Creating Prosperous and Livable Chinese Cities: The New

Transcription

ACA
DEM Y OF
Creating Prosperous and Livable Chinese Cities:
The New Resource Economy City Index Report
Accenture and the Chinese Academy of Sciences
I
EN
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C HI
SE
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Authors
Peter Lacy
Dr Minjun Shi
Guanghai Li
Managing Director, Strategy &
Sustainability, Asia Pacific Lead
Professor, Graduate University of the
Chinese Academy of Sciences
Managing Director, Strategy &
Sustainability, Greater China
Michael Ding
Deputy Director, Research Center on the
Fictitious Economy and Data Science
(FEDS), Chinese Academy of Sciences
Xuyu Chen
Senior Managing Director,
Resources Lead, Greater China
2
Director, FEDS, Green Economy Lab
Senior Marketing Manager,
Management Consulting, Greater China
Exhibit 1
China’s urban challenge in numbers
13.6%
52.6%
13
6.5%
61%
85.8%
Proportion of China’s total water
use attributed to prefecture-level
and larger cities
89.6%
Proportion of China’s total
industrial CO2 emissions
contributed by prefecture-level
and larger cities
3%
13.5%
3.5%
2.8%
1.7%
79.8% and
83.6%
34.6% vs
70.7%
The average annual GDP growth of China’s urbanization rate in 2012
China’s prefecture-level and larger
cities between 2000 and 2011
The number of megacities
predicted to have a population of
10 million or more by 2020
Resource and environmental
consumption as a percentage
of GDP
Environmental pollution control
costs as a percentage of GDP
Proportion of China’s total land
area comprising prefecture-level
and larger cities
National ecological and
environmental degradation costs
as a percentage of GDP in 2010
The respective rates of urban
garbage disposal and sewage
treatment in Chinese cities
(compared to 100 percent in the
majority of developed countries)
1
350 million
Expected increase in China’s
urban population in the next
two decades
The proportionate contribution to
China’s GDP from prefecture-level
and larger cities
Portion of China’s total land
area used for industrialization,
urbanization and other
construction
Economic loss due to the impact
of PM10 health costs as a
percentage of GNP
Broadband penetration rates in
China and Japan respectively
3
Contents
Balancing urbanization and sustainability 5
Taking a sustainable approach to growth
6
Executive summary
7
Part 1: China’s urban challenges and a new model for development
10
Part 2: Starting out: China’s cities today and their prospects 13
Part 3: Carving out a new path
32
Research methodology
38
Acknowledgements46
References47
Disclaimer
1.The rankings in this report are based on the economic development, resource and environmental sustainability, and
affordability of future development of the cities. If the parameters are changed, the results may differ.
2.We endeavored to be as objective and impartial as possible during the data collection process, but we provide no warrant
as to the accuracy, completeness, timeliness, validity and availability of the data we obtained.
3.The opinions, research, analysis and other content, in this report is intended for reference only, and shall not be taken to
constitute advice for government decisions or personal investments.
4
Balancing urbanization and
sustainability
China’s rapid economic development
has delivered substantial benefits
to its citizens and the nation.
However, this development has
come at a cost—in terms of natural
resources and the environment.
Although the Chinese Government
has identified urbanization as the key
driving force for future development,
it is also important to consider a
coordinated approach that takes into
account culture, ecology, economy,
politics and society.
As the Director of the Chinese Academy
of Sciences Research Center on the
Fictitious Economy and Data Science,
I am delighted to present this report
which encompasses the work carried out
jointly by our Green Economy Lab and
Accenture to evaluate and analyze the
sustainability of Chinese cities.
This is a new approach, and I expect
that it will provoke thought and
debate. While the research is at an
early stage, I hope that the New
Resource Economy (NRE) City Index
will become a useful reference for
macro-level decision making by
China’s central and local governments,
as we refine the methodology and
analysis over coming reports.
I look forward to seeing how
the NRE City Index can improve
the development patterns of
China’s rapidly growing cities.
Cheng Siwei
Director of the Research Center on the
Fictitious Economy and Data Science,
Chinese Academy of Sciences
Dean of School of Management,
University of Chinese Academy of
Sciences
Vice-Chairman of the Standing
Committee of the Ninth and Tenth
National People’s Congresses of the
People’s Republic of China
5
Taking a sustainable approach
to growth
China’s rapid urbanization is changing the
country’s landscape and the way people
live. But it also poses daunting challenges
for the country now and into the future.
The most remarkable shifts can be seen
in cities. Over the past two decades,
China’s largest cities, Shanghai and
Beijing, have seen their populations
double to exceed 20 million. Shenzhen,
now with a population of over 10 million,
accommodated less than 3 million
residents in the early nineties.
Six other megacities are still expanding in
terms of size and population, as are eight
other cities with populations of about
5 million each. Over the next two
decades, we believe the majority of
China’s prefecture-level cities will become
home to more than 1 million people.
However, this rapid expansion has come
at a cost. Resources such as energy,
water and land are under intense strain,
and issues such as air pollution are
having an impact on people’s health and
quality of life.
Given the unstoppable rise of cities,
we now have to ask: is China’s urban
development sustainable?
Taking into account current trends,
China’s urban population is tipped to
exceed 900 million people by 2030
or two-thirds of the total population.
But Chinese cities are struggling to
effectively manage scarce resources
and protect the environment, and many
are caught in a pattern where economic
development overrides all other concerns.
