The Central Economic Work Conference held in December last year pointed out that there can be no delay in the transformation of the economic mode in view of the international and domestic economic situations. This is a rational and instructive assertion. The influence of the international financial crisis has not yet subsided, and the foundations for the recovery of the global economy are not yet solid. Global problems in resource environment and climate change are increasingly serious. Sustainable development represents unprecedented challenges. As a highly open developing country that is becoming increasingly incorporated into the global economic system, China’s economic and social growth and its resource environment are influenced by these problems, with huge external pressure on its sustainable development. Meanwhile, although China has made great efforts in environmental protection, the situation is still serious, and many new characteristics are appearing in environmental problems. Internal pressure on sustainable development has not been fundamentally relieved. In a complex situation with internal and external pressures, China must take rational countermeasures to seize opportunities for sustainable development from various challenges.
I. Fully understand the profound influence of the international financial crisis on economic development and turn external pressure to internal driving force
Since 2008, the international financial crisis has spread and the world economy has been devastated. This crisis is the most serious challenge to the international economy since the great depression of te 1930s. As predicted in the World Economic Situation and Prospects 2009: Update as of mid-2009 released by the UN, the world gross product (WGP) is expected to fall in the baseline scenario by 2.6% in 2009, and the average decline of developed economies will be -3.9%. China’s exports will drop sharply. According to data published by the National Bureau of Statistics of China, the GDP for the first three quarters in 2009 was RMB 21.78 trillion. Calculated at the comparable price, this represents a growth of 7.7% compared to the same period last year. However, the amount of exports is only USD 846.6 billion, representing a drop of 21.3% compared to the same period last year. The international financial crisis has presented huge challenges to China’s export-oriented economy. However, history tells that a crisis contains new opportunities for development. Although the crisis has influenced China’s real economy to a certain extent, it has also brought about valuable opportunities for China to restructure, increase domestic demand and develop new strategic industries. China should fully seize these opportunities and further lay down solid foundations for sustainable development.
First, the financial crisis has brought about opportunities for the readjustment of economic and industrial structures and the accelerated transformation of development modes. China’s economy has maintained a fast growth rate for nearly 30 years, which to a certain extent has relied on resource expenditure and the export of primary products as well as a high energy consuming industry structure in which the heavy chemical industry accounts for the main part. Since the “9th Five-year” Plan, China has called for the transformation of the mode of economic growth. The “10th Five-year” Plan highlights the strategic adjustment of the economic structure. The Report to the 17th National Congress of CPC highlights that the key to achieving the target of future economic growth is to make big progress in accelerating the transformation of the mode of economic growth and improving the socialist market economy. Although some achievements have been made in recent years, the extensive growth mode has not yet been fundamentally changed. The main reason is that the “three carriages” of investment, foreign trade and consumption on which China’s economic growth relies on have been unbalanced on a long-term basis. China’s economy relies too heavily on foreign trade. Domestic demand is weak in driving on the economy and enterprises lack the impetus for product innovation. Since 2009, China has launched a package of policies to stimulate consumption and a series of measures to accelerate the reform of the health system and the social security system, which have played an active role in stimulating economic growth and benefiting the people. These policies and measures will surely provide chances to promote the growth of domestic demand and change the unbalance in the “three carriages”. Meanwhile, the financial crisis has also provided China’s enterprises with the power for technical innovation. For a long time, China’s enterprises profited from cheap resources, cheap labors and low environmental costs to a large extent. This enabled their products to gain the competitive edge in the international market at cheap prices. The impact of the financial crisis and the increasingly enhanced environmental awareness of consumers have caused the market environment of enterprises to change a great deal, putting unprecedented pressure on foreign trade enterprises. It has been proven that those enterprises with a high technological level have stronger resistance to the financial crisis, expressing their obvious market advantages. So, we must encourage enterprises to continuously enhance innovation, accelerate the transformation and application of results, and speed-up product and industry upgrading.
Second, the new technological revolution caused by the financial crisis presents opportunities for China to develop new strategic industries. A financial crisis usually brings about a new technological revolution. The countries of the world are speeding up and promoting a new technological revolution represented by green and low-carbon technologies. Important breakthroughs and innovation in science and technology will restore and improve their economies. We should make full use of the new chances brought by the new technological revolution, speed up the technical reconstruction of traditional industries and promote industrial upgrading; we should support and develop new strategic industries like new energies, new materials, bio-technology, electric automobiles, energy conservation and environmental protection and advanced manufacturing, so as to provide new avenues of growth for the economy and instill new energy to sustainable development. If we take the competitive edge in technological innovation, occupy the key points during the development of new strategic industries and thus lead the orientation of global development, then we can not only effectively expand the markets of products with independent intellectual property rights, but also effectively improve the utilization ratio of domestic energy sources and optimize the consumption structure, thus further improving our capacity for sustainable development.
II. Utilize the results of economic growth and current favorable conditions to solve resource and environmental problems hindering sustainable development
China’s GDP exceeded RMB 30 trillion in 2008, climbing up to the third place in the world. In the past 30 years, incomes have multiplied several times over. People’s living standards have increased significantly and the nation’s financial power has increased considerably. However, the ecological environment is still under a great deal of pressure. The resource environment has become an obstacle that is restraining the sustainable development of China’s economy and society.
The efficiency of China’s processing, transformation, storage and terminal utilization of energy sources per unit of GDP is significantly lower than that of developed countries. China’s petroleum consumption per unit of production value is 4.3 times of Japan, 2.4 times of U.S. and 1.5 times of Korea. The average energy consumption per unit of product in the eight high consumption industries including electricity, iron, non-ferrous metal, petroleum, chemical industry, light industry and weaving is 47% higher than the level of developed countries. The amount of energy consumption of these eight industries accounts for 73% of the total consumption of industrial sectors. Therefore, China’s industrial sectors use about 230 million more tones of standard coal every year.
