, Chinese leaders were
confronted with the challenge that the economic growth
policy was in fact threatened by the social and environmental effects of its own success. The economic transformation of China was achieved by the Party and the state
loosening the ideological grip on the economy1 and inviting bottom-up initiatives at all levels of the economy. In
contrast, the response to the market failures of this opening-up policy has been ideological and morally based topdown campaigns and legislation aiming at designing a
more balanced development. The response was found in
a combination of socialist ideology and traditional Chinese
culture in the form of Confucianism (Mahoney 2008) and
Taoism (Zhongwen 2008; Wan 2013). The ideal was to
combine the liberated market forces with the socialist and

International Journal of Sustainable Development & World Ecology

Confucian ideal of harmony and well-being and the Taoist
idea of the supremacy of nature (Wan 2013, p. 148). It
should be a stable and orderly society characterized by
social justice, where humans live in harmony with nature
(Yuan et al. 2006; Guo & Guo 2008). Or, as the then Party
Secretary, Hu Jintao, is quoted to have stated it in a lecture
at Yale University in 2006:
China will pursue a scientific outlook on development that
makes economic and social development people-oriented,
comprehensive, balanced and sustainable; We will work to
strike a proper balance between urban and rural development, development among regions, economic and social
development, development of man and nature, and domestic development and opening wider to the outside world; It
is also rooted in the cultural heritage of the Chinese nation.
(Geis & Holt 2009, p. 91)

The campaign for a more balanced development was

accompanied by the launching of the new scientific concept of development. This is the idea that policies can be
implemented as top-down processes based on scientific
knowledge. Once the policy goals are established and
defined (harmonious society, CE etc.), scientific insight
on society, social and economic mechanisms and natural
processes, all based on empirical data and scientific methods, will guide the authorities in the practical implementation of policies (Geng et al., 2012).
The ideas about CE appeared toward the end of the
1990s (Pintr 2006; Yong 2007; Xue et al. 2010) and were
formally adopted as government policy in 2002 (Yuan
et al. 2006, p. 4). The official recognition of CE as an
overarching strategy for economic development was
strengthened when the primary responsibility for its implementation was transferred from the State Environmental
Protection Agency (SEPA) to the National Development
and Reform Commission in 2004 (Yuan et al. 2006). With
the launching of the 11th Five Year Plan in 2006, CE was
included as a strategic policy element, and the 12th Five
Year plan (20112015) calls for a continuous implementation and further development of CE (Su et al. 2013).
It is noteworthy that the two parallel concepts of a
harmonious society and CE both got their official recognition in the 16th Party Congress of CCP in 2002. In the 17th
Party Congress in 2007, the new tenet of harmonious
society was written into the CCPs party constitution
(Guo & Guo 2008, p. 3). In 2008, the Standing
Committee of the 11th National Peoples Congress (NPC)
formalized key elements of the CE concept in a CE
Promotion Law. The 18th Party Congress in 2012 further
strengthened the ambition to unify the goal of ecological
and social harmony under the slogan Beautiful China. The
development of ideas as formalized in official policies is
summarized as follows in the introduction to an issue of the
Journal Social Science in China devoted specially to the
18th Party Congress and the idea of Beautiful China:
In the 16th National Congress, the CPC proposed that a
harmonious relationship between man and nature must be

305

established. In the 17th National Congress, it explicitly

raised the idea of building an ecological civilization, and
in the 18th Congress, it went further to make beautiful
China a major goal for building an ecological civilization
in the future, providing a systematic exposition of the
issue and giving it unprecedented priority. Beautiful
China is a perfect epitome of the oriental wisdom of
the unity of man and nature, demonstrating mans
respect and awe before nature and compliance with its
dictates. (Ke 2013, p. 140)

3. What is CE?
In Chinas 11th Five Year plan for Economic and Social
Development, CE is described as a system for combining
economic development with resource conservation in
accordance with the principle of 3Rs (The World Bank
2009, p. 10). Article 2 of the CE Promotion Law defines
CE as follows:
The term circular economy as mentioned in these measures is a generic term for the reducing, reusing and
recycling activities conducted in the process of production,
circulation and consumption.