To help cities address these challenges,
we have developed the New Resource
Economy (NRE) approach to support
sustainable growth decoupled
from high resource consumption
and environmental impact.
6
We are privileged to partner with the
Chinese Academy of Sciences Research
Center on the Fictitious Economy and
Data Science to create the NRE City
Index. This index is a tool for evaluating
the performance of Chinese cities
on economic development, resource
and environmental sustainability, and
affordability for future development. The
key findings from this evaluation process
are contained in this report.
By encouraging Chinese cities to develop
in more sustainable ways, we can help
the nation become more prosperous,
raise citizens’ quality of life and protect
our valuable natural environment.
The purpose of this research is to assess
the current situation of a selection of
Chinese cities to ignite new ideas and
perspectives that can transform their
economies. As it is the first report
using the index, there will be scope
to enhance the methodology and
analysis in future reports. It is also
important to note that we have not
attempted to develop a white paper
on urbanization in China. Rather, we
want to promote innovative thinking
on China’s economic development.
The NRE City Index methodology is in
an early stage and does not yet cover
all of China’s cities. Nor does it take
into account elements such as resource
endowment and geography. However, it
does provide a useful baseline to begin
evaluating the sustainability paths of
Chinese cities. In the next phase of the
research, we will use these findings
to initiate in-depth discussions with
stakeholders including administrators,
businesses and research institutions.
Accenture believes the possibilities for city
development aligned to the NRE model
are substantial, and we are committed to
supporting China’s cities as they create
prosperous, attractive and sustainable
urban environments. We look forward to
making an important contribution to this
future through the report.
Gong Li
Chairman, Accenture Greater China
Executive summary
The Chinese poet Tao Qian (AD 365–427)
used the term “peach-blossom land”
to describe the paradise of agricultural
civilization, which was the dream of
ancient Chinese society. However, in the
era of rapidly urbanizing societies, the
contemporary Chinese dream is for more
livable cities.
Over the past three decades, China has
changed from an agricultural society and
economy to a predominantly urbanized
and industrialized nation. In 2012, China’s
urban population made up more than 52
percent of its national total, and its 300
largest cities now generate more than 60
percent of the country’s gross domestic
product (GDP).
The urban boom has spawned more
and larger cities with higher buildings,
wider roads, high-speed railways and
more factories. This process has been
highly resource intensive and has
had a major environmental impact.
Benchmark data used by the Chinese
Academy of Sciences (CAS) shows
the total cost of resource depletion,
pollution and environmental degradation
in China at 13.5 percent of GDP.2
There is little doubt that China’s
urbanization and economic growth will
continue. However, most experts agree
that the current model of development
for Chinese cities is unsustainable. The
question is, how can Chinese cities
strike a new balance between economic
growth, resource use and environmental
impact? How can they provide jobs and
income, while remaining livable for the
long term?
We believe that China is uniquely
positioned to turn challenge into
opportunity through the transition to a
new development model; one in which
the country’s continued economic
prosperity is decoupled from its use
of scarce resources and increasing
environmental degradation. We call this
model the New Resource Economy (NRE).
The NRE encompasses all levels of
society, from the individual through to
enterprise and government, and
requires an economy-wide transition in
how resources are sourced, consumed
and managed.
Insight III: Mid-sized cities may
have the greatest potential to
adopt an NRE model
To establish a quantitative baseline
for how Chinese cities have been
managing the challenges presented
by urbanization to date, Accenture
and CAS developed the NRE City
Index. The index examined 73 Chinese
cities and their performance on key
sustainability and economic criteria.
Cities with 1 million to 3 million
people are the key regions for future
urbanization and at present enjoy
relatively balanced development. They
should take advantage of this situation
and start their transition now.
A need and an opportunity
for a new path
Our research confirmed that Chinese
cities are currently on unsustainable
development pathways and urgently need
to apply new approaches. For instance,
we discovered that 80 percent of the
73 cities we reviewed are currently
failing to achieve a balance between
economic growth, resource efficiency
and sustainable development.
The analysis pointed to five key insights
about China’s cities.
Insight I: Unbalanced development
but capacity to transition
China’s urban economic development
is very unbalanced, and resource
and environmental sustainability are
prevalent challenges. However, cities’
capacity for transformation does not vary
significantly by their level of economic
development or by their sustainability
track record. This suggests that all cities
have the potential to transition to a more
balanced development model.
Insight II: More developed
cities show greater unbalanced
development
Our results show that, with some
exceptions, the most economically
developed cities show more serious
imbalances between economic growth,
available resources and the state of the
environment. Less-developed urban areas
have fewer current challenges and may
find it easier to steer towards a new path.
Insight IV: Poorly targeted
urbanization is counterproductive
in the long term
Although there are benefits in prioritizing
development in some areas over
others, most developed cities show
the downside of overdevelopment.
Policymakers need to carefully
select and manage focus regions for
development. These areas should be
chosen based on a comprehensive set
of factors, including current resource
and environmental conditions, the
existing intensity of development and
the potential for future development.
Insight V: Resource-based cities
must change their development
path
A number of Chinese cities are classified
as “resource-based cities”, defined as
those that depend on non-renewable
resources for their rapid economic
growth. According to our research,
these cities show the most unbalanced
development. To achieve ongoing and
sustainable economic growth, resourcebased cities need to implement strategies
to broaden their economic base, move
towards less resource-intensive activity
and, in turn, reduce carbon emissions.
