Green Finance, Sustainable Development and the Belt and Road Initiative

327 Pages·2020·28.549 MB·English

by  Fanny M. Cheung, Ying-yi Hong

Green Finance, Sustainable

Development and the Belt and
Road Initiative
Can China’s Belt and Road Initiative (BRI) promote sustainable development,
alongside its primary aims of increasing commercial connectivity with China’s
partners?
In discussions of the BRI the focus has tended to be on the implications for
infrastructure construction, connectivity, and economic diplomacy. Rather less
attention has been paid to its potential impact on sustainability. The initiative has
not only set principles to prevent climate change and promote sustainable devel-
opment, but also pledged to align with the UN’s environmental objectives. The
contributors to this volume describe and evaluate the consequent policy coord-
ination in the areas of green finance, green energy, and sustainable development
in the Belt and Road regions. They examine both the challenges and opportun-
ities of these projects, and the role that Hong Kong can play in supporting their
assessment, finance, and implementation. With contributions from authors based
in mainland China, Hong Kong, Australia, Qatar, the UK, and the US – with
experience in corporate social responsibility, international finance, environmental
policy, and international relations – this book presents a thorough and rigorous
analysis of the green side of the BRI.
This is a valuable resource for scholars of the BRI and its many implications for
China, its partners, and the development of sustainable infrastructure.
Fanny M. Cheung is former Pro- Vice- Chancellor and Choh-Ming Li Professor
of Psychology at the Chinese University of Hong Kong. She is currently Senior
Advisor of Hong Kong Institute of Asia- Pacific Studies and Co- Convenor of the
Global China Research Programme at the Chinese University of Hong Kong.
Ying- yi Hong is the Choh-M ing Li Professor of Management at the Faculty
of Business, Associate Director of Hong Kong Institute of Asia-Pacific Studies
and Co- Convenor of the Global China Research Programme at the Chinese
University of Hong Kong.
Routledge Studies on Asia in the World
Routledge Studies on Asia in the World will be an authoritative source of know-
ledge on Asia studying a variety of cultural, economic, environmental, legal,
political, religious, security and social questions, addressed from an Asian per-
spective. We aim to foster a deeper understanding of the domestic and regional
complexities which accompany the dynamic shifts in the global economic, pol-
itical and security landscape towards Asia and their repercussions for the world
at large. We’re looking for scholars and practitioners – Asian and Western alike
– from various social science disciplines and fields to engage in testing existing
models which explain such dramatic transformation and to formulate new the-
ories that can accommodate the specific political, cultural and developmental
context of Asia’s diverse societies. We welcome both monographs and collective
volumes which explore the new roles, rights and responsibilities of Asian nations
in shaping today’s interconnected and globalized world in their own right.
The Series is advised and edited by Matthias Vanhullebusch and Ji Weidong of
Shanghai Jiao Tong University.
Interpreting the Chinese Diaspora
Identity, Socialisation, and Resilience According to Pierre Bourdieu
Guanglun Michael Mu and Bonnie Pang
Chinese Peace in Africa
From Peacekeeper to Peacemaker
Steven C.Y. Kuo
The Quest for Legitimacy in Chinese Politics
A New Interpretation
Lanxin Xiang
Indian Migrants in Tokyo
A Study of Socio-Cultural, Religious and Working Worlds
Megha Wadhwa
Green Finance, Sustainable Development and the Belt and Road Initiative
Edited by Fanny M. Cheung and Ying-yi Hong
Find the full list of books in the series here: https://www.routledge.com/
Routledge-Studies-on-Asia-in-the-World/book-series/RSOAW
Green Finance, Sustainable

Development and the Belt
and Road Initiative
Edited by
Fanny M. Cheung and Ying- yi Hong
First published in English 2021
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
52 Vanderbilt Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2021 selection and editorial matter, Fanny M. Cheung and Ying- yi Hong;
individual chapters, the contributors
The right of Fanny M. Cheung and Ying- yi Hong to be identified as the authors
of the editorial material, and of the authors for their individual chapters,
has been asserted in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.
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in any form or by any electronic, mechanical, or other means, now known or
hereafter invented, including photocopying and recording, or in any information
storage or retrieval system, without permission in writing from the publishers.
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and are used only for identification and explanation without intent to infringe.
British Library Cataloguing- in- Publication Data
A catalogue record for this book is available from the British Library
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ISBN: 978- 0- 367- 89880- 9 (hbk)
ISBN: 978- 1- 003- 02166- 7 (ebk)
Typeset in Galliard
by Newgen Publishing UK
Contents