The so-called 3Rs principle, as referred to in the law, is

regarded as a basic pillar of CE. Basically, the 3Rs principle
calls for the full life cycle utilization of products in order to
reduce waste and save resources. The 3Rs2 stand for:
Reduction: The amount of material input into any pro-

duction or consumption process should, as far as possible, be reduced and kept at the lowest adequate level.
Reusing: The aim should be to prolong the lifetime
of products. E.g., the lifetime of clothes should be
extended by leaving used clothes to flee markets
and shops for used items.
Recycling: Waste from one type of production
should, as far as possible, be utilized as input/raw
material in the manufacturing of other products.
Waste should simply be transformed into usable
resources in order to reduce the amount of waste
which has to be disposed of finally.
There is nothing really revolutionary in these principles,
taken one by one. In developed industrial countries, all
these measures are supported and practiced more or less
systematically and more or less extensively (Matthews
et al. 2000; Moriguchi 2007; Mathews & Tan 2011;
Hansmann et al. 2012; Preston 2012; Ulutas et al. 2012;
Ellen Macarthur Foundation 2013a). Most industrialized
countries have probably achieved more than China in this
respect. Paper is recycled, garbage is used as fuel, metals
are recycled, used clothes are collected and reused. More
or less, systematic legislation enacting rules and regulations for sorting building materials when old buildings are
demolished is in place, etc. One way of distinguishing
between such environmental measures, as found more or
less developed in all countries, may be to underscore the
difference between seeing them as elements in

306

J. Naustdalslid

environmental policies, and seeing them as elements in an

integrated economic-environmental system. The latter is
how one (ideally) should read Chinas efforts to develop
CE in the context of a harmonious society. The Chinese
CE is not only organizing environmental policy measures,
CE in the Chinese version aims at being a way of linking
economy and ecology so as to achieve a win-win situation:
economic growth and development should be systematically decoupled from environmental degradation in such
a way that the economy can prosper without automatically
straining the environment (Zhu 2008; The World Bank
2009; Mathews & Tan 2011).
CE is often explained as an effort to develop a new
kind of economy based on ecological principles. Hence,
Zhou defines CE as
economic activities according to the ecological and economic regulations. It is actually an ecological economy,
which appears to be social and material symbiosis of
materials, energy and information between enterprises
and even industries. (Zhou 2006, p. 102)

Hence, CE may be seen as a strategy to harmonize the

relationships between nature and economy based on the
idea that it is possible to arrive at a harmonious relationship between nature and society. CE is the environmental
dimension of the harmonious society.
The basic characteristics of the Chinese model for CE
may be summarized in four points (Zhu 2008, pp. 23):
CE builds on the idea that nature limits the economy

rather than being an idea about environmental management. It aims at creating a win-win relationship
between nature and economy. Hence the national
responsibility for CE is placed in the State
Development and Reform Commission which has
a comprehensive nature instead of environmental
management departments in some other countries
(Zhu 2008, p. 2).
CE is not only a system for garbage treatment, or a
3R economy for treating solid waste. It aims at
being a system for linking resources and economy
regarding all scarce resources, including water, land,
energy, materials and corresponding waste.
CE should be developed into a comprehensive system interlinking various levels from individual
enterprises through industrial parks to systems organized at regional levels.
CE should be developed gradually on all these three
levels (from low-level to high level recycling).
Some interpretations of Chinas CE take their point of
departure in the microeconomic concept of industrial ecology (Graedel & Allenby 1995, p. 10), referring to examples in the west such as Kalundborg industrial complex in
Denmark, and German and Swedish policies to stimulate
cleaner production (Yuan et al. 2006; Geng & Doberstein
2008). This may be seen as a more narrow conception of