Harnessing innovation to
transition to a new model
Based on our analysis, we believe there
are three broad areas of innovation that
can enable cities to transition towards an
NRE model for more sustainable growth.
7
Innovation in policy and strategy
Achieving a transition to balanced
development requires a deliberate
strategy, that is, a set of policies
and plans. China’s city authorities
and planners will need to take a
long view, encompassing a broad
range of economic, resource,
social and cultural factors.
Development in any one geographic
area should be closely coordinated
with each of the others, paying special
attention to potential unintended
consequences. Beyond individual
cities, provincial and national
authorities need to devise updated
strategies for priority urban areas.
Sustainable master planning and
urban design must be about more
than just energy and water efficiency,
connectivity to public transit networks
and planting more trees. Rather, it
needs to reflect the aspirations of
residents and help them achieve their
desired way of life. Planning policy and
regulatory control need to prioritize
people ahead of motor vehicles
and more closely align community,
commerce and the digital infrastructure
required to drive efficiency. These
considerations are essential if China’s
cities are to attract and retain the
right skills and capabilities to enable
their growth and development.
The essence of successful urban
environments is vibrant and diverse
street-level activity where people meet
and interact in unplanned ways. China’s
future master planning needs to ensure
it allows room for organic growth within
the broader city vision, and enables an
urban footprint to emerge that is both
unique—reflecting the characteristics of
the individual city and its inhabitants—
and sustainable.
More effectively managing the
disparate elements of city government
and services will also be important to
break down silos. This will require a
move towards integrated governance
structures where multiple city
departments such as energy, water,
waste, building, transportation and
culture will coordinate to achieve
sustainable outcomes.
Building the infrastructure to support
balanced urban development will
require massive investment.
8
Traditionally, the main source of
financing for Chinese cities has been
land sales and leasing, which is a finite
funding source and can also lead to
overdevelopment. Local governments
must diversify financing channels
with measures such as establishing
equity investment funds, developing
municipal bonds, and encouraging
and attracting private investment.
Finally, the rapid improvement in “Big
Data” analytics available today provides
a massive opportunity for improved
service delivery. In addition, city
planners and government authorities at
the city, provincial and national level
can now turn masses of disparate data
into information that can help them
design new policies and then monitor
the progress of the transition.
Innovation in technology: the
opportunity for digital cities
Innovation in models for crosssector and cross-regional
cooperation
Waves of innovations in digital
information and communications
technology are providing opportunities
for Chinese cities to accelerate their
move towards sustainable growth
and a better life for their citizens. Key
digital technologies include intelligent
infrastructure, machine-to-machine
communication (also called the “Internet
of Things”), smart devices, mobility, big
data and analytics, cloud computing and
social media.
These technologies are connecting
all elements of cities, encompassing
citizens, public services, businesses,
economic activity, buildings, transport,
education, and utilities including
energy, water and waste. They
enable economic growth, resource
efficiency and environmental
sustainability in equal measure.
Recent digital infrastructure policy
and investment commitments are
accelerating this shift towards a
connected urban economy and
society. One such announcement is
the Chinese Government’s Broadband
Strategy which targets data speeds
of 20 megabytes per second for all
urban households by 2020.3 Another
commitment is that of State Grid and
the Chinese Government to roll-out
smart grids to all Chinese households
to optimize electricity supply.4
Involving citizens through technology
could result in the greatest near-term
opportunities for new kinds of services,
for problem solving and for education.
Recent estimates put the number of
mobile internet subscribers in China at
420 million and that of social media
users at 597 million or 91 percent of all
internet users.5,6
Governments lead China’s urban
development and management.
Achieving harmonious development
and building livable cities demands
strong cooperation between all levels
of government authorities and among
city governments. Sharing innovation
both at the policy and program level and
allowing early use of new approaches
will accelerate a new path. This
cooperation can be supported through
the creation of knowledge- and datasharing platforms among cities; and it
should also allow businesses and citizens
to play a greater role in urban planning.
As China’s growth continues apace, now
is the time for governments, businesses
and other stakeholders to start moving
towards a new development model.
This report aims to provide a first step
by evaluating the current status of
urban development across the economy,
resources and the environment.
The second step will be to set
urban transformation goals. This
will involve specifying capability
constraints according to urban
performance results and analysis;
determining the transformation
paths for different categories of
cities; and addressing cities’ resource
and environmental challenges.
Next, stakeholders representing
different levels of government as
well as business and civil society
will need to come together to
think through transition strategies
and to specify the roles to be
played by the different parties.
We look forward to working with all
key stakeholders to advance this
discussion and help China’s cities
develop and implement sustainable
development strategies.
9
Part 1
China’s urban challenges and a new model
for development
In the 1980s, more than 80 percent
of China’s population carried on the
agricultural lifestyle of their ancestors.
In villages and terraced fields they
raised cattle, and farmers cultivated
their crops day after day, rising at dawn
and resting at dusk. But in the past
three decades, China has undergone a
ferocious surge of urban development.
Beginning with the period of reform and
opening up in the 1970s, the country’s
economy soared, allowing the nation
to experience a rate of urbanization
unprecedented in human history.