List of figures vii
List of tables xi
List of contributors xiii
Introduction 1
SECTION 1
BRI and national competitiveness 13
1 Development in the Belt and Road Regions from a
competitiveness perspective: the first lustrum review 15
VICTOR ZHENG AND HUA GUO
SECTION 2
Renminbi internationalization and green finance 31
2 The Belt and Road Initiative and China’s green foreign
direct investment 33
WEN WANG AND FANXIN YANG
3 Sustainability of RMB internationalization 58
CHEUNG-K WOK LAW
4 China’s rising consumerism, RMB internationalization, and
sustainable growth 89
MINGGAO SHEN AND JIANGHUI CHEN
5 Understanding green bond challenges: a stakeholder’s
perspective 119
DAVID C. BROADSTOCK, LOUIS T.W. CHENG, AND TIANTIAN WANG
vi Content
SECTION 3
Green energy, technology, and manufacturing 157
6 Advancement of environmental sustainability through
LNG: the case of Qatar– China relations 159
STEVEN WRIGHT
7 Technological assessment of CO capture and EOR/ EGR/
2
ECBM- based storage 177
GUOPING HU, KAI JIANG, RUI WANG, AND KEVIN GANG LI
8 Meeting the green challenges and opportunities of Hong
Kong manufacturers in China’s Belt and Road pathway: the
Pearl River Delta experiences 216
NING LIU, CARLOS WING-HUNG LO, AND PANSY HON YING LI
SECTION 4
Green development and public-p rivate partnership 233
9 Greening China’s Belt and Road Initiative: a role for
Chinese NGOs to go global? 235
KATHINKA FÜRST
10 High- hanging fruits and the Belt and Road
Initiative: sustainability through entrepreneurship 261
GORDON C.K. CHEUNG
11 An integrated approach to sustainable infrastructure
standards for the Belt and Road Initiative 285
STEPHEN Y. S. WONG, JOHNSON C. S. KONG, GLORIA W. T. LUO,
AND NATALIE H.T. LAU
Index 311
Figures

