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Fostering Sustainable Development through Chinese Overseas Economic and Trade Cooperation Zones along the Belt and Road

By Chinese Academy of International Trade and Economic Cooperation, Ministry of Commerce of the People’s Republic of China

United Nations Development Programme in China

Executive Summary

Since the beginning of China’s Reform and Opening-up period in the late 1970s, rapid industrialisation has lifted hundreds of millions of people out of poverty by providing them with jobs and income. Various types of economic zones have served as important vehicles for kick-starting this process in the 1980s and 1990s and have helped achieve ongoing industrial diversification and upgrading. Since the late 1990s, China has also been establishing economic zones overseas to share its industrialisation experience and facilitate economic and trade cooperation with other countries. Today these Chinese Overseas Economic and Trade Cooperation Zones (COCZs) serve as key platforms for promoting investment and trade cooperation under the umbrella of the Belt and Road Initiative. At the same time the Belt and Road Initiative has many potential synergies with the 2030 Sustainable Development Agenda that was launched by all 193 members of the United Nations in 2015, along with its Sustainable Development Goals (SDGs). Most importantly, the COCZs along the Belt and Road aim to foster inclusive and sustainable industrialisation (SDG 9) at home and abroad, promote sustained economic growth, create decent jobs and income (SDG 8), help reduce poverty (SDG 1), hunger (SDG 2) and inequalities (SDGs 5 and 10), improve health and well-being (SDG 3), increase resource- and energy-efficiency (SDGs 6, 7, 11, 12) and reduce greenhouse gas and other polluting emissions (SDGs 13, 14 and 15). Therefore, COCZs along the Belt and Road have the potential to be much more than just engines of trade and economic growth; they can also represent potentially important instruments to advance environmental and social sustainability and through this the achievement of the SDGs in their respective host countries. While many COCZs have achieved impressive progress toward these goals, there is still considerable room for improvement.

This first-of-its-kind report reviews the contributions of COCZs to sustainable development across Belt and Road countries and provides guidelines for COCZs on how to further improve their efforts towards fostering inclusive and sustainable industrialisation and the achievement of the SDGs. Findings of the report are based on a global survey of COCZs conducted by the Chinese Academy of International Trade and Economic Cooperation (CAITEC) under MOFCOM from December 2018 to February 2019. Guidelines for COCZs have been developed based on a comprehensive literature review of existing approaches to incorporating economic, environmental and social sustainability practices in COCZ planning, development and operation. Findings from the literature review were complemented by first-hand insights from COCZ and SEZ developers, operators, companies and workers through a total of 67 semi-structured interviews conducted in Cambodia, China, Egypt, Ethiopia, Indonesia, Nigeria and South Africa, which laid a solid foundation for the development of a set of practical guidelines to help COCZs address economic, environmental and social sustainability at different management stages (planning, construction and marketisation).

The report is organized in five chapters. Chapter 1 provides an overview of the historic development of COCZs, their key roles and status under the Belt and Road Initiative as well as the policy guidance and support that the zones receive to contribute to sustainable development. The chapter concludes with a review of interlinkages between COCZs and the achievement of the SDGs. Chapters 2, 3 and 4 focus on economic, environmental and social sustainability, respectively. Each of these chapters starts out by highlighting the experience and achievements of COCZs in these areas to date and is followed by practical guidelines on how to ensure that COCZs play a bigger role in sustainable development in the future. The guidelines include practical examples from COCZs and other SEZs that illustrate the “business case” for economic, environmental and social sustainability as well as how actions in these areas contribute to the achievement of the SDGs.

Finally, in chapter 5, the report offers overall conclusions and puts forward specific recommendations on how to enhance the roles of COCZs in fostering sustainable development along the Belt and Road. These overall recommendations include: 1) Establish demonstration centres for sustainable COCZ models; 2) Create an experience and knowledge sharing mechanism for COCZs under the Belt and Road Initiative; 3) Identify new paths for COCZ financing.

 

Please click to read full report.

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