The boom of China’s cities
is a double-edged sword
In 2012, China’s urbanization rate had
reached 52.6 percent, and the urban
population exceeded 700 million. This
urbanization pattern is set to continue
at 0.8–1.0 percent a year (see Exhibit
2) and by 2030, the urban population
will account for two-thirds of the
country’s total.7 According to the
Development Research Center of China’s
State Council, the GDP growth rate will
increase by 0.7 percentage points for
every percentage point of increased
urbanization.8
However, China’s sustained rapid
growth (see Exhibit 3) largely depends
on a development model characterized
by high resource consumption and
environmental degradation. According
to the Chinese Academy of Sciences,
China’s resource and environmental
costs account for as much as
13.5 percent of GDP.9
Exhibit 2. China’s urbanization rate10
66.5%
70
Urbanization rate %
60
50
40
30
20
10
0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Year
Exhibit 3. China’s economic growth outlook, 2011–3011
Annual GDP growth rate %
9
8.2
7.1
8
7
6.1
5.4
6
5
4
3
2
1
0
2011–15
2016–20
2021–25
Year
10
2026–30
The Chinese Government recognizes
the need to find a balance between
driving economic growth and protecting
the environment, and has emphasized
that higher GDP should not be the sole
aim of development.12 For instance,
the government’s Twelfth Five-Year
Guideline (2011–2015) puts more
emphasis on quality growth, setting a
higher target for resource efficiency and
environmental protection (see Exhibit 4).
Further, the next five to 10 years is a
critical period for China’s transformation
into an urbanized society. At the
Chinese Communist Party’s 18th
National Congress*, the Government
introduced the goal of building a
more prosperous society by 2020, and
promoted coordinated industrialization,
IT development, urbanization and
agricultural modernization.13
However, we believe that unless
China adopts a more sustainable
growth pattern, the nation will remain
restricted by its existing energy
structure and resource supply and will
see ever higher levels of environmental
degradation (see Exhibit 5).
The New Resource
Economy—a new model for
development
To illustrate how cities can transition
to more balanced development,
Accenture has developed the New
Resource Economy (NRE) concept.
In this model, the rate of economic
growth is decoupled from the
rate of resource consumption and
environmental degradation.
The approach proposes that by
leveraging innovation in policy,
technologies and new collaboration
models, cities can meet their economic
growth objectives without further
straining the limited supply of resources
and further degrading the environment.
The NRE is characterized by:
•efficiency: the same or more utility
is achieved with less resource
consumption, effectively decreasing
resource intensity
•substitution: non–carbon based fuels
and renewables replace hydrocarbons
and diversify the energy mix
•regeneration: “circular economy”
principles are applied to ensure that
consumed resources are repurposed or
recycled to extend their lifespan.
What value does the NRE bring to
China’s cities in supporting their
development? We believe it can be used
to achieve three main objectives. First,
it can be used to encourage innovation,
improve development capabilities and
form the basis of a long-term and
effective mechanism for sustainable
urban development. Second, it can
help support the continuing prosperity
of the urban economy through more
efficient resource use. And finally, it can
help emphasize the value of economic
decisions which support a sustainable
development approach in securing a
better quality of life for all citizens.
* (held in Beijing November 8–14, 2012)
Decoupling: a definition
According to the United Nations
Environment Programme (UNEP)
International Resource Panel14,
“decoupling” refers to two dimensions
of sustainable development:
“Relative decoupling” means that the
increase in resource consumption or
environmental impact is lower than the
rate of economic growth, representing
better resource productivity.
•resource decoupling: reducing
resource consumption per unit of
economic activity
•impact decoupling: reducing the
negative impact of any ongoing
economic activities on the
environment while maintaining
economic output.
11
Exhibit 4. Objectives regarding the economy, resources and the environment stipulated in China’s Twelfth Five-Year
Guideline (2011-2015)15
7%
45 million
7%
Average annual GDP growth rate
Increase in urban employed
population
Average annual growth in per
capita disposable income among
urban residents
4%
11%
16%
Increase in urbanization rate
Proportion of non-fossil fuels in
primary energy consumption
Decrease in energy consumption
per unit of GDP
30%
17%
10%
Decrease in land use for
construction, per unit of GDP
Decrease in CO2 emissions per unit Decrease in ammonia and
of GDP
nitrogen oxide emissions
8%
8%
Decrease in chemical oxygen
demand (COD)
Sulfur dioxide (SO2) emission
reduction
Source: China’s Twelfth Five-Year Guideline (2011–2015).
Exhibit 5. The trilemma of balancing economic development, resource security and environmental protection
Environmental protection
Successful mitigation of environmental
degradation and its implications to
health, productivity and social
well-being
rity
ecu
es
Res
our
c
n
ctio
e
rot
al p
ent
nm
iro
Env
Resource security
Sufficient supply and
availability of resources that
can support and sustain
China’s continuing growth
Economic development
Economic development
Increased economic prosperity
characterized by rising income
levels, higher output and
improved standards of living
12
Part 2
Starting out: China’s cities today and
their prospects
From senior government officials
to the general public, there is
widespread recognition of the
challenges confronting China’s cities.
The NRE City Index aims to provide a
baseline measure of a city’s economic
development, resource use, and resource
and environmental sustainability to
focus discussion and help decision
makers as they start moving forward.
Included in the analysis were 73
of China’s 287 largest cities at the
prefecture level and above. They
represented a variety of sizes and
per capita incomes and covered
31 provinces, municipalities and
autonomous regions to ensure broad
representation (see Exhibit 6).
