Consumers around the world, especially in developed countries, share responsibility for China’s growing ecological impact overseas, argues the World Wide Fund for Nature (WWF) in a new report.

In “Re-thinking China’s Outward Investment Flows,” published on April 25, the global conservation organisation points out that the main economic driver behind China’s growing overseas investment is its demand for natural resources to produce goods for developed country markets.

According to Dennis Pamlin, the report’s co-author and WWF International’s Global Policy Adviser, most natural resources imported to China are re-exported in the form of value-added products. For example, he says, 70% of imported timber from Southeast Asian countries is processed into furniture and exported to the United States and European Union.

Sweden has been able to reduce its carbon emissions by 10% because Chinese and Indian companies are producing for its people, he adds.

He further points out that China’s exports are dominated by foreign companies in China.

“It’s a global challenge,” says Pamlin. “And equity must not be forgotten.”

The report recommends a “triangular approach” in trade and investment analysis and policy-making, with countries classified into three groups: natural resources providers, manufacturers and consumers. Triangular discussions for sustainable globalisation—instead of the traditional bilateral dialogues—should be established between the countries and regions playing these respective roles. This approach could aid the transition towards a global circular economy, in which consumption patterns provide a higher quality of life with far lower consumption of natural resources.

Despite the fact that China’s production suffers from low energy-efficiency and environmental standards, which is also reflected in its overseas investment, WWF still holds high expectations for China.

Chinese infrastructure and investment patterns are still being developed, it says, and this presents a window of opportunity to put in place structures that ensure that both government and business policies support long-term sustainable development.

“Chinese outward investments can be viewed as an indicator of the state of the global economy,” the report says. “(It) will affect the way in which the global economy will develop.”

Report by Chang Tianle, May 27 2007