CE, relating mainly to industrial development and being

less concerned with the wider organization of the society
at large. CE is here seen as the working language of ecoindustrial development (Geng & Doberstein 2008, p. 232)
and clearly placed in the western tradition of ecological
modernization (Murphy & Gouldson 2000). In the
Chinese context, Geng and Doberstein explain the understanding of CE to mean
the realisation of a closed loop materials flow in the whole
economic system. Different from the traditional linear
production model, a circular economy approach
encourages the organisation of economic activities with
feedback processes which mimic natural ecosystems
through a process of natural resources transformation
into manufactures products byproducts of manufacturing used as resources for other industries In essence the
circular economy approach is the same as the more familiar terms EID, and industrial ecology and fits comfortably within a broad range of ecological modernisation
initiatives pioneered around the world. (Geng &
Doberstein 2008, p. 232)

This is an industrial system where everything the enterprises produce, both products and by-products are seen as
assets to serve as inputs to other productions or raw
material for other products. What may be seen as lacking
in this understanding of CE are the links to the wider
social and economic context.
This is where the Chinese version of CE takes this
thinking a step further:
(O)nly in China has a circular economy been made the
object of official development goals and been taken from
the realm of environmental policy into the realm of
development and economic policy. (Mathews & Tan
2011, p. 437)

Hence, most Chinese scholars when explaining the theoretical background of CE, tend to take the concept further
and refer to a macroeconomic distinction between neoclassical economics, which is characterized as linear
economy on the one hand and ecological economics on
the other, characterized with its circular interdependence between nature and economics (Lu et al. 2005;
Zhu & Wu 2007). At the macro level, classical contributions to ecology/economics like Rachel Carsons Silent
Spring (Carson 1962) and the spaceship earth metaphor,
as presented in the 1960s by scholars like Barbra Ward
and Kenneth Boulding, together with the limits to
growth rhetoric of the Club of Rome in the 1970s, are
mentioned as historical inspirations for CE (Lu et al.
2005; Xia & Yang 2007; Ji et al. 2012; Wan 2013). The
increased awareness and focus on sustainable development, following the Bruntland Report in 1987 (World
Commission on Environment and Development 1987),
is also frequently mentioned as the ideological foundation of CE.
Zhu and Wu point out that classical mainstream economics, as it has served as theoretical foundation for

International Journal of Sustainable Development & World Ecology

Chinas economic development and market economy until
now, does not include scarce resources into its models
(Zhu & Wu 2007), and they point to the eco-economists
represented by Herman Daly (Daly 1996) as theoretical
inspirations for CE3. Xia and Yang also criticize conventional market economics for environmental blindness,
referring to Herman Daly as their inspiration.
Traditional economics, they claim, fail to provide us
with an analytical tool that takes seriously the fact that
natural resources are limited and exhaustible. What the
mainstream economics concerns is no more than whether
market mechanism can distribute the last unit of
resources in the most efficient way (Xia & Yang
2007). On the other hand, Xia and Yang are careful to
point out that there are also differences between ecological economic thinking (or what they call steady-state
economics) and circular economics. Steady-state economics is concerned with mechanisms for keeping economic activities within the limits of a physical reality
governed by the law of thermodynamics. Economics
should change its focus from the traditional issues about
production and consumption to the problem of adapting
economic activities and welfare production to the limits
of nature and biodynamics. The economic system, in
short, should be regulated within, and according to, the
laws of nature. CE, on the other hand, is claimed to
regard economy and nature as different subsystems of
the same system (Xia & Yang 2007) Based on their
interpretation of the differences between the three
approaches to economic thinking, Figure 1 may serve
as an illustration.
It is in this wider sense that CE links up with the
concept of the harmonious society by optimistically claiming that it will lead to a win-win relationship between
socioeconomic and environmental dimensions of
development:
On economic aspect, it contributes to a higher regional and
domestic competitiveness through an increase in the effectiveness of resource allocation, resource utilization and
productivity. Environmentally, it reduces negative externalities mainly by redesign of the industrial structure in an
ecological way. Socially, it resolves the unemployment

Figure 1. Three approaches to the articulation of nature and

economy.