The indicator system used a weighted
composite based on a total of
32 indicators (see Exhibit 8 on page 16).
It measured three areas of performance:
•economic performance: a city’s
level of economic development and
capacity for further development,
indicating the quality of life it can
support
•resource and environmental
sustainability: a city’s ability to
preserve the environment, its
dependence on natural resources and
the efficiency of its resource use
•development capability: the capacity
for a city to transition into an
NRE, including elements such as
infrastructure, IT development, and
education and policy execution.
The base year for the data was 2010; a
small number of indicators used data
from 2011. Please see the Research
Methodology section of this report for a
full list of indicators and their weighting.
Exhibit 6. Sample distribution of the NRE City Index by size and per capita GDP
40
35
30
25
20
15
10
5
0
Megacities
GDP per capita below RMB50,000
Super cities
Large cities
GDP per capita between RMB50,000 and 70,000
Medium cities
GDP per capita above RMB70,000
13
Exhibit 7. Ranking of all cities included in the index
City
NRE City Index ranking
Economic performance
Resource and
environmental
sustainability
Supporting capacity
Score
Ranking
Score
Ranking
Score
Ranking
Score
Ranking
Shenzhen
76.54
1
96.01
1
71.63
2
62.88
26
Suzhou
74.11
2
85.43
4
68.32
12
69.27
6
Beijing
73.19
3
84.85
5
65.52
20
70.02
5
Xiamen
72.82
4
87.56
3
68.05
13
63.59
22
Shanghai
72.75
5
89.66
2
65.49
21
64.04
21
Hangzhou
71.68
6
73.48
14
65.23
22
76.76
1
Zhuhai
70.99
7
83.81
6
61.08
31
69.07
7
Guangzhou
70.66
8
80.23
7
61.26
30
71.33
2
Tianjin
69.66
9
80.11
8
64.83
23
64.65
20
Dalian
69.65
10
73.49
13
68.36
11
67.27
11
Wuxi
68.96
11
80.01
9
67.32
15
59.99
37
Weihai
68.89
12
71.81
18
72.05
1
62.68
27
Qingdao
68.3
13
72.32
16
67.35
14
65.41
17
Changsha
68.06
14
66.11
24
71.07
3
66.76
13
Zhongshan
68.01
15
74.56
11
70.38
5
59.14
45
Foshan
67.89
16
72.41
15
69.49
9
61.81
32
Ningbo
67.04
17
76.85
10
58.01
45
67.11
12
Changzhou
65.95
18
71.92
17
69.04
10
56.88
51
Yantai
65.63
19
67.48
21
69.71
7
59.5
43
Nanjing
65.47
20
73.68
12
55.09
50
68.53
8
Jinan
65.25
21
62.99
28
69.49
8
62.95
24
Wuhan
64.95
22
69.34
19
58.04
44
68.02
10
Shaoxing
64.86
23
62.98
29
63.28
25
68.36
9
Chengdu
64.79
24
68.51
20
65.67
19
60.25
36
Taizhou
63.98
25
65.36
26
66.55
16
59.91
38
Shenyang
63.04
26
66.74
22
61.98
29
60.56
35
Hefei
62.98
27
60.83
32
70.05
6
57.57
48
Nanchang
62.97
28
61.28
31
57.11
47
70.81
3
Jiaxing
62.53
29
66.05
25
65.96
18
55.47
55
Yangzhou
62.51
30
64.04
27
70.55
4
52.48
57
Fuzhou
61.4
31
61.93
30
60.15
35
62.21
29
Huzhou
61.1
32
56.62
38
64.39
24
61.95
30
Wenzhou
60.52
33
59.79
33
58.31
41
63.57
23
Nantong
60.44
34
66.56
23
66.18
17
48.41
68
Xi’an
58.94
35
57.13
37
60.23
34
59.32
44
14
City
NRE City Index ranking
Resource and
environmental
sustainability
Supporting capacity
Score
Ranking
Score
Ranking
Score
Ranking
Score
Ranking
Wuhu
58.61
36
59.7
34
58.28
42
57.89
47
Hohhot
57.81
37
58.68
35
53.23
54
61.82
31
Kunming
57.69
38
43.08
53
62.97
27
66.26
14
Harbin
56.58
39
46.01
50
63.2
26
59.8
40
Zhengzhou
56.36
40
52.67
42
56.42
48
59.87
39
Changchun
55.7
41
48.57
47
60.87
32
57.15
50
Nanning
55.64
42
39.87
58
60.83
33
65.44
16
Mianyang
55.33
43
55.16
39
58.27
43
52.38
58
Zhuzhou
54.92
44
47.56
49
56.27
49
60.61
34
Xuzhou
54.91
45
54.29
41
57.87
46
52.38
59
Guiyang
54.63
46
42.94
55
50.67
60
70.18
4
Shijiazhuang
54.33
47
49.61
44
53.5
51
59.79
41
Taiyuan
54.05
48
49.45
46
47.78
63
65.17
18
Weifang
54
49
48.28
48
58.56
40
54.7
56
Chongqing
52.92
50
57.75
36
44.87
67
56.79
52
Yichang
52.89
51
39.84
59
60.01
36
57.99
46
Jining
52.86
52
50.74
43
58.74
39
48.67
67
Shantou
52.28
53
54.33
40
52.18
57
50.39
62
Yangquan
51.02
54
38.75
61
51.43
58
62.49
28
Xiangtan
50.49
55
44.73
52
46.14
65
60.67
33
Baotou
50.03
56
44.76
51
49.25
61
55.97
53
Changde
49.98
57
39.23
60
59.52
37
50.3
63
Yueyang
49.89
58
37.51
62
62.15
28
48.88
66
Kaifeng
48.9
59
36.71
65
59.13
38
49.86
64
Luoyang
48.57
60
40.42
56
53.33
53
51.41
60
Zaozhuang
48.5
61
49.48
45
53.35
52
42.4
72
Jilin
48.16
62
37.14
63
47.36
64
59.69
42
Liuzhou
48.06
63
35.05
67
44.2
68
64.77
19
Yinchuan
47.24
64
40.18
57
44.14
69
57.38
49
Handan
46.22
65
34.71
68
52.66
55
50.54
61
Changzhi
45.29
66
31.53
70
48.13
62
55.6
54
Jiaozuo
45.08
67
43.07
54
43.07
70
49.15
65
Xining
44.33
68
28.83
72
40.95
71
62.93
25
Anyang
43.5
69
36.97
64
45.18
66
48.05
69
Yibin
43.13
70
31.11
71
52.57
56
44.78
70
ürümqi
41.61
71
32.35
69
27.21
73
65.85
15
Zunyi
40.11
72
25.77
73
50.72
59
42.76
71
Shizuishan
36.3
73
35.74
66
32
72
41.4
73
15
Exhibit 8. The indicator system
How successfully do China’s cities build prosperous, livable and sustainable places for now and for the future?
