INSIGHTThe Journal of the American Chamber of Commerce in Shanghai - Insight May/June 2017 www.amcham-shanghai.org getting china green business and the environment Can China navigate its environmental challenges while maintaining strong economic growth? We take a closer look at government policies and business strategies promoting sustainable development and green growth in China. FEATURES P.08 POLICY P.20 MEMBER FOCUS P.38 PwC looks at developments Barbara Finamore of the NRDC Q&A with Jing Nealis of Shunfeng in green finance on China’s climate change efforts International Clean Energy Limited MOVERS AND SHAKERSCAREER TheINSIGHT Journal of the American Chamber of Commerce in Shanghai - May/June 2017 AMCHAM SHANGHAI FEATURES President 08 The Rise of Green Bonds in China KENNETH JARRETT PwC looks at developments in green finance VP of Administration & Finance 10 Selling Solutions to Pollution HELEN REN How companies are responding to China’s pollution problem Directors 13 How Interface Localizes its Sustainability Agenda Committees One company’s quest to instill a culture of sustainability in its staff JESSICA WU 16 Motivating Chinese Factories for Environmental Performance Communications & Publications How to incentivize green production IAN DRISCOLL 18 How do We Stay Productive in an Information-overloaded WeChat World? Government Relations & CSR David Allen and Cyrille Jegu, productivity consultants, provide advice VEOMAYOURY "TITI" BACCAM Trade & Investment Center LEON TUNG POLICY PERSPECTIVES 20 Is China the Next Climate Leader? Barbara Finamore & NRDC colleagues consider China’s climate change efforts 22 Bumps on the Road INSIGHT Government efforts to speed the creation of a dynamic EV market in China 25 Dealing with China’s Debt Senior Associate Editor What China can do to avoid the risks associated with growing debt RUOPING CHEN Why China’s New Renewable Energy Targets Lack Ambition Associate Editor 27 Putting China’s energy goals under the microscope DOUG STRUB Blindsided by China’s March to Clear Waters Content Manager 29 Can China manage its resources to ensure water security? DEBORAH TANG Understanding China’s Cyber Security Law Design 31 GABRIELE CORDIOLI Objectives, compliance and business recommendations Printing SNAP PRINTING, INC. MEMBER NEWS 34 Month in Pictures Selected photos from the past two months’ AmCham events 36 Event Report INSIGHT Recap of selected events from last two months SPONSORSHIP 38 Member Focus Q&A with Jing Nealis of Shunfeng International Clean Energy Limited (86-21) 6279-7119 Story ideas, questions or comments on Insight: Please contact 41 Committee Chair’s Corner Doug Strub Essay by Michael Rosenthal, chair of AmCham Shanghai’s Environmental Committee (86-21) 6279-7119 ext. 5668 [email protected] 43 Overview of AmCham Shanghai’s Ethics Committee Introduction to the Ethics Committee and its members Insight is a free monthly publication for the members of The American Chamber of Commerce in Shanghai. Editorial content and 44 President’s Note sponsors' announcements are independent After Mar-a-Lago, now what? and do not necessarily reflect the views of the governors, officers, members or staff of the Chamber. No part of this publication 45 Board of Governors Briefing may be reproduced without written consent Notes from the last two months’ meetings of the copyright holder. 46 Esoterica Mobike mobilizes the masses Special thanks to the 2016-2017 AmCham Shanghai President’s Circle Sponsors Shanghai Centre, Suite 568 2017 1376 Nanjing West Road Shanghai, 200040 China tel: (86-21) 6279-7119 fax: (86-21) 6279-7643 www.amcham-shanghai.org May/June 3 China is big. The People’s Republic tion as a luxury they couldn’t afford. They Chairman’s boasts the world’s biggest population and prioritized industry and job creation and will soon have the largest economy. China were reluctant to impose regulations that LETTER also consumes the most coal, produces might impede growth. the most carbon gasses and pumps more Today China’s views are changing, and chemicals into the ground and water supply for good reason: Pollution creates costly than any other nation. health care burdens and hampers business China’s cities are highly polluted across activity in any number of ways. China also a number of metrics related to soil, water, wants environmental technologies to be a and air. The New York Times has reported major driver of economic activity and job on cities in China that have reached a level growth. China is positioning itself to be a of 1,000 micrograms of PM2.5 per cubic leader in the fight against climate change meter; the World Health Organization rec- and environmental degradation. ommends exposure of no more than 25 China’s plan looks far into the future. It is micrograms. China’s citizens, normally re- building capacity in clean and sustainable luctant to criticize their country, are angry energy and new energy vehicles. Already it and frustrated. Public protests and sharply is a world