The Flanders-China Chamber of Commerce, the EU SME Centre and EUROCHAMBRES organized a webinar on the topic of “Breaking into the Chinese green construction sector” on 25 February 2021. 

Ms Gwenn Sonck, Executive Director of the Flanders-China Chamber of Commerce and the EU-China Business Association, welcomed the participants and introduced the topic. The Chinese construction sector is one of the largest in the world and is expected to continue growing at an annual average of 5% until 2023. The Chinese government is making green building a top priority by promoting more energy efficient buildings. Therefore there is great potential for European SMEs. By 2030, two-thirds of the Chinese population is going to live in urban areas and Chinese authorities are already planning to build 60,000 new multi-floor residential buildings and 117 new mass transit rail and underground projects. The Comprehensive Agreement on Investment (CAI) agreed in principle by the EU and China grants European investors a greater level of access to the Chinese market and will level the playing field for European businesses in China, a market which cannot be ignored. 

Mr Gianluca Ghiara, Managing Director, Geapower Consulting Co, is normally living in Beijing but is now staying in Rome due to Covid-19. He is an independent consultant active in the Chinese green-tech sector for more than 15 years and holds an MBA from Peking University.  The Chinese green construction sector is extremely important. About 15 years ago the building sector was not modern, and China started to renew the sector, which will continue to grow for at least 10 to 15 years. All municipalities in China are pushing the construction sector in different ways. In a centralized country like China, the central government plays an important role and provides the direction for municipalities and local governments. Related to the construction sector, the three most important ministries are the National Development and Reform Commission (NDRC), the Ministry of Housing and Urban-Rural Development (MoHURD) and the Ministry of Ecology and Environment (MEE). The role of municipalities is still very important in developing green construction projects, including areas such as the water supply, solid waste management and energy generation. In the last 10 years the government has been transforming the construction sector into a green construction sector, as it wanted to control pollution and support the renewal of local industries. Chinese people are now more conscious about living in beautiful, green and sustainable cities. 

There are new laws and regulations in all areas of the green building sector, such as in design, construction and operations. MoHURD introduced the “New Assessment Standard for Green Building”. In the past, cities were not well-planned, causing many problems in terms of energy efficiency, traffic control, water and waste management etc. Another important regulation is the “Green Building Evaluation Standard”, approved in January 2015, and subsequently amended. China wanted to upgrade to the level of Europe and the U.S. China’s ”three star system” is very similar to the LEED system in the U.S. The evaluation system has two different standards: one for residential buildings and one for public buildings, covering six categories. Three stars means green buildings. The system is a way for the central government to push municipalities and developers to focus on good quality buildings. The legislation created a “green wave” in the construction sector and a bottom-up approach. Now the whole country is involved in the modernization. 

Over the past 20 years, China has promoted the development of eco-cities, which are in fact districts in some cities. The government wanted to control CO₂ emissions in cities and create some areas where the best technologies could be developed and only certain companies and buildings are allowed. New eco-city projects that have gained international attention include the Sino-UK Dongtan Eco-City in Shanghai, Caofeidian International Eco-City in Tangshan, Sino-Swedish Wuxi Low Carbon Eco-City, Sino-Finland Mentougou Eco-Valley in Beijing, and the Sino-Singapore Tianjin Eco-City. These offer opportunities for European companies to partner with Chinese companies in their development. They present positive competition between different cities and have been developed through bilateral cooperation projects. Being involved in these eco-cities can offer a good entry to the Chinese market. 

Another important element is the Chinese green municipal finance. The level of local finance is very different from national finance. Most taxes are not kept locally, but are controlled centrally. Municipalities don’t have much financial power and the level of municipal debt is high. The central government obliges the municipalities to develop projects that are sustainable, also from a financial point of view. Municipalities were selling land and asking banks for loans. This can’t be done anymore. The prices of apartments in China are skyrocketing and the central government want to limit the rise. Municipalities are no longer allowed to ask for finance which is not sustainable. In the past, municipalities only had to look at the financing side: think about the project and look for money. Now they also have to focus on the funding. The project has to be sustainable in terms of “green” and “finance”. Screening of green projects is very strict. Municipalities have to be able to finance them, because there is no longer any financial support from the central government. Developers are looking for foreign companies to partner with Chinese companies that don’t have enough experience. In the field of laws and regulations, much still needs to be done. Some are too strict, making them difficult to follow, and some too vague, giving too much room to local developers. 

China set out clear goals to develop green building:

• The energy efficiency of newly constructed buildings in urban areas must be improved by 20% compared to the year 2015
• Th share of newly constructed green buildings in urban areas shall be increased to 50%
• The newly constructed green building space nationwide is expected to reach 2 billion sq m
• The retrofitting of existing public buildings for energy efficiency covering 100 million sq m and existing residential buildings covering over 500 million sq m to be completed

It is evident that China represents a good opportunity for European SMEs. At least 10% to 15% of the overall investment in the Chinese green construction sector is expected to go to foreign companies. There is a need for stable technology and Chinese companies are looking to upgrade their systems and follow the green wave started by the Chinese government. The Chinese market is profitable but very diversified, so you need to do your homework. Chinese companies have learned to appreciate the role of European SMEs, presenting a good opportunity. But a good business strategy is essential and you need to determine according to your technology which cities you want to enter. Your technology needs to be localized, you can’t simply replicate what you do in Europe. 

Ms Ma Jingjing, Senior Low Carbon Urban Planner, NORDIQ Group China, has over 17 years of professional experience in climate change and related topics and holds an MBA from Peking University and a Master’s degree from the Technical University of Denmark. China’s climate targets for 2030/2060 have been announced in September 2020: before 2030, achieve peaking of carbon dioxide emissions and before 2060, achieve carbon neutrality.  More specifically, by 2030:

• Lower carbon dioxide emissions per unit of GDP by over 65% from the 2005 level
• Increase the share of non-fossil fuels in the primary energy consumption to around 25%
• Increase the forest stock volume by 6 billion cubic meters from the 2005 level
• Increase the total installed capacity of wind and solar power to over 1.2 billion kilowatts

The 14^th Five Year Plan (2021-25) and 2035 targets have been announced as well as the climate strategy until 2030 and 2060. The Ministry of Ecology and Environment (MEE) has taken over the climate strategy from the National Development and Reform Commission (NDRC). The National Energy Administration (NEA) has called for public comments on the renewable energy plan and laid out the seven priority areas. The part of non-fossil fuels in China’s energy structure has been increasing in the past 10 years. Achieving the 1.5°C target will require an additional investment of about CNY138 trillion, or about 2.5% of GDP per year. To achieve the “Europe Green Deal” targets with reduced emissions by 50% to 55% by 2030 will need an annual investment of €260 billion or about 1.5% of GDP in 2018. In the Chinese building and construction sector, the use of electricity and natural gas has been increasing. By 2020, the national target for the total building area with ultra-low energy consumption has exceeded 11 million sq m.

Concluding her presentation, Ms Ma Jingjing described three case studies: the Hubei 50MW biomass CHP project, the Datong zero carbon project and the green industrial park in Changsha, Hunan province.

Q&A: How sensitive is the Chinese population regarding green cities? Do they take it into account when moving to a city? Ms Ma: First university graduates will consider if they could get a good job with a high salary, but the green factor, mobility and housing are also taken into account. Mr Ghiara: Sometimes it’s a matter of choosing where to live in a city. People are frustrated by traffic and heavy pollution and will try to find new, good quality districts. Does the government also give incentives for factory construction like for residential buildings? Mr Ghiara: Yes, seveal industries receive incentives to upgrade their systems and machinery in terms of the use of electricity and water, but it depends on the kinds of industry. 

The above is a summary of the webinar, which lasted around one hour and forty minutes. The webinar can be viewed on the Youtube channel of the EU SME Centre: Part 1 and Part 2.

As the numbers of Covid-19 cases across the globe have dropped for a fifth consecutive week in 2021, Chinese scientists said the pandemic was possibly “tapering-off”, which would allow for the relaxation of global travel restrictions as early as April this year. Yet they warned a new virus variant prevailing in Europe and the U.S. and uneven vaccine distribution may drag down the global effort in battling the pandemic. They pointed out that implementation of stronger public health measures, stricter adherence to the rules out of fear of faster-spreading variants, and the natural seasonality of coronavirus have all played a constructive part in the recent decline. “Based on the current pace, most wealthy countries and countries with frequent people exchanges will realize mass inoculation by April or May this year, and would pave the way for international travel,” said a Beijing-based immunologist. Many Western countries, such as the U.S. and the UK, are placing all their hopes on the vaccines, and encouraging their people to get vaccinated, the Global Times reports.

Chinese customs have tested 1.49 million samples of cold-chain imports, and 79 of them had returned positive for the coronavirus, the General Administration of Customs (GAC) said, while 56 foreign manufacturers involved in shipping contaminated food products to China have been suspended from filing import applications for one to four weeks, as a preventive measure. “We have suspended imports of 129 suppliers from 21 countries where employees had been infected with the virus. Among them, 110 companies voluntarily halted exports to China,” GAC said.

A source at China’s leading vaccine producer Sinovac said that preliminary results its vaccine can neutralize the variants detected in the UK and South Africa, though a detailed report by scientists has not yet been published. Another Chinese vaccine producer – Sinopharm – also said in January that its vaccine is also effective against the variants. The immunologist said that although the new variants raise concerns, the decline in cases offers an opportunity to prepare for the months ahead. “The drop offers space for us to double down on those effective measures, such as speeding up vaccine inoculation, social distancing and basic hygiene measures, and prepare for any possible comeback,” he said.

China has already approved four vaccines for conditional market use.  An inactivated vaccine developed by the Beijing Biological Products Institute under Sinopharm’s subsidiary, China National Biotec Group (CNBG), was China’s first Covid-19 vaccine to receive conditional approval for the domestic market on December 31, 2020. It was followed by CoronaVac, developed by Chinese pharmaceutical firm Sinovac Biotech. A second vaccine produced by Sinopharm at its Wuhan Institute  also received approval. Besides those three inactivated vaccines, CanSino’s vaccine is China’s first Ad5-nCoV  vaccine. It is a recombinant adenovirus vector vaccine jointly developed by CanSino Biologics and researchers from the Institute of Military Medicine under the Academy of Military Sciences led by General Chen Wei. This vaccine only requires one dose. 

Chinese syringe and needle suppliers are expanding production after orders continue to increase worldwide, and the U.S. ramps up its Covid-19 vaccinations. Around 80% of the needles and syringes in use in the U.S. originate from China. The pressing demand has driven up the prices of raw materials, including plastics and steel, which are ultimately reflected in the market prices of syringes. Currently, the price of a syringe has increased from CNY0.1 per unit to CNY0.3, while prices in the U.S. are even higher at CNY0.5 to CNY0.8, increasing by 800%, because suppliers with FDA markings are very limited, an industry insider told the Global Times. Despite the rocketing prices, the cost for a syringe that is made in China is still lower than one in the U.S., as in addition to the low labor cost and adequate supply chain, mass production has reduced costs.

Health experts believe an uneven vaccine rollout will  undermine global efforts to contain the virus. People from 130 countries are still waiting for vaccines, while wealthy nations are receiving doses from multiple vaccine makers. According to UN Secretary General Antonio Guterres just 10 countries had administered 75% of all vaccinations. China has promised to offer vaccine assistance to 53 developing countries, and has sent its vaccines to 22 countries.

Direct flights between China and France have been cut after French authorities said that two flights by Chinese carriers were cancelled. Flight MU570 of Chinese Eastern Airlines, originally scheduled to fly from Paris to Shanghai on February 28, and flight CZ348 of China Southern Airlines from Paris to Guangzhou on March 4, were canceled by France’s aviation authorities. It was the fourth cancelled flight for Chinese carriers since February 17. The move came after China canceled an Air France flight for two weeks after seven passengers were found to be infected with Covid-19 when they arrived in China.

Chinese health experts believe the EU’s plan to issue digital vaccine travel certificates or passports is not feasible scientifically at a time when new variants emerge and raise doubts about the efficacy of vaccines. They warn that issuing the vaccine passports may trigger a new wave of the pandemic in Europe. However, experts add that the idea may be feasible in the long run, and a globally recognized vaccine certificate should be established under the framework of the World Health Organization (WHO) and could be introduced for international events such as the Beijing Winter Olympics in 2022. A Beijing-based immunologist who requested anonymity told the Global Times that vaccine passports could provide convenience for travel, but so far it is a purely political move to promote vaccinations and economic recovery. As the WHO has predicted that vaccines in some developing countries, especially those in Africa, would only be available by 2023, the vaccine passports in the EU would block travel from developing countries, which is unfair and discriminatory, the immunologist added.

This overview is based on reporting by the China Daily, Shanghai Daily and Global Times.

A new maglev train could cut travel time between Shanghai and Guangzhou to 2½ hours. The project is included in Guangzhou’s masterplan for 2020 and 2035. The Department of Natural Resources of Guangdong province has publicized the blueprint on its official website to solicit public opinions through March 11. The plan was released along with another planned maglev line linking Beijing, Guangzhou, Hong Kong and Macao. The traveling time between Beijing and Guangzhou will also be shortened to about three hours and 20 minutes, half the time the Beijing-Guangzhou High-Speed Railway takes.

Shanghai has China’s first commercial maglev service, a 30 kilometer track linking Pudong International Airport with a metro stop in Pudong. The system, based on German maglev technology, can reach a top speed of just over 400 km per hour. China’s first medium-and-low speed maglev line with a design speed of 100 km per hour started operation in 2016 in Changsha, Hunan Province, the Shanghai Daily reports. 

Shanghai plans to transform the Hongqiao area and neighboring locations into an international hub to further promote the integration and opening up of the Yangtze River Delta. The planned Hongqiao international hub will include the 151-square kilometer Hongqiao Central Business District located in the west of Shanghai and two extended strips – one going northward to Suzhou, Jiangsu  province, and the other going southward to Haining, Zhejiang province. Hongqiao already has one of the country’s busiest international airports and a high-speed railway station. According to the plan, the area will be fully constructed by 2035. The plan aims to form a greater metropolitan city cluster around Shanghai that will further the delta’s integration with the world economy. The plan includes favorable policies such as facilitating foreign entrepreneurship, international trade and finance, and accelerating the construction and upgrading of regional railway networks and international transportation infrastructure. Many intercity rail lines and highways will be built to create a two-hour transportation circle between the Hongqiao Central Business District and major neighboring cities. The current Hongqiao transportation hub, which brings together high-speed rail, an airport and local metro lines, handles 400 million passengers a year.

Guangzhou, capital of Guangdong province, is promoting the construction of a global transportation hub by increasing investment in the building or expansion of its airport, ports, high-speed  railway lines and expressways. It will also enhance connectivity with Hong Kong and Macao and other major cities in the Guangdong-Hong Kong-Macao Greater Bay Area to speed up construction of a world-class Bay Area, said Zhou Qingfeng, Deputy Director of Guangzhou’s Development and Reform commission. “As a national core city, Guangzhou will be able to play a  leading role in coordinating and promoting the planning and construction of an advanced intercity railway network in the Greater Bay Area in the following years,” Zhou said. Guangzhou is planning to build a high-speed railway line  linking Guangzhou South Railway Station and Guangzhou Railway Station that will reduce the time it takes to travel from its downtown area to Hong Kong to one hour. Guangzhou will also build a railway link with Macao. “Guangzhou plans to construct 15 intercity railway projects with a total investment of CNY398.3 billion to help connect Guangzhou with major cities in the Greater Bay Area,” Zhou said, as reported by the China Daily.

Guangzhou Baiyun International Airport, the world’s busiest passenger airport last year, started its third-phase expansion project, including construction of a new terminal and two runways, late last year. The airport, which now operates more than 230 international flight routes, will have three terminals and five runways, allowing it to handle more than 140 million passengers a year once the expansion project is completed. Despite the Covid-19 pandemic, the Guangzhou airport handled 43.8 million passengers last year. 

Yuan Yue, Deputy Director of Guangzhou Port, said it now operates more than 210 international container ocean routes and will complete the fourth-phase expansion of Nansha Port, located at the mouth of the Pearl River, this year. Guangzhou Port handled more than 56.7 million metric tons of cargo last month, a year-on-year increase of 19.3% and a record high for a single month. Its cargo throughput reached 636 million metric tons last year, ranking fourth in the world, while its container throughput was 23.5 million TEU, fifth in the world. Guangzhou’s transport department and metro company have also promised to expand and improve the city’s expressways and subway network to support its ambition to become an international transportation hub. 

The Chinese government also issued a plan to upgrade the country’s transport network by 2035, when there are expected to be about 200,000 km of railways, 460,000 km of highways and 25,000 km of high-grade waterways, with 27 major coastal ports, 36 major inland ports, about 400 civil airports and about 80 postal express delivery hubs.

The growth rate of China’s sharing economy sector is expected to be between 10% and 15% this year, and maintain an average annual growth rate of over 10% in the coming five years, thanks to an expected strong recovery in the macro-economy, according to a report by the State Information Center (SIC). In 2020, amid challenges brought by Covid-19, new business modes featuring the sharing economy demonstrated tremendous resilience and development potential. The trade volume of the sharing economy for the year surged 2.9% year-on-year to CNY3.38 trillion. The pandemic’s influence on different areas of the sharing economy varied. The market volume of the sharing healthcare sector grew rapidly, with year-on-year growth of 27.8%. In contrast, the market volume of sharing accommodation, office-space and transportation dropped by 29.8%, 26% and 15.7%. “Sharing services and new consumption modes had been playing a critical role in boosting national economic resilience and vitality. Meanwhile, sharing economy platforms were constantly innovating business strategies and marketing modes, thus demonstrating various advantages,” said the report. In 2020, one major change for the country’s sharing economy sector was that more and more enterprises, which mainly served the consumer-end, expanded their businesses to the business-end. 

Xiaozhu, a Beijing-based sharing accommodation website/app, signed a strategic partnership with Bytedance’s enterprise service platform Feishu last year, offering accommodation for business trips, corporate team-building exercises, and training conferences for registered enterprises on Feishu. Ziyouxin, a flexible employment platform under Tencent’s finance and taxation technology arm GoldenTec, actively responded to surging hiring requirements of enterprises during the pandemic. In February of last year, it launched an emergency recruitment service called “shared employees”, offering more than 10,000 workers to enterprises.

Another new feature highlighted in the report was that the sharing economy was further integrated  with internet-based marketing approaches, creating more platform-user interaction and user stickiness. For example, in July, Xiaozhu teamed up with Xiaohongshu (Little Red Book), an Instagram-like Chinese fashion and lifestyle sharing platform, inviting key opinion leaders (KOLs) and key opinion consumers (KOCs) on the platform to share their accommodation experiences. Huang Wei at Xiaozhu’s public affairs department said: “KOLs and KOCs share their living experiences on Xiaohongshu, and interact with users in the online community, encouraging them to pay a visit to the recommended accommodations. In this way, a circulation running from online to offline is formed.”

Data from Xiaozhu showed that between July and November, the transaction volume brought by Xiaohongshu’s channels surpassed CNY10 million, and the monthly growth rate of gross merchandise volume (GMV) stood at 350%. By November 25, 1,610 sharing accommodation brands were registered on Xiaohongshu. “Online marketing communities such as Xiaohongshu can reach more potential users, creating more demand for travel and accommodation. Meanwhile, content platforms are further integrating with the tourism industry, bringing new traffic and growth opportunities,” Huang said.

“When the pandemic is over, the focus of enterprise competition lies in how they realize user retention and profit mode innovation. Efforts are needed in product innovation and service quality enhancement,” said the report. Fan Jiping, Director of the WeDoctor Digital Medical Consortium, said that in the post-pandemic era, there will be increasing market demand for high-quality services integrating online and offline modes of business. How to take advantage of digital technologies to build a service system that satisfies healthcare needs of various patient groups and raises the efficiency and level of the industry – that remains a key issue for us,” Fan said, as reported by the China Daily. 

The GSMA, the world’s largest telecom industry body, held its annual three-day Mobile World Congress (MWC 2021) at the Shanghai New International Expo Center, the first “hybrid event” of its kind with both person-to-person and online activities. The event was planned to be held in Barcelona, Spain, in February 2020, but was canceled due to the Covid-19 pandemic. About 20,000 visitors and more than 200 exhibitors attended the event, but there were few foreigners due to existing travel restrictions. Most foreign speakers like Rima Qureshi, Chief Strategy Officer of U.S. carrier Verizon and Mats Granryd, Director General of the GSMA, delivered their remarks by video. Thousands of virtual visitors logged on to online events from over a hundred countries, according to GSMA. 

The GSMA holds a bullish view on the deployment of 5G in 2021, forecasting that by the end of the year, the technology – with billions of U.S. dollars worth of investment – will reach one in five people. This could help the global economy overcome the effects of the pandemic, the Global Times reports. “As we are very proud to note, this is the first physical event after the pandemic,” Si Han, head of GSMA Greater China, said in a keynote speech. As the world is still confronting the pandemic, holding It also fully demonstrated the success of China’s anti-epidemic work, setting an example for the world and rekindling hopes for an economic recovery driven by the technologies, Jiang Junmu, a Shanghai-based veteran industry expert who also attended the event, told the Global Times.

“The country has also applied many new digital technologies to anti-epidemic work, offering new experience to the world,” he said. With the rapid deployment and popularization of technology, China has become one of the global leaders in 5G applications and the world’s largest 5G market, according to the GSMA. China has installed 718,000 5G base stations, accounting for 70%of the global total, Liu Liehong, Vice Minister of Industry and Information Technology, said in the keynote speech. The country has more than 200 million 5G subscribers, with 218 types of 5G smartphones on the market, Liu said. Application scenarios of 5G are empowering industries including mining, healthcare, ports and manufacturing, and cumulative investment in 5G networks has surpassed CNY260 billion. By 2025, nearly half of all mobile accounts will use 5G. From 2020 to 2025, a total of CNY1.36 trillion is expected to be invested in mobile construction, of which 90% will be in 5G.

Ken Hu, Huawei’s rotating Chairman, said the company did well in 2020, despite U.S. sanctions. Huawei survived and grew in 2020. In spite of the pandemic, it signed more telecom contracts overseas while supplying more than 300 networks in more than 170 countries and regions. “Our performance in 2020 was relatively robust, which basically met our expectations,” he said in a keynote speech at the MWC2021. Revenues and profits both grew slightly last year. Huawei has signed more than 1,000 contacts concerning 5G, covering over 20 industries. Huawei unveiled a 5G folding smartphone with an 8-inch-wide screen at the Congress. The Mate X2, Huawei’s third folding phone, has crisper visuals and better sound for movies and games. It runs on Huawei’s most advanced processor chip, the Kirin 9000. The phone offers “a truly  immersive experience,” the President of Huawei’s consumer unit, Richard Yu, said. The price of the Mate X2 starts at CNY17,999. The high-end model shows Huawei’s ambition to develop its smartphone business despite facing strict U.S. tech bans.

China Unicom and Qualcomm displayed 5G mmWave technologies and applications which may be adopted at the Bejing Winter Olympics in 2022. They include mixed reality smart ski, 8K video streaming, 360-degree event services, and mmWave panoramic experiences, all supported by 5G. In a test, 5G mmWave speed hit 4 gigabits per second (Gbps) onsite, four times the current 5G speed. The economic benefits from the use of 5G mmWave in China will be approximately USD104 billion by 2034, said Frank Meng, Chairman of Qualcomm China, citing research figures, the Shanghai Daily reports.