NRE City Performance Index
Economic growth and development
KPIs
Resource and environmental sustainability
KPIs
Capacity improvement
KPIs
Economic density
• Economic density Efficiency of resource
consumption
• Energy intensity
• Water intensity
• Land use intensity
Resource security
Industrial structure
• Proportion of
industries with
high energy
consumption
•Proportion
of high-tech
industries
•Residents’
disposable
income per
capita
•Financial
expenditure per
capita
Circular economy
• Utilization rate of industrial
solid waste
• Industrial water recycling
rate
Infrastructure
construction
Environmental
efficiency
Information infrastructure
• Sulfur dioxide (SO2)
emissions intensity
• Chemical oxygen demand
(COD) emissions intensity
• Ammonia emissions intensity
• Nitrogen oxide emissions
intensity
Policy
• Industrial wastewater
discharge compliance rate
• Average concentration
of SO2
of NO2
of PM10
• Percentage of “blue sky” days
• Carbon emissions per capita Investment in
• Change of carbon intensity
environmental protection
Economic
development level
Environmental quality
Low-carbon
development
Innovation capacity
• Urban population
density
• Water resources per
capita
• Density of urban water
supply pipeline
• Public transport
passenger volume per
capita
• Internet penetration
• Garbage treatment
rate
• Low-carbon city or not
• Density of
environmental quality
monitoring sites
• Investment ratio of
GDP to environmental
pollution control
• Proportion of
expenditure on
education and science
• Number of high schools
Exhibit 9. NRE City Index and the distribution of scores for first-tier indicators
100
90
80
70
60
50
40
30
20
16
Overall performance
sustainability
Development capability
Key findings and insights
Our analysis points to five key insights
about China’s cities.
Insight I: Unbalanced development
but capacity to transition
According to our study, China’s urban
development is very unbalanced, and
efficient resource use, and resource
and environmental sustainability are
significant challenges.
However, there is little variation in
cities’ development capacity, even
among urban centers at different
stages of economic development (see
Exhibit 9). This suggests that a city’s
capacity to transform does not vary
much regardless of its economic status,
and that there is substantial room for
improvement across the board.
The average score of the 73 sample
cities in the NRE City Index is 58.28,
with scores ranging from 36 to 77. There
is a difference of 40.24 points between
the highest and lowest scores, indicating
considerable disparity between cities
in their development towards the new
resource economy (see Exhibit 10).
Just over 80 percent of the cities
scored 45 to 70; six cities (8.2 percent)
scored lower than 45; and only eight
cities (11 percent) scored higher than
70. The average scores of the three
first-tier indicators are less than 60,
demonstrating that there is much
room for improvement in economic
performance, resource use, resource
and environmental sustainability, and
development capability.
Insight II: More developed
cities show greater unbalanced
development
The biggest difference between sample
cities’ scores for the first-tier indicators
is in urban economic performance—
there are more than 70 points between
the highest (Shenzhen in Guangdong
Province) and the lowest (Zunyi in
Guizhou Province).
What we found for both factors is that
in more developed cities there is a larger
imbalance between economic growth,
resource use and environment quality,
whereas these factors are relatively
balanced in less-developed cities.
The gap between cities’ resource and
environmental sustainability scores
is smaller than the gap for economic
performance, with around 50 points
between the highest and lowest
scores. Over 74 percent of cities scored
between 50 and 70. Cities’ scores
were most similar for development
capacity, with only around 35 points
between the highest and lowest.
We categorized the level of development
of cities by looking at two factors: per
capita GDP and geographic location.
This is because traditionally there is a
significant difference in the level of
development between coastal cities and
those in the western inland provinces.
When categorizing cities by per
capita GDP, those with the highest
average income (above RMB70,000)
performed better than lower-income
cities in the economic, environmental
and developmental indicators.16
However, there were significant
imbalances between cities’ rankings
for resource and environmental
sustainability. These developed
cities will face great challenges in
achieving economic growth while
using resources sustainably and
protecting the environment.