307

problems, equals distribution of economic growth and

improves peoples overall well-being. (Su et al. 2013, p. 3)

4. Organizing CE: three levels

The Chinese ambition to develop CE as a socioeconomic
organizing principle and not only as an environmental
measure, is reflected in the so-called three circles principle for the societal organization of CE (Geng &
Doberstein 2008, p. 233):
The first circle includes measures at the corporate

level (the micro level), including initiatives such as

eco-design of manufacturing plants, waste minimization, cleaner production, and environmental management systems. Strictly speaking, such initiatives
if they are not included in wider circles can
hardly be called CE in the Chinese conception of
the term. These are general cleaner production measures and seem to aim at cleaning up the industrial
process and save resources on the level of industries
and production chains. The enactment of Chinas
Cleaner Production Promotion Law of 2003 marks
the stronger national emphasis on cleaner production at the enterprise level in China.
The second circle is the inter-firm level (or meso
level), where a number of eco-industrial parks have
been developed. The idea is to colocate different
industrial activities in order to facilitate the trading
of industrial byproducts, e.g., heat energy, wastewater and manufacturing wastes (Yuan et al.
2006). The co-localizing of enterprises is supposed
to reduce interaction costs and create more integrated industrial nodes based on complementarities
and mutual benefits. It is an integrated approach to
industrial development, whereby different firms and
businesses form wider networks, in order to exploit
resources and raw material more efficiently and to
use by-products from some businesses as resources/
inputs into the production of others. But Chinese
industrial parks differ from similar constructions as
we find them in the west. Chinese industrial parks
are integrated production and residential areas,
including in addition to industrial undertakings, factories and dwellings, areas for scientific activities
and research, business and service areas to serve this
integrated community.
The third circle of the CE concept is the societal (or
macro) level. Typical activities here include the
development of eco-cities and eco-provinces.
Different from the first two levels, this level attends
to both production and consumption (Geng &
Doberstein 2008, p. 234). At this level, eco-based
activities and structures at the micro and macro levels
are linked to systems for recycling, reuse, and
resource saving organized at a higher territorial
level and linked also to resource circulation activities

308

J. Naustdalslid

Figure 2.

Example of CE construction combining different elements*.

Note: *The figure is inspired by Ji (2006).

and processes linking up individuals, households,

and societal infrastructures, such as transport, refuse
collection from households, recycling of waste, reuse
of consumer items, and energy-saving arrangements.
Local authorities have an important role in organizing
and implementing CE at this level.
An important difference between CE as propagated in
Western capitalist economies (Preston 2012; Ellen
Macarthur Foundation 2013a, 2013b) and in China, is
therefore that in the case of China, CE is supposed to be
organized as a structured territorial hierarchy. In this way,
CE is also seen as a strategy for linking urban and rural
areas (Ji 2006). The schematic illustration in Figure 2 of
how substructures for CE may be linked, as a multilevel
regional structure, to form a wider system of CE, may
serve as an example. This illustration also visualizes the
point made in this paper: that the idea about the harmonious society and the CE strategy are closely linked. The
interregional system of CE comprises of the integration of
four sub-systems: the industrial system, the infrastructure
system, the system for eco-environmental protection, and
the social and public services system.
5. Strategies for implementation Plan C: lifting
oneself by ones bootstraps
The implementation of CE in China is less developed
than its principles and its theory. As explained above,
the general legal framework for CE was in place in
2008, when the 11th National Peoples Congress
(NPC) adopted the Circular Economy Promotion
Law. By placing the national responsibility for CE at
the very top of the Chinese political hierarchy, in the
National Development and Reform Commission,
Chinese authorities have also underscored the national
priority given to CE as a socio-environmental strategy.
However, at this stage, the process of transforming the

