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New report highlights opportunity for China's cities to lead global circular economy transition

September 20, 2018
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  • The report shows that applying circular economy principles at scale in China’s cities could make goods and services more affordable for citizens, while at the same time making cities more liveable, reducing emissions of fine particulate matter by 50%, emissions of greenhouse gases by 23%, and traffic congestion by 47%, by 2040
  • China’s cities are well placed to become internationally-recognised beacons of successful circular economy transitions, supported by the country’s leadership on circular economy policies, continuing urbanisation, rapid development of digital technologies, and a boom in asset-sharing platforms

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

The report, ‘The circular economy opportunity for urban and industrial innovation in China’ was produced by the Ellen MacArthur Foundation in partnership with Arup and McKinsey & Company, supported by UNCTAD and funded by the MAVA Foundation, with feedback from public institutions, academics and business circles in China.

The analysis, which identifies opportunities across five focus areas, built environment, mobility, nutrition, textiles and electronics, shows that applying circular economy principles at scale could save businesses and households approximately CNY 70 trillion by 2040 (16% of China’s projected GDP). This would enable more of China’s urban dwellers to enjoy a middle-class lifestyle, while at the same time, see China’s cities reduce emissions of fine particulate matter by 50%, emissions of greenhouse gases by 23%, and traffic congestion by 47%, by 2040.

China has long been a pioneer of circular economy policies and practices, and China’s cities are hubs of circular economy innovation. This new report shows that transition to a circular economy presents China’s cities with significant opportunities to create new value, economic growth, and further drive that innovation, while becoming more liveable for citizens.

- Dame Ellen MacArthur, founder, Ellen MacArthur Foundation

China’s cities are well placed to adopt a circular economy. China has been a frontrunner on circular economy for more than two decades. It continues to lead on the topic, as demonstrated by its recent signing of a memorandum of understanding with the EU to align policies that support such a transition. The country’s continuing urbanisation, rapid development of digital technologies, and boom in asset-sharing platforms present significant opportunities for further industrial innovation and circular urban development. Pioneering cities and businesses in China are already beginning to capture these opportunities as demonstrated by multiple examples.

However, a systemic shift towards the adoption of a circular economy in some of the world’s largest cities is not without challenges. The report highlights that for the benefits of a transition to a circular economy to be realised at scale, collaboration between decision makers, government institutions, along value chains, and between public and private sectors, would be highly advantageous.