The 'greening' of the Belt and Road

China should focus on sustainable, inclusive development in regions participating in the initiative

Since the Belt and Road Initiative was announced by the Chinese leadership five years ago, there have been two types of reactions: Some developing countries in the Belt and Road region welcome the initiative, seeing it as an opportunity to address the huge gap in economic and social infrastructure in their countries with much-needed foreign direct investment. On the other hand, some developed countries are worried that China's initiative may do more harm than good for the countries in the Belt and Road region and the world.

Concerns of the developed countries can be summarized in two categories: First, there is concern that China is trying to use the Belt and Road window of opportunity to export its model of governance to the developing countries and will therefore gain a competitive advantage in reshaping global governance. Second, Chinese companies need to pay more attention to greenhouse gas emission reductions, environmental protection and the welfare of host communities and try to avoid worsening the lot of the people and jeopardizing the global fight against climate change.

I give credit to the second but do not sympathize with the first. I believe that model of governance is embedded in a country's history and institutions, geopolitical circumstances and stages of economic development, and it is not a black or white matter that should be based on value judgment. What works in one country does not always work in another, and some of the so-called universal values can only be defined according to local circumstances.

There is no need to worry that China's political system will be transplanted to developing countries participating in the Belt and Road. The local people will be able to tell what works for them and what doesn't. Furthermore, history will not end with any type of political system, because it will evolve as a country climbs the development ladder and when the composition of a society changes. What really matters to the people is to ensure that the development path taken by the countries participating in the Belt and Road is sustainable and inclusive, which means that the infrastructure and manufacturing plants built from now on should be climate resilient, environmentally benign and community-friendly.

How do we ensure sustainability and inclusiveness in the Belt and Road region? A little over a year ago, the World Resources Institute published an article called Four Ways China's Belt and Road Initiative Could Support Sustainable Infrastructure, which listed four things that China should be urged to do. First, it should promote sustainable development abroad by drawing on its own experience. Second, it should help other Belt and Road countries make their financial systems green. Third, it should ensure that new infrastructure that it finances in the region is low-carbon and climate-resilient. Finally, it should ensure that investments in Belt and Road countries comply with high environmental, social and governance standards.

With trillions invested in carbon-reduction projects in China over the past decade and a green financial system in good development in the past four years, China has clearly made itself a leader on climate change and green finance. However, China needs to do more with the third and fourth actions.

During the Belt and Road Forum for International Cooperation in May last year, the Chinese government released two documents - The Belt and Road Ecological and Environmental Cooperation Plan and Guidance on Promoting Green Belt and Road - to guide its ministries and corporations. This demonstrates that the Chinese government realized that "greening" the Belt and Road Initiative is an imperative. After the forum, the Ministry of Environmental Protection (now known as the Ministry of Ecology and Environment) set up a multilateral platform called the International Alliance for Green Development in the Belt and Road. This platform is open to multilateral organizations, government departments, corporations and think tanks from around the world, and has a mission to share good practices and provide policy solutions for sustainable development.

On the front of green finance, the Center for Finance and Development at Tsinghua University and the Sustainable Banking Network of the International Finance Corp jointly set up a Global Green Finance Leadership Program. This program aims to build capacity in green financial system design, green financial instruments development and project business model innovation in the Belt and Road regions. In the meantime, the China Green Finance Committee is working with British and US institutions to develop green investment principles for the Belt and Road. Once completed, it will be a set of voluntary principles to guide financial institutions and corporations in adopting sustainable finance and integrating environmental, social and governance standards into their investment and operation activities in the Belt and Road regions.

Going back to the concerns noted at the beginning, I would argue that China will do a great deal of good for the world if it makes a considerable contribution to sustainable and inclusive development in the Belt and Road regions.

The author is a visiting fellow at the Center for Finance and Development of Tsinghua University's National Institute of Financial Research. The views do not necessarily reflect those of China Daily.