Abstract
This work analyses the parallel development of Chinas technological capabilities and market shares in environmental products. In China the environmental legislation has increasingly supported environmental protection in terms of conservation of natural and energy resources, eco-innovation and use of renewable energy sources. During the last decade attention to environmental issues has been accompanied by the development of technological skills in the field of environmental protection: Chinese patent applications filed under the Patent Cooperation Treaty are increasingly frequent, in particular in renewable energy technologies, although their number is still limited compared with those of technological leaders such as the US, Japan and Germany. In parallel, China has captured a rapidly expanding share of the international environmental goods market. According to the UNCTAD Comtrade database, China is now a leading exporter of such goods. To some extent, these results stem from the decisions of Western multinationals to locate their production in China in order to benefit from low production costs. However, part of Chinas success in environmental goods is ascribable to the accretion of relevant skills, a development that may have benefited by the evolution of environmental legislation and policy in China.
This paper is part of a more comprehensive document on Chinese environmental policy and performances (Foresti et al. 2011) prepared for the workshop “The Chinese Economy”, jointly organized by Bank of Italy, Fondazione Masi, the Department of Economics of Ca’ Foscari University of Venice and the Venice International University, held in Venice on November 25–27 2010. The authors wish to thank Silvia Guizzo, Gianluca Salsecci, Fabrizio Guelpa and the participants in “The Chinese Economy” workshop for their suggestions and comments. They also thank Confindustria Federation ANIE for assistance in identifying product codes. The authors alone are responsible for any errors or inaccuracies and their opinions do not necessarily reflect those of Intesa Sanpaolo.
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- 1.
There are several variants of this analysis depending on the number of life stages considered, for instance cradle-to-grave or cradle-to-gate, i.e. excluding shipping and distribution costs. Other analyses are specifically dedicated to single aspects, most notably energy related.
- 2.
The classification adopted is the one laid out in the UNCTAD Handbook of Statistics (2005). The manufacturing emerging countries are: Brazil, China, India, Hong Kong, Taiwan, Korea, Malaysia, Mexico, the Philippines, Singapore, Thailand and Turkey. Russia is included among CIS countries, together with Central European and South Eastern European countries (Albania, former Yugoslavia, Croatia, Bulgaria, Romania and Ukraine), and Central Asian countries. The main oil producer include countries of the Arab Gulf, Africa (Congo, Angola and Nigeria), the South Mediterranean Rim (Libya and Algeria), Asia (Indonesia and Brunei), and Latin America (Venezuela).
- 3.
The revealed symmetric comparative advantage (RSCA) index is a modification, to make it symmetric, of the most widespread revealed comparative advantage index, the Balassa Index, which is the ratio of the market share of specific good i held by country j to the share held by country j in all categories of goods. Formally:
RSCA = (RCA−1)/(RCA + 1) where RCA = (Xij/Xi)(Xj/X)
Where i is the good, j the country, and X is exports.
- 4.
The normalised trade balance is the ratio of the trade balance (exports minus imports) to total trade flows (exports plus imports). Its range is normalised between −1 and 1.
- 5.
For some strategic products, such as wind turbines, there was a “local content” requirement of at least 70%. The requirement was dropped in 2010 as no longer necessary, since virtually all turbine installations were Chinese-produced products.
- 6.
Among recent announcements, in October 2010 General Electric and Vestas decided to open or expand their R&D centres in China.
- 7.
Martinot and Junfeng (2010).
- 8.
In its statistics, always included in the UNCTAD database, India does not report such significant imports of environmental goods from China, which are probably included in the “other countries” item.
- 9.
The Herfindhal concentration index is the sum of the squared shares of single countries.
- 10.
Until the end of the 1990s the number of PCT patents may underestimate the real technological potential of some countries, such as Japan, due to their delay in beginning to use the PCT procedure. However, since the early 2000s most countries are well represented, including Japan and South Korea (OECD 2009b). This is why the developments described in this section refer to PCT patents applications after 2002.
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Foresti, G., Trenti, S. (2012). Environmental Goods Trade and Technology in China. In: Gomel, G., Marconi, D., Musu, I., Quintieri, B. (eds) The Chinese Economy. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-28638-4_10
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