It was already noticeable when driving into the city from the airport yesterday: Beijing is hosting the annual APEC Summit this weekend. For those who don’t know, the Asia-Pacific Economic Cooperation Forum encompasses 21 countries, together making up 54% of the world’s GDP and 44% of world trade. Among its member states are the United States, Japan and China: the top 3 economies of the world.
Not surprisingly, there’s a lot to talk about this week and most of which fits neatly with China’s domestic agenda as Elizabeth Economy points out: regional economic integration, innovative development and infrastructure development, to name a few.
Yet, the world’s eyes are more focused on if a bilateral meeting between Japan’s Shinzo Abe & China’s Xi Jinping will happen: it would be a welcome break in a very fraught relationship.
Blue sky for APEC
But even more than the political dimension of this summit, media in Europe (at least) is talking about the blue sky that is starting to appear in Beijing in preparation of the arrival of the expected heads of state.
Factories are being shut down, cars are restricted and yes, at least today this has resulted in a bright blue – and clean – sky, as you can see above. I took advantage by being outside a lot on a day of meetings talking about China’s pollution and solutions for this.
First, with a Dutch entrepreneur who has made it his business to bring promising and innovative technology to China, often with a focus on reducing pollution, for example by introducing technology for cleaner energy-from-coal production. The main take away: don’t be afraid to do business in China. Yes, there are risks but the opportunity for truly innovative technology here shouldn’t be missed. (And: China is further advanced then you might think, so make sure you really are innovative).
Cleaning up China’s textile production
Another meeting today was at the China office of American NGO NRDC (Natural Resources Defense Council). We spoke mostly about their work on cleaning up the supply chain in the textile industry, focusing especially on dyeing mills. This work started after research showing the extent of water pollution in China, of which the chemical and textile industry are the main contributors. By working with large retailers, NRDC has slowly built a program working with mills directly on decreasing water pollution and improving energy conservation.
However, often, for companies in the textiles industry such as brands and retailers, focus is on working with their first tier supplier: the factories where clothing is sewn together. Mills are another step back in the supply chain and, especially for smaller companies, often unknown – as last week’s SOMO research showed for South-India where completely different issues are at stake.
So, while large international retailers such as H&M, GAP, Nike see a definite business need to tackle this issue partly based on reputational risk, this argument isn’t as strong for smaller companies. What incentive do they have to include second tier suppliers such as dyeing mills in their CSR activities? One reason can be an increased risk of an unreliable supply chain if there is little information about where fabrics come from: mills have been closed down by local governments in the past on the basis of excessive pollution which compromises the timely delivery of fabrics and ability to maintain critical production timelines. Or the risk of hazardous chemicals in the fabrics used.
Lots of work still to do.