Chinese economy in a more sustainable direction has

not got very far (Li 2013). One thing is political and
ideological ambitions; quite another thing is political
reality. The challenge confronting Chinese leaders is to
transform the economy in the direction of CE at the
same time as economic growth continues unabated. This
may perhaps best be seen as national attempt to lift
oneself by ones bootstraps. Zhu and Wu have outlined
three alternative tracks or models for Chinese economic and social development till 20204 (from their
starting point which was 2007), where the third alternative (model C) may be seen as an attempt at such a
bootstrap-lifting exercise:
Model A is the traditional material-based model with

high resource consumption and high environmental

pollution. This is the track which China has been
following up till now. The authors discard this alternative as absolutely unsustainable in the long run. If
development continues along this track till 2020,
economic growth would be four-fold, but ........
the environmental impact on future economic and
social development could be four or five times of
todays level. Obviously, such a model not only
predicates severe social instability and serious
resource and environmental problems, but also
undermines the growth of economic development
itself (Zhu & Wu 2007, p. 5).
Model B is the opposite of model A and represents
the ideal situation where economic growth is delinked from environment. This would, in practice,
mean a continued economic growth combined with
zero, or even negative, pressure on the environment, or absolute decoupling of economic growth
and environmental degradation (Jackson 2009).
This is the ideal model and necessary in the long
run. Model B is, however, deemed unrealistic for
China in the short perspective: if China aims at

International Journal of Sustainable Development & World Ecology

increasing economic growth four-fold without
increasing the environmental pressure, resource
productivity would have to be improved by a factor of four or five. And if the environmental pressure at the same time should be substantially
reduced, resource productivity would have to be
improved 810 times.
What Zhu and Wu propagate is the middle road
which they call Plan C (or relative de-coupling).
According to this middle road alternative,
Chinas economy will keep growing, and resource
consumption and pollution will continue to
increase to start with, but at a reduced rate, and
then keep stable (Zhu & Wu 2007, p. 6). In other
words: the Chinese alternative as propagated by
Zhu and Wu, is to use the time up to 2020 to
reorient the economy in the direction of CE at
the same time as the ambition of rapid economic
growth and rising living standards are retained.
What the authors put up as a concrete goal is a
four-fold economic growth with only a doubling of
resource consumption and environmental pollution.
From 2020, according to Plan C, China would be
in a position where it would be possible to de-link
economic growth from environmental pressure
(Zhu & Wu 2007).
This may be seen as some kind of lifting-oneself-byones-bootstraps strategy. At the same time as economic
growth continues unabated, the government will transform
this very economy in the direction of the principles of CE.
Here is where the principle of scientific development
comes in.
6. Implementing CE: the scientific development
strategy
The practical implementation of CE is seen as a gradual
transition process directed, controlled, and monitored
from above by means of a system of indicators against
which individual CE programs, and in turn the national
development, can be measured. In the same way as
development of the harmonious society in terms of a
more balanced social development is seen as a scientific
project based on extensive empirical information about
socioeconomic conditions in the Chinese society; so
implementation of CE is, first of all, seen to require
systematic quantitative data and information in order for
the Chinese leadership to monitor and control the implementation process. The old adage that you cant manage
what you cant measure has been referred to as a basic
principle for Chinese policy implementation (Geng et al.
2012).
A general concern in the discussion on implementing
CE in China is therefore the need for indicators in order
to be able to monitor and assess national progress, and to
compare different projects and programs. Since most of
the practical efforts to promote CE are in the form of