1.1 The average scores of GCI in Belt and Road and non- Belt and
Road economies: 2007– 2018 20
1.2 The average scores of Basic Requirements in Belt and Road and
non- Belt and Road economies: 2007– 2018 22
1.3 The average scores of Efficiency Enhancers in Belt and Road
and non-B elt and Road economies: 2007– 2018 23
1.4 The average scores of Innovation and Sophistication Factors in
Belt and Road and non-B elt and Road economies: 2007– 2018 23
1.5 The average scores of GCI by geographical regions in the Belt
and Road regions: 2007– 2018 25
2.1 China’s FDI flow (in USD100 million) 37
2.2 Regional distribution of China’s FDI 2013– 2017 (in
USD100 million) 38
2.3 Industrial distribution of China’s FDI Flow 2013– 2017 (in
USD100 million) 39
2.4 China’s foreign contracting projects (in USD100 million) 40
3.1 China’s current account, foreign exchange reserves and net
inflow of foreign direct investment 61
3.2 RMB/ USD exchange rate and foreign reserves of China 62
3.3 Average foreign exchange daily turnover 2016 (USD bn) 64
3.4 SWIFT global payment flow by share: top 15 currencies (March
2018) 65
3.5 Cross- border trade settlements in RMB in China 65
3.6 RMB deposits and cross- border trade settlements in Hong Kong 67
3.7 Renminbi outstanding loans (RMB bn) 69
3.8 China- related loans and advances 70
3.9 Total government debt securities outstanding (USD bn,
Q4 2017) 73
4.1 Major countries’ manufacturing sector as % of G20 total (%) 91
4.2 Major countries’ private consumption as % of G20 total (%) 92
4.3 Major economies’ GDP as % of global total (%, measured
in PPP) 92
4.4 China vs. global, 1978–2 016 growth (real value, times) 93
viii List of figures
4.5 China’s exports, investment, and consumption as % of G20
total (%) 94
4.6 Per capita consumer spending of major countries relative to the
US (%) 94
4.7 G20 per capita GDP and private consumption as % of GDP,
2015 (%) 95
4.8 Per capita GDP and private consumption, 2015 (US$) 96
4.9 Major countries’ private consumption growth in 1986– 2016
(real value, times) 96
4.10 Export, manufacturing, and consumption growth in Japan and
Korea (real value, times) 97
4.11 Japan growth path: GDP and consumption forecasts, China vs.
US (US$ trn) 98
4.12 China current growth path: GDP and consumption forecasts,
China vs. US (US$ trn) 99
4.13 Major countries’ food spending as % of total consumption (%) 100
4.14 Motor vehicles per 1000 residents (unit) 100
4.15 US consumption growth and proportion changes
(1976– 2006, pp) 101
4.16 Japan consumption growth and proportion changes (1970–
2000, pp) 102
4.17 Subsectors with a rising proportion in total spending in
Japan (%) 102
4.18 Subsectors with a declining proportion in total spending in
Japan (%) 103
4.19 Per capita GDP and consumption- to- GDP ratio in different
provinces (2016, %) 103
4.20 Food spending as % of total consumer spending in different
provinces (2016, %) 104
4.21 Food spending as % of total consumer spending in selected
regions (%) 105
4.22 Per- 1,000 resident vehicle ownership in selected regions (unit) 105
4.23 Proportion of consumer staples spending by region (%) 106
4.24 Consumer staples and discretionary spending growth by region
(2002– 2016, nominal value) 106
4.25 Proportion of spending on consumer discretionary in selected
regions (%) 107
4.26 Provincial savings rate and proportion of spending on consumer
staples (%) 108
4.27 Market shares of China’s goods exports and manufacturing
sector among G20 countries (%) 109
4.28 China’s exports as % of industrial and agricultural total
production (%) 109
4.29 US GDP and manufacturing sector as % of G20 total (%) 110
4.30 China trade deficit vs. consumption, as % of GDP (%) 111
List of figures ix
4.31 Shares of Forex turnover, consumption, and trade, 2016 (%) 112
4.32 Trade- surplus- to- GDP ratio and level of currency
internationalization (%) 113
4.33 Trade surplus/ deficit for major regions, 2016 (US$ bn) 113
4.34 Shares of Forex turnover and ODI (%) 114
4.35 China’s trade surplus/d eficit with G20 countries (2017, US$ bn) 115
4.36 China’s trade balance with BRI countries (2017, US$ bn) 115
4.37 Major countries’ share gap between consumption expenditure
share and manufacturing value added share in G20 total (%) 116
4.38 Global top 100 retail and consumption companies by country 117
5.1 Logistic growth curve- based projections of the dollar value of
the green bond market 121
5.2 S&P Bond Indices over time – daily data spanning Jan. 2007 to
Oct. 2018 138
5.3 Coupon rates on green bonds from for- profit issuers (left panel)
and non-p rofit issuers (right panel), 2013– 2018 141
5.4 The green- bond/ ESG investment loop 148
5.5 Integrating social and financial returns into a composite
performance indicator 150
7.1 A schematic diagram of carbon capture and storage (Image
courtesy of CO2CRC, with permission to reuse) 178
7.2 Technologies for CO capture (Hu 2018; with permission
2
to reuse) 180
7.3 A solvent absorption process for CO capture (Image courtesy
2
of CO2CRC, with permission to reuse) 181
7.4 A typical sorbent adsorption process for capturing CO (Image
2
courtesy of CO2CRC, with permission to reuse) 183
7.5 A representative of adsorption isotherm (T1<T2) 183
7.6 A schematic diagram of a rotary TSA facility 184
7.7 Membrane separation mechanisms (Image courtesy of
CO2CRC, with permission to reuse) 186
7.8 A simplified schematic chemical looping process 187
7.9 A carbonic anhydrase catalyzed mineralization process of MgO
(Power et al. 2016; with permission to reuse) 188
7.10 A simplified schematic of the carbonate looping process 188
7.11 A simplified diagram of cryogenics distillation (Image courtesy
of CO2CRC, with permission to reuse) 189
7.12 CO geological storage options (Image courtesy of CO2CRC,
2
with permission to reuse) 190
7.13 Stratigraphic and structural trapping mechanism (CO Capture
2
Project (CCP 2015), with permission to reuse) 192
7.14 Residual trapping mechanism (CO Capture Project (CCP
2
2015), with permission to reuse) 192
7.15 Solubility trapping mechanism (CO Capture Project (CCP
2
2015), with permission to reuse) 193