Exhibit 10. NRE City Index and scores for first-tier indicators
Overall performance
Resource and
environmental
sustainability
Development
capacity
Median
57.81
57.13
59.52
59.99
Average
58.28
56.91
58.41
59.46
Minimum
36.30
25.77
27.21
41.40
Maximum
76.54
96.01
72.05
76.76
Exhibit 11. Urban economic development and the NRE City Index
Per capita GDP Number of
(RMB)
cities
Overall
performance
Economic
performance
Resource and
environmental
sustainability
Development
capacity
GDP growth
Above 70,000
26
66.92
72.30
65.18
63.56
15.21%
50,000–70,000
22
57.99
55.55
58.49
59.82
13.96%
Below 50,000
25
49.55
42.11
51.31
54.89
13.18%
17
Cities with mid-tier per capita GDP
(RMB50,000–70,000) have relatively
balanced indicators17, suggesting it may
be easier for them to move to a more
sustainable growth path in the future
(see Exhibits 11 and 12).
The differences in economic
development are also apparent when
looking at the cities in the index by
geographic location (see Exhibit 13).
Over the past 12 years, the Chinese
Government has been implementing
the “Go West” policy that accelerated
the development of central and
western China and the old industrial
base of northeast China, in an effort
to promote coordinated regional
economic growth. Despite this policy,
according to our index, there remains
a significant gap in terms of urban
development between coastal areas
and the central and western regions.
The top 20 cities in the index are the
most economically dynamic cities
in eastern coastal areas, except
Changsha in south central China.18
These cities achieved relatively
high scores for urban economic
performance, and most also scored
highly for resource and environmental
sustainability, and development
capability. Shenzhen scored the
highest, ranked first for urban
economic performance and resource
and environmental sustainability.
However, as discussed previously,
most of these highly developed cities
ranked lower (relatively) for resource
and environmental sustainability.
The 15 lowest ranking cities on the
index are all located in China’s lessdeveloped central and western regions.
With the exception of ürümqi (the
capital city of Xinjiang Province),
which has a relatively high level of
development capability, western and
central cities generally scored low in
urban economic performance, resource
and environmental sustainability,
and development capability. Most
of them ranked lower than 65 for
economic performance, lagging
far behind coastal cities in terms
of their economic development.
For example, Hangzhou (Zhejiang
Province) is ranked 22nd; Guangzhou
and Zhuhai (both in Guangdong
Province) are ranked 30th and 31st,
respectively; and Nanjing (Jiangsu
Province) is ranked 50th, while its
economic performance ranked in the top
12. These cities’ rankings for resource
and environmental sustainability lag
behind their economic performance,
highlighting the urgent need to
promote a balance between economic
development, and resource and
environmental sustainability.
Exhibit 12. Urban performance from the perspective of per capita GDP
75
70
65
60
55
50
45
40
sustainability
Development capacity
Above RMB70,000
18
RMB50,000–70,000
Below RMB50,000
Exhibit 13. Geographic distribution of composite scores in the NRE City Index
Legend
Data unavailable
>75
65–75
55–65
45–55
<45
Exhibit 14. City population and the NRE City Index
City size/
administrative
level
Number of
cities
Overall
performance
Economic
performance
Resource and
environmental
sustainability
Development
capacity
GDP growth
10 million+
people
6
69.29
81.44
62.27
64.95
13.38%
3–10 million
people
21
64.41
67.73
63.46
62.21
14.28%
1–3 million
people
35
55.34
50.68
56.66
58.46
14.51%
400,000 to
11
1 million people
49.91
42.71
52.25
54.40
13.10%
19
Insight III: Mid-sized cities have
the greatest potential to steer a
new path
We categorized the cities in the index
by size and found that cities with
between 1 million and 3 million
inhabitants enjoy relatively balanced
development (see Exhibit 14). This
makes them key centers for future
urbanization and gives them a sound
foundation to transition to the NRE.
However, it will take dedicated efforts
by governments and stakeholders to
ensure this potential is realized.
The data collected for the index
also showed that the larger the
population of a city gets, the greater
the environmental degradation. The
largest category of cities—those
over 10 million people—are most
affected by issues such as water
shortages, traffic congestion and
air pollution, and thus face more
significant challenges in resource
and environmental sustainability
(see Exhibit 14). On the other hand,
the largest cities scored higher for
infrastructure, information technology
and intelligence, and technological
innovation because they have more
sophisticated physical infrastructure
and human capital (see Exhibit 14).
When looking at the overall
performance of China’s six largest
cities, Shenzhen ranked first, Beijing
third, Shanghai fifth, Guangzhou
eighth and Tianjin ninth, while
Chongqing ranked 50th.
However, it is worth noting that
compared with the indicators of
economic performance and development
capacity, the four municipalities
directly under the Central Government
(Beijing, Chongqing, Shanghai and
Tianjin) ranked lower for resource and
environmental sustainability. Beijing,
Shanghai and Tianjin ranked below
20 for environmental sustainability,
while Chongqing ranked 36th and
52nd respectively for urban economic
performance and development
capability, compared to 67th for
Although medium-sized, cities currently
have a better balance between
economic development, resource use
and the environment, they urgently need
to enhance their development capacity
and IT infrastructure, and improve
resource and environmental efficiency.