309

pilot programs and demonstration projects, evaluation

criteria and indicators for measuring success and failure
become particularly important. The World Bank presented a proposal for an indicator system at the national
level in a short report in 2006 (Pintr 2006), concluding
that the approach most relevant for CE indicators is
material flow analysis and accounting (MFA), based on
the principles and methods of mass balancing and input
output analysis. A national system of indicators along
these lines was developed by Chinese authorities in
2007. (The World Bank 2009; Geng et al. 2012; Su
et al. 2013) This is an indicator system at two levels
and based on the MFA principles. The first set consists of
22 indicators to be used at the macro level for general
evaluations of CE, both at the level of individual regions
and at the national macro level. The other set, consisting
of 12 indicators, aims at being used for assessing the
state of CE development at industrial park (or meso)
level. Indicators aim at measuring such as use of mineral
resources, energy, water etc., recycling rate of various
substances, production of waste and emission of pollution
substances to the air.
Chinese authorities seem to build their scientific
approach to policy-making and policy-implementation on
an assumption that once authorities have the correct factual knowledge about the state of affairs in society, adequate measures will follow. It reflects a rather mechanical
view on society as a system that, with sufficiently detailed
and scientific knowledge, can be engineered and formed
from above. This scientific perspective on politics is also
reflected in Chinese research to support the implementation of CE. One example may be Liu et al., who have
made an effort to transform the principles of CE into a
structured system based on mathematical modeling. Their
idea is to bring the bargaining games among stakeholders
on to mathematical form and then integrate these games
into a multi-objective programming model; in their case
of the Qaidam Circular Economy Pilot Area, where the
objective of environmental pollution minimization can be
converted into constraint conditions (Liu et al. 2012). The
approach is typical for the Chinese conception of harmonious society, as a result of scientific analysis and decision-making based on objective criteria. There is a strong
belief and an ideology that conflicting interests and political issues can be brought on formula and resolved by
means of scientific methods:
The problem is converted into a single objective mixedintegral programming model of the maximal profit under
various constraint conditions including natural resources,
environmental capacity and social and economic factors,
etc. (Liu et al. 2012)

Such modeling efforts may be valuable and make explicit

some of the constraints inherent in efforts to implement
CE (or other reforms) in China. They may, however, lead
to an underestimation of real conflicts and the need for
stakeholder involvement, management skills, and societal

310

J. Naustdalslid

participation in actual reform work (Weichselgartner &

Kasperson 2010).

7. Constraints for implementing CE

CE has been promoted as a program for a more harmonious relationship among society, economy, and nature in
China. Viewed in this ambitious perspective, it is difficult
to see how the rather narrow scientific and indicatorbased approach to the implementation of CE can be adequate. Recent attempts to assess the implementation process also indicate that to the extent that a relative
decoupling of economic growth and environmental degradation is actually taking place in China, this is more due to
structural change in the most developed regions than to the
successful implementation of CE (Li 2013). In a broader
perspective, at least three areas stand out as critical in an
assessment of the challenges for implementing CE in
China:
(1) The system of indicators is inadequate and does
not reflect the broad socioeconomic scope of CE
in China.
(2) Supporting policies are inadequate and do not
support CE as would have been required.
(3) There is a lack of bottom-up involvement and
support for CE.
In the following, I shall comment on these three critical
points in turn.

7.1. Inadequate indicators

Even though the governments indicators represent an
important step in promoting the implementation of CE in
China, the set of indicators still have weaknesses:
such as lack of social indicators, urban/industrial symbiosis, prevention-oriented indicators and absolute energy/
material reduction indicators, as well as barriers to implementation. (Geng et al. 2012, p. 221)

The authors also call for a clearer identification of how the

indicators have actually been used and how they can be
used. There are few, if any, systematic and critical studies
looking into the actual governance processes for implementing CE at the local level. One important point is the
lack of social and welfare-oriented indicators. This seems
to indicate that the linking of the environmental and the
social dimensions of CE is more developed in theory than
in practice. There are, however, others and more researchbased attempts to assess the progress of CE, where also the
social side is more pronounced, even though such indicators are absent in the system of government indicators
(Wenbo 2011; Yang et al. 2011).