leader in solar and wind energy worded blog posts show how bold people and has mandated that 30% of government have become. vehicles should use clean energy. The China’s government, not known for tol- Chinese National Energy Administration erating outspoken criticism, may have got- announced that the country would spend ten the message and has taken aggressive $360 billion on renewable energy, creating steps to put new environmental laws in more than 13 million jobs. place. In 2015, China joined more than 190 These plans are not perfect. We can nations in signing the Paris Agreement on debate the safety of nuclear power plants, Climate Change. Moreover, they committed the efficacy of wind, and the economics of to one of the most aggressive numbers of solar. Electric vehicles may be clean, but in all major countries to reduce the percent- China people still depend on power that is age of carbon emissions by 2030. produced primarily by coal. The challenges KER GIBBS These words have been backed up by we face to save our planet are many. The di- Chair of the Board of Governors deeds. According to the International Energy rection that China is taking, however, is the Agency China’s coal consumption has been right one. flat or slightly down the last two years. China China will face challenges in this new is adopting new standards and now evalu- role as a leader against the effects of cli- ates officials based on environmental goals, mate change. Global powers are always not just economic growth measures. Some examined and criticized, as they should be. experts say China’s commitment to reduce That’s how power is held in check and the carbon emissions is not only achievable but best solutions are found. Notoriously thin- may even come in ahead of their goal. skinned, China will need to be careful when Are we, as residents in China, satisfied throwing economic weight around. If China with the results so far and content with continues to finance coal-burning power the efforts being made? Of course not, nor plants abroad while moving away from coal should we be. The quality of our air, water, domestically, hackles will rise. Infrastruc- and soil is still horrible. The Chinese peo- ture projects under One Belt One Road ple will continue to push their government should be scrutinized for adherence to high and hold their officials accountable for environmental standards and principles. cleaning up and protecting the environ- The impact of human activity on our envi- ment. There are also issues with the integ- ronment and the sustainability of our planet rity of data reporting, transparency, and could be the most important issue of our the degree to which regulations are im- time. Future generations will rightly hold us plemented consistently across the coun- to account. This issue also binds us together. try. Despite these problems, movement is Some countries will lead while others fail in the right direction. to act, making our common task that much China’s current environmental policies more difficult. China has chosen to lead. As represent a significant shift in thinking. Pre- long as the goal is to preserve the environ- viously, China aligned itself with developing ment on the only planet we have, let’s hope countries that saw environmental protec- others make the right choice to follow. I www.amcham-shanghai.org 4 Movers and Shakers highlights senior-level personnel changes within the Chinese government and at multinational companies in China Private Sector GOVERNMENT YUM AVNET Yin Hong was Yum China Holdings, Avnet, a global promoted to deputy Inc. named Joey Wat technology distributor, party secretary of president and chief named Frederick Fu Shanghai. Most recently operating officer of president of Avnet, Asia Yin was a member of Yum China. In addition Pacific. In his new role, the municipal standing to overseeing the KFC Fu will be responsible committee. Before that, brand, Wat will expand her responsibility to for the strategic direction and business he was the vice secretary-general of oversee the company’s Pizza Hut Casual growth in the region. shanghai municipal government. From 1996 Dining and Pizza Hut Home Service brands. He joined Avnet in October 2006 and was to 2008, Yin took leadership positions in Wat joined Yum! Restaurants China in named regional president, China, overseeing various districts of Shanghai, including September 2014 as president of KFC the company's electronic component business Songjiang, Changning and Zhabei. China, and was promoted to chief growth in China. Most recently, he served as executive officer of KFC China in August acting president for Avnet Asia and Japan. 2015. Prior to that, she took various Prior to Avnet, Fu was the chief marketing Xu Liyi was named leadership positions at A S Watson group officer at Surface Mount Technology Ltd, mayor of Hangzhou, since 2004, most recently as the managing responsible for worldwide marketing and the capital city of director of Watsons UK.