Otherwise, future environmental
deterioration may hinder their economic
growth. At the same time, larger
cities should apply their enhanced
development capabilities to creating
more sustainable platforms for growth.
Exhibit 15. City population and the NRE City Index
90
80
70
60
50
40
sustainability
10 million+ people
20
3–10 million people
400,000 to 1 million people
Exhibit 16. The economies of China’s megacities
120
109
107
100
78
80
80
78
60
40
32
20
0
Shanghai
Beijing
Chongqing
Tianjin
Guangzhou
Shenzhen
GDP per capita (thousand yuan)
Exhibit 17. Performance of different-sized cities across the indicators of resource and environmental sustainability
Resource efficiency
Low carbon level
75
70
65
60
55
50
45
40
35
Environmental quality
10 million+ people
Recyclable economy
Environmental efficiency
400,000 to 1 million people
21
National Planning of Main
Functional Areas
19
National Planning of Main Functional
Areas, released by China’s State Council
in 2011, is a long-term strategy that
promotes a national spatial development
system to ensure coordinated population
and economic growth, resource use and
environmental efforts. The strategy also
aims to accelerate China’s harmonious
urbanization, promote long-term social
stability and encourage rapid yet
sound economic growth. The strategy
includes stringent environmental
policies to ensure the country avoids
the traditional path of developing
at the cost of the environment.
Areas recognizes that each region has
a unique economy and development
model based on its natural resources
and environmental loading capacity. By
dividing the country into development
regions, the government can more
effectively control rates of development
to ensure a better geographical balance.
22
The four types of
development regions
Optimized development regions
are urbanized areas with relatively
developed economies, dense populations
and high-intensity development. They
also face major challenges around
environmental sustainability and
resource security, and thus need to be
optimized for future industrialization
and urbanization.
Key development regions are urbanized
areas that have a relatively solid
economic base, abundant resources and
high environmental loading capacities,
as well as strong development potential,
and sound demographic and economic
conditions. These regions will be key
areas for future industrialization and
urbanization.
The government’s plans for development
in optimized development regions and
key development regions are similar,
only differing in terms of development
intensity and models. Key development
regions in coastal provinces have
the advantage of relatively mature
economies and access to natural
resources that will enable their
transition to a new resource economy,
so urbanization efforts should focus on
these areas.
Restricted development regions are
divided into agricultural areas and
areas under ecological protection.
The government limits large-scale,
high-intensity industrialization
and urbanization in these regions
to ensure national agricultural
security, sustainable development
and ecological preservation.
Prohibited development regions
are areas where natural and cultural
resources are protected by law. These
places also include key ecological
areas where industrialization and
urbanization are prohibited to
ensure environmental protection.
23
Insight IV: Poorly targeted
urbanization is counterproductive
in the long term
In 2011, China’s State Council released
Areas, which divides the country
into four categories: optimization
development regions, key development
regions, restricted development regions
and prohibited development regions
(see feature on page 22). Regions are
categorized according to their resource
and environmental capacity, existing
development intensity, potential for
future development, and capacity to
support large-scale, high-intensity
industrialization and urbanization.
Within the NRE City Index, cities
classified as optimized development
cities ranked highest overall, followed
by key development cities (see Exhibits
18 and 19). Future regional urbanization
should focus on key development cities,
as these locations are best positioned
for sustainable expansion.
According to the index, inland cities
in key development regions generally
do not perform as well economically
as cities in coastal areas, but their
environment is less damaged. With the
proliferation of high-speed railways,
highways and logistics networks, and
the increased availability of high-speed
internet, these inland cities can now
more easily connect with international
markets that will support future
economic growth.
Cities in optimization development
regions scored higher in areas such
as economic strength, resource
and environmental efficiency,
and infrastructure. However,
they also face challenges such
as environmental deterioration
and resource security, which may
hinder their future development.
Within the optimization development
regions, there are score variations
between the cities of the Pearl
River Delta, those of the Yangtze
River Delta and the Bohai Economic
Rim area. Pearl River Delta cities
scored highest in urban economic
performance. There was no significant
ranking difference between the
three regions in terms of resource
and development capability. The
Pearl River Delta also scored higher
for environmental quality, but lower
for its development as a circular
economy. There was no significant
difference between the three regions’
scores for development capability.
Exhibit 18. Main functional area positioning and the NRE City Index
Main
functional
areas
Regions
Overall
performance
Economic
performance
Resource and
environmental
sustainability
Development
capacity
GDP growth
Optimized
development
regions
Pearl River
Delta
70.82
81.40
66.77
64.84
14.75%
Bohai Economic 68.34
Rim
73.83
67.12
64.30
15.45%
Yangtze River
Delta
66.26
71.74
65.03
62.24
13.52%
Coastal areas
59.60
59.63
59.56
59.60
13.41%
Inland regions
52.84
46.88
53.46
57.97
14.20%
Other
51.02
43.69
54.84
54.09
13.94%
Priority
development
regions
Other regions
24
Exhibit 19. Main functional area positioning and the NRE City Index
80
75
70
65
60
55
50
45
40
Optimization development regions
Priority development regions
Other regions
Exhibit 20. Strategic layout for urbanization
North of Tianshan Mountains region
South and center area of Hebei
Taiyuan City group
Hohhot–Baotou–Erdos–Yulin Economic Zone
Guanzhong–Tianshui area
Economic Zone along
the