7.2. Inadequate supporting policies

The general legislation to promote CE is in place, but other
legislation, regulations, and development of effective policy instruments hardly follow up. The World Bank Report
from 2009 points to a number of areas where policies to
support the implementation of CE need to be improved
(The World Bank 2009). These include legislative harmonization to ensure that the objectives of other laws are
brought in line with that of the CE Promotion Law, supplementing the command-and-control measures with more
market-oriented measures (such as emission trading and
environmental taxes), and the adjustment of resource
prices so as to better reflect their scarcity value.
Current tax regulations do, for example, discourage
enterprises and the public from recycling and reusing
resources. Resource taxes are low, and in many cases raw
materials are so cheap that recycled alternatives become
more expensive than the purchase of new materials. In
other cases, when recycled materials may be cheaper, so
that the value added for the industries become higher, the
value-added tax may actually still make use of recycled
materials unprofitable. They also point to the fact that many
polluting products and resource-based products are exempt
from consumption taxes (Geng & Doberstein 2008).
Lack of demand for environmentally friendly technologies is also seen as a major constraint. There are few
incentives for changing to new technologies and knowledge about, and training in, such technologies is inadequate. Lack of adequate information is also blamed on
lack of government coordination and fragmented management frameworks. This also makes evaluation and monitoring difficult. Different agencies control different types
of data and information:
Critically, neither of these agencies is subordinate to the
other, and cross-agency collaboration is still rare, with the
result that neither agency can play a leading role nor
collaborate in providing such information to the corporate
world. (Geng & Doberstein 2008, p. 236)

7.3. Little bottom-up involvement

Public participation barriers have also been listed as a
major constraint, and it is maintained that China currently
lacks the human and institutional capacity to encourage
public participation in circular economy (Geng &
Doberstein 2008, p. 236). Information about the concept
of CE is said to be inadequate as is also the case with the
promotion of academic programs in universities to promote the basics of CE. Also, most government officials
lack adequate understanding of the principles of CE.
Hence, a broad-based program for capacity building is
called for in order to educate officials, policy-makers,
and the general public.
Lack of public awareness about CE is corroborated by
a study undertaken by Liu et al. in 2009. In a case study
from Tianjin, they carried out a survey of public awareness
and performance for promoting CE, concluding that (r)

International Journal of Sustainable Development & World Ecology

esidents in Tianjin have limited awareness and poor understanding of CE (Liu et al. 2009, p. 269). Another survey,
carried out by Xue et al. and covering six cities in
Northwest China, gives a somewhat more optimistic picture (Xue et al. 2010). This is a survey of public officials
in the six cities, and the results indicate (as one would
expect) that public officials are better informed about CE
than what is the case with the general public. About 78.6%
of the respondents claimed that they knew what CE is and
only 3.2% answered that they had no idea. However, even
though close to 80% had heard about CE, only 13%
claimed that they knew CE very well (Xue et al. 2010,
p. 1299).
8. Concluding discussion: CE in a harmonious society
a question of scientific social engineering?
The project of transforming the Chinese economy from a
linear economy based on unfettered exploitation of natural
resources and with little concern for environmental consequences, into a CE where economic growth is decoupled
from environmental degradation has been conceived of,
formulated, and is being implemented from above. It is a
key element in the wider strategy to build the harmonious
society, where social and economic cleavages and conflicts are leveled out, and where people, in line with
Confucian and Taoist thinking, live together in peace and
harmony between themselves as well as in their relationship to nature.
The idea of CE is not unique for China. Also in the old
industrialized world, CE is a living concept, and many of
the concrete ideas being implemented in China have their
origin in traditional industrial ecology and environmental
policies in countries like Germany, Denmark, Sweden, and
Japan. There is, however, a striking difference between CE
as promoted in more developed industrialized countries
and in China: in the first case, CE is mainly promoted
from below, by environmental organizations, think tanks
in the civil society, and NGOs directing their messages
mainly at industries and businesses, and by laying pressure
on authorities to install enabling laws and regulations. In
the case of China, CE is formulated as a national government policy aiming at transforming not only industry but
indeed the socioeconomic organization of society at all
levels; and CE is clearly linked to a political vision of
constructing a harmonious society as a top-down process
and by means of scientific social engineering. This difference is also reflected in the microeconomic approach to
CE in western capitalist countries and the more macrooriented and top down approach to CE in the case of
China. Whereas in the case of western capitalism, one
may ask if governments do enough to support and to
provide a national framework for CE, the same question
may also be asked in the case of China, as underscored in
the discussion in this paper. But what on the other side
may be seen as the real challenge in the case of China is
the lack of civil society involvement and drive to promote
CE and to push for organizational and institutional

