Re-think on China's New Role in Global Economy

Posted on 25 April 2007

Beijing, China - With rapid growth of Chinese outward investment, the world needs to re-think its current global economic patterns that will result in the depletion of many of the world's natural resources, and adopt a new model that aims towards global sustainability instead, says WWF.

In its "Re-think China's Outward Investment Flows" report released on April 25, WWF, the global conservation organisation, reveals that the main economic driver behind China's growing outward investment is the country's need to acquire natural resources to supply products to developed nations such as the United States and the European Union, and build economic welfare at home through a Western development model.

"The current unsustainable consumption patterns in developed countries are spreading to other parts of the world, thereby triggering a global hunt for natural resources and causing the environmental ecosystem to collapse. Intensified by the current economic growth in China, India and other emerging economies, this trend requires a re-think of how to achieve global sustainability," said Li Lin, Head of Conservation Strategies of WWF China.

China's investments occurring at present are to a large extent driven by a Western industrial development model. "Oil, iron ore, timber, cotton and soy, are just a few examples in the report that show that both Chinese import demand and outward investment will multiply in the years to come," said Dennis Pamlin, WWF International's Global Policy Advisor and co-author of the report.

"This is not an issue that can be dealt with on an ad-hoc basis, but urges us to find new production and consumption patterns. Otherwise we could see a conflict over natural resources in the coming years," he warned.

According to Pamlin, most natural resources imported to China are re-exported in the form of value-added items or products ready for consumption in other countries. For example, it is often said that China poses a threat to tropical forests by importing timber from Southeast Asian countries, but the fact is that 70 per cent of the timber is made into furniture that is exported to the United States and EU countries. European and North American consumers are still responsible for the destruction of the ecosystem around the world, but now it is via Chinese produced goods.

The world needs to depart from its current linear model of economic development that ignores the inconvenient truth that the Earth"s natural resources are finite, and change into a resource-efficient global "circular economy." The report recommends a "triangular approach" in both global diplomacy as well as trade and investment policy-making that categorises countries and regions into three groups: providers of natural resources; producers or manufacturers of products and services; and consumers within the global trading system.

"The current Chinese infrastructure and investment patterns being developed and implemented present a window of opportunity to put in place a structure that ensures that both government and business policies in China support long-term sustainable development around the world," Li said.

Full report is available at

For further information, please contact:

Chris Chaplin, Communications Officer, WWF-China

+86 10 6511 6237