Thank you, Minister Zhu, and dear friends and colleagues, the theme for this year’s Annual General Meeting is Xiaokang and Scientific Development. Scientific development to me means let the facts speak. European version of scientific development is evidence-based policies. That is, policies should be based on the best available scientific evidence. With this in mind, I will like to highlight 5 evidence-based facts.
Fact No.1: China’s economic growth exceeds expectations. If there is one China today, there will be some three Chinas in the year 2020. I heard yesterday that every other building that will be built in the world during the next 15 years will be built in China. Pressures on natural resources will be enormous in China, and the total pressure on the global resources will be enormous as well, when the demands from all developed and developing countries are added.
Fact No. 2: the environmental improvement continues to lag behind economic growth in China. The implementation gap is widening as Premier Wen Jiabao stated this morning. The quality of the environmental institutions has to be improved. They have to be integrated with other sectors of the economy. Measures have to be synchronized so that the already existing best available technologies in fact are introduced on a necessary scale. And we still do not know whether the gap will be closed.
Fact No. 3: China has a huge potential for technological innovation. The quantity and quality of China’s academic research is increasing rapidly, and so it’s the sophistication of China’s industry. There is no reason why China’s companies will not participate in this race for environmental technologies.
Fact No. 4: the quality of environmental institutions is key to the innovation in the environment area. Let me take one example. Japan was an early-mover in fluid gas desulphurization. Japan organized its institutions so as to push technological innovations in the late 1960’s. Germany hesitated for a number of political and economic reasons. When the Germany changed its mind in the early 1980’s, Japan had hundred times as many plants inauguration. Japan won technological game hands done. The present structure and quality of China’s environmental institutions need to be improved in order to pressure for technological innovation. The institutions are not strong enough to drive through the already existing best available technologies. Take just one example, which was mentioned this morning. The pollution fees are so low that it’s cheaper to continue to pollute than to upgrade equipment. This is detrimental for the environment, for the technological innovation, and for the competitiveness of companies that do adhere to high standards. The result is uneven playing fee of competition. Max Planck, the German physicist and Nobel Prize winner, said some hundred years ago, “Science progresses funeral by funeral.” Something similar could be said about institutions. They change slowly unless there is outside pressure.
Fact No. 5: the next 10 to 15 years will be very important for Xiaokang in China, and indeed, for the world. The Stern Report Commission by the British Government stated clearly that the world economy has some 10 to 15 years, during which to start the transition, or the transformation, to low carbon intensity economy, some 50 years ahead. The longer this transition is delayed, the higher the risks that global climate will enter catastrophic changes. The cost to the world and to China could then be very high. The impact of climate change on the Tibetan Plateau would have major implications for Asian rivers. This is the perspective against which the “Three Transformations” stated by the State Council and Premier Wen Jiabao, this morning should be seen. They are necessary in order to, first, close the implementation gap and introduce the already existing best available technologies on a large scale; second, to increase the pressure for technological innovations within China; and third, to prepare for the transition into low carbon economy.
Let me emphasize, the market for advanced environmental technologies, in particular, low carbon technologies, will be very large in the future. Companies and countries that capitalize early on this inside will gain market shares. This will be a natural focus for the 4th Phase of the China Council. At this Annual General Meeting, we should concentrate on recommendations to really on how to implement the “Three Transformations”. We should do this with the challenges clearly in mind, as I understand it, the “Three Transformations” go to the heart of the relationship between the state and the market, which will give clear, concrete and candid advice on how to carry out the “Three Transformations”.
Thank you!
