Sustainable Development: China and Global Markets

Understanding supply chains

Background

China has become increasingly integrated into the world economy. It has become a major player in many commodity markets and global product chains as it seeks raw materials to sustain its rapid economic growth; to supply its growing export industries; and ultimately to achieve its goal for establishing a peaceful, comfortable and healthy society ("Xiaokang" in Chinese).

In recent years there has been growing media coverage and academic awareness of the current and potential impacts of China's rapid economic expansion on the global environment. While the scope and size of the environmental challenges linked to Chinese economic activity through the various global product chains is well known, neither the explicit nature of those challenges and impacts, the mechanisms driving them nor the appropriate distribution of environmental responsibility along the respective product chains, is clearly understood.

While China's involvement in international product chains logically implies some degree of responsibility for ensuring environmental integrity across the product chains within which it operates, it similarly implies a shared responsibility with other actors along the respective product chains (including foreign suppliers of Chinese raw materials and foreign consumers of Chinese finished products).

This project proposes to analyze the nature of the social and environmental impacts of three global product chains of significant importance to Chinese international trade, with a view to determining the most efficient drivers for sustainable practice along such chains. In addition to considering the role of public and private strategies within China, the project will provide explicit analysis of the potential for public and private strategies built on cooperation among Chinese and international actors. Beyond the specific insights provided on three product chains, it is expected that the methodology we develop will also provide a basis for conducting analysis on the impacts and appropriate policy responses to product chain activity more generally both in China and around the world. We will also conduct a study on an overall sustainable development strategy for Chinese trade policy to build the "supply chain" approach and other sustainability challenges into overall Chinese trade strategies.

The project will be supported by an international advisory group. The project will:

Identify and assess China's role and potential in driving sustainable management with respect to three global product chains through the application of a "Global Commodity Chain Sustainability Analysis"

Through the application of a hybrid methodology borrowing heavily from Lifecycle Analysis and Global Commodity Chain Analysis, the project will gather data and analysis along the following six themes with respect to each product chain:

  1. existing global and national policy framework;
  2. supply and demand statistics;
  3. structure of the supply chain;
  4. environmental impacts of supply chain activity;
  5. social impacts of the supply chain activity; and
  6. potential policy (private and public) responses.

The analysis aims to identify where the sustainability impacts of the respective product chains are most important and which economic actors are best placed to "drive" change towards full-cost internalization of product chain activity.

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