Although China has made great efforts, the country’s ecological and environmental problems are still severe, and the overall situation of resource depletion and environmental pollution have yet to be fundamentally resolved due to its large population, years of extensive development, backward environmental protection technologies, insufficient investment and historical problems. If these problems are not properly resolved, they will worsen in terms of type, scale, structure and nature.
In fact, China’s development over the last 60 years is the equivalent to 200 years or longer of development in western countries. The problems and challenges have emerged within a short period of time. To solve these problems, we should not only prepare to make more efforts than developed countries, but also create conditions and seize the right opportunities. These problems are all an inevitable part of development, and require further development to solve. In view of the current situation, the conditions are now in place for the resolution of these problems.
First, environmental problems are a concern of both governments and the people. The increasing calls for the protection of the resource environment from among the people give us impetus and a favorable public atmosphere for the resolution of these problems.
Second, China has enough financial power to resolve these problems. China's financial revenue in 2008 exceeded RMB 6.1 trillion. At the beginning of the 1980s, China invested RMB 2.5-3 billion in environmental protection and control every year, accounting for 0.51% of the GDP; in 2008, the total amount invested in environmental protection and control was RMB 449.03 billion, accounting for 1.49% of the GDP.
Third, the government has launched a package of policies and measures to promote the adjustment of industrial and economic structures, speed-up the transformation of growth modes, and expand efforts in energy conservation and emissions reduction. Gradual implementation of these policies and measures will not only improve the quality and efficiency of China’s economy, but also create a favorable policy environment to enhance the ratio of resource utilization and solve ecological and environmental problems.
Fourth, advances in science and technology have provided the means to solve these problems. Since the “11th Five-year” Plan, the Ministry of Science and Technology has provided unprecedented support to the development of new energy sources and ecological and environmental protection. Meanwhile, local governments and enterprises have increased their investments in environmental protection technologies.
III. Counter global climate change in a scientific way and seize opportunities for development of a global low-carbon economy
China is one of the nations prone to suffer adversely from climate change. Global climate change has threatened China’s natural ecological system and the development of its economy and society. Research shows that if proper measures are not taken by 2030, the productivity of China’s farm production might fall 5%-10%, which will have an adverse effect on food security. Major projects like the Three Gorges Dam, the Qinghai-Tibet Railway and the South-to-North Water Transfers will be potentially threatened by climate change.
The world is establishing an international system framework and rules to confront climate change problems, developing towards “quantized target, detailed rules and hardened constraints”. At the G8 Summit held in Italy in July 2009, the leaders of eight countries issued a statement on greenhouse gas emission reduction. The emission reduction standards in this statement are fuzzy and the responsibilities and obligations are unclear. At the Copenhagen Climate Conference 2009, quantizing long-term emissions reductions was still one of the focuses. Once the global long-term targets on emissions reduction are set, China’s medium and long-term development and sustainable development will be subject to major challenges.
China is now undergoing a phase of rapid industrialization and urbanization. Within a long period of time, China's utilization of energy resources will continue to grow. In addition, China’s coal-oriented energy structure, high energy consumption-oriented industrial structure and its role as the “world’s factory” have further increased the difficulty of carbon emissions reduction. Moreover, many developed countries adopt trade protectionism in the name of combating climate change. They restrain exports of products made in China by including additional energy efficiency and environmental protection terms in bilateral trade negotiations. This also puts huge pressure on China’s development mode as an export-oriented economy.
The focus of internal and foreign affairs on global climate change seems to be an issue of the energy environment, but is actually a question of development. Only by persisting in sustainable development can we solve the problem of climate change. In order to counter global climate change, China has announced targets to reduce the emission of CO2 per unit of GDP in 2020 by 40%-45% compared with levels from 2005. The percentage of non-fossil energy in primary energy consumption will reach about 15%, forest area will be increased by 40 million hectares and forest reserves will increase by 1.3 billion cubic meters in comparison to 2005. This is an independent action proposed by China in accordance with its national situation and the goal of sustainable development. It is also a significant contribution to efforts aiming to curb global climate change. To attain these targets, China should further enhance efforts in energy conservation and emissions reduction, seize the global trend of low-carbon economies and capitalize on historic opportunities in low-carbon development. 
After the international financial crisis broke out, developed countries have successively adopted low-carbon as an important means of stimulating economic recovery, dealing with climate change and guaranteeing the competitive edge in the future. Low-carbon technology-oriented technological competition has begun. China has the potential to develop a low-carbon economy: (1) low energy utilization ratio, with a large potential to increase energy efficiency and conservation. The energy utilization ratio of China is about 33%, roughly 10% lower than developed countries. (2) China’s present energy structure is “coal-oriented”, and its abundant regenerative energy sources like water energy, biomass energy, wind energy and solar energy have not been well developed and utilized, so it has the potential to optimize its energy structure. (3) The proportion of high energy consumption and high pollution industries is high in the industrial structure, meaning significant potential for the adjustment of its industrial structure. (4) The present forest coverage rate is low, and there are broad prospects for forest development and significant potential for carbon sequestration. (5) With the addition of technological investments and increasing independent innovation capacity, China has the potential to support emissions reduction and new energy development by means of technology. (6) The proportion of energy consumed in people’s lives is large, with large potential to modify the mode of consumption. In accordance with the actual national situation and characteristics, we should establish a low-carbon technological system through great efforts, plan the development of various low-carbon technologies as a whole, try to take the leading position in new economic competition and promote the sustainable development of China’s economy and society. (Source: Realistic Theory Web)