311

solutions to replace the present system of environmental

degradation.
The formulation of the system of indicators for the
implementation of CE clearly reflects this top-down
approach. As has been explained in the discussion above,
the national system of CE has three levels. The system of
indicators, however, only covers the macro and the meso
levels. There are no systematic indicators to guide and
assess business behavior down at the level of firms and
businesses (Geng et al. 2012). Geng et al. also point out
that even though the development of a CE in China would
require active participation and inputs from various interests and stakeholders at all levels of society, the actual
development of the system of indicators took place in a
rather closed and expert-dominated process, practically
without any involvement of the civil society outside government circles:
Clearly, the involvement of a broader set of stakeholders
(e.g. consumers, communities, non-governmental organizations, and even a broader industrial sector representation) may have resulted in differing measures identified.
(Geng et al. 2012, p. 118)

The system of indicators may also be seen to share a

common characteristic of sustainability indicators; namely
a limited capacity to monitor social discrepancies and
participatory justice (Fredericks 2012). As a result, even
though at the ideological level CE is promoted as a strategy for transforming the whole chain of economic activities from resource extraction to consumption, with
implications for the whole organization of society, in
practice, the links between the social and the economic
dimensions of CE are poorly reflected in practical policy.
However, even if the system of indicators had been
more adequate, and provided better quantitative and qualitative data at all levels, there would be no automatic link
to successful implementation of the CE (or the harmonious society and beautiful China). There exists a strong
and unfounded belief, not only in China but in wide
circles, and perhaps particularly relating to environmental
policies, that factual knowledge in itself leads to adequate
action (Pielke Jr 2010, p. 211 ff). It is also a well-established truth in evaluation research that evaluations and
monitoring results are not necessarily translated into policies (Weiss 1977). The translation of political goals into
real social change is a complicated and many-facetted
process that requires either an implementing authority
with total control over all aspects of society, or a giveand-take process involving stakeholders and social institutions at all levels.
The Chinese strategy for implementing CE may probably best be described in Karl Poppers terms as utopian
social engineering; i.e., a strategy where government, by
means of a technological social science (.), aims at
remodeling the whole of society in accordance with a
definite plan or blueprint. (Popper 1961, pp. 6465) As
Popper pointed out, such utopian social engineering

312

J. Naustdalslid

requires the centralized rule of a few and the suppression

of dissent (Popper 1966). This fits well in with the Chinese
approach to the implementation of CE: the idea that it is
possible for a centralized government to transform the
society from above by means of scientific and researchbased knowledge about society. It also fits well within the
traditions of the Chinese communist regime. However,
compared to earlier sweeping and more or less revolutionary reforms in China implemented, and/or mobilized,
from above, like the Cultural Revolution or the one child
policy, the idea of a harmonious society and an economy
in harmony with nature is sought implemented in a quite
different context. Now the state has let go of its total
control of society, and particularly the economy; the
economy is opened up to the rest of the capitalist world
market and the ability to control society from above is
much reduced. Here Poppers concept of a more piecemeal social engineering (Avery 2003) would possibly be
more adequate, as it does not assume total top-down
control of society but opens up for democratic action,
political compromise, and tolerance in settling political
dispute.

Acknowledgments
The research on which this paper is based has been funded by the
Research Council of Norway, grant no. 209687/E40. Thanks to
my colleague, Geir Orderud, for comments and to Helena
DellAra for assistance with language editing.

Notes
1.
2.

3.
4.

Deng Xiaopings famous statement: It doesnt matter

whether the cat is black or white, as long as it catches mice.
Others have added a fourth R: rethink pointing to the need
for and role of innovation and development of new and up
to now unknown technologies (Ji 2006) In a recent article,
Wenbo Li adds even a fifth R, repair (Wenbo 2011).
For a comprehensive presentation and overview of ecological economics, see Costanza (1991).
Their discussion is inspired by Lester Browns book Plan
B, where he argues for the necessity of decoupling economic growth from resource depletion and pollution. His
book is also published in China (Brown 2003).

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