China’s Entrepreneurs Take the Lead in Environmental Protection
June 9, 2010
Zhang Jiao earned her wealth in the agricultural wholesale fruit business, buying bananas from Hainan Island, oranges from Sichuan Province, and rice from Northeastern China, and selling it to wealthy markets such as Beijing. Despite her financial success, Zhang wanted to get back to the countryside, away from the harsh, constant urbanity of Beijing’s Wukesong area where she lived. She packed her things, and left for Yanqing, a mountainous, distant suburb of Beijing, where she spent three months hiking in the mountains. The state of the hillsides, bald from years of careless deforestation, shocked her, and spurred her to action.
In 1997, one year after her trip, Zhang closed her wholesale business and leased over 600 hectares of mostly mountainous, barren land from the Yanquing local government.
Without much prior knowledge of ecology and reforestation, Zhang encountered difficulties and failures when she first began her reforestation project. Many of the trees she planted, not native to the area, couldn’t survive the harsh conditions and died as saplings.
After shifting to planting local species and years of experimenting, Zhang finally found the right balance. Now, healthy, growing trees cover 90 percent of her land.
Small and medium-sized enterprises (SMEs), such as the wholesale fruit business Zhang used to own, play a critical role in China’s economic development, poverty alleviation, and employment creation and have contributed significantly to China’s economic success. In fact, SMEs in China make up over half of the country’s GDP. But China’s rapid development, powered both by SMEs and heavy industry, have taken a toll on the environment. According to a 2007 World Bank report, the combined health and non-health cost of outdoor air and water pollution for China’s economy comes to around US $100 billion a year (or about 5.8 percent of the country’s GDP). Air pollution is leading to higher incidences of lung diseases, including cancer, and respiratory problems, especially in large cities. The challenge that Zhang and others face is how to find a new path for development that integrates environmental concerns alongside business profits. Environmentally-speaking, Zhang’s reforestation work succeeded, but financially-speaking, it was a failure – Zhang had to borrow from friends after depleting her substantial savings from her wholesale business to keep investing in her project that yielded no return for years. To continue expanding her reforestation work, she had to find a solution that was economically viable. To do that, she realized she couldn’t just toil away in the mountains, more or less isolated from society.
In 2008, she learned about an eco-entrepreneurship training program supported by The Asia Foundation and jointly implemented by the local Beijing-based partner Global Environmental Institute.
The program helps local entrepreneurs like Zhang who may already be working in environmental businesses, develop economically viable business plans. At the same time, the program trains entrepreneurs to develop business models that either minimize negative environmental impact or even directly address some of the environmental challenges that China faces. In this way, the program harnesses the important role SMEs play in China, and why that they can significantly help, or harm, the environment.
Since 2008, 70 young emerging entrepreneurs with diverse backgrounds, including an investment manager, a post-Ph.D. researcher in auto design, an eco-farm contractor, program officers from local and international environmental NGOs, and journalists, have participated in the landmark trainings.
Some, like Zhang, have already started their own eco-friendly businesses and want to improve them; others are poised to enter the field and need a broader understanding of how to begin; others are committed to the concept of green business and hope to seize opportunities in this emerging field. Before being accepted to the program, participants must submit their own business plans on how to set up an environmentally-friendly business. Throughout the program, experts and practitioners, including water and energy experts and green business leaders, mentor participants. As they learn and become more savvy, the green entrepreneurs update their business plans, present them to the group to refine them and develop the necessary resources to make the businesses successful in the marketplace.
In this way, Zhang narrowed down to two main business opportunities that could help her generate profits: one was to grow organic food and vegetables to sell directly to Chinese urban citizens who are increasingly concerned about food safety; and the other was to organize environmental education and eco-tourism opportunities on her reforested land. She worked with the well-known Chinese environmental reporter Feng Yongfeng to launch Nature University on her land, a place where urbanites can experience nature, as well as learn how to protect it. Meanwhile, her new environmentally-friendly agriculture business, with the help of her previous career experience, is now succeeding.
Another green entrepreneur in Zhang’s group secured a low-interest loan to market a wind and solar product as an alternative to on-ship batteries, which are typically tossed in the ocean when expired. Another, Emma Chen Xiangdian, who spent years working for multinational companies in product design and marketing, started a company focusing on visual communications and the environment. She honed her business plan into an online clearinghouse that publishes abstracts from professional literature on green solutions for business. Her website, VisavisNet.com, was launched last year and provides a channel for information on environmentally-friendly solutions for businesses.
Meanwhile, program alumni are now beginning to meet regularly every month or two to share their experiences and challenges. In May, about a dozen alumni and current green entrepreneurs gathered in a Beijing café for a salon-style discussion on green business opportunities in China. The alumni group has begun to attract other young people interested in green business ideas as well. In the future, this emerging network of entrepreneurs has the potential to connect young businesspeople throughout China who are trying to develop environmentally-friendly business models, and to reach out to other entrepreneurship initiatives to foster eco-friendly business planning on a broader scale. Such initiatives will help bring about changes in doing business that are needed to positively affect the future of China’s environment.
Huang Zhen is The Asia Foundation’s environment Program Officer in Beijing. She can be reached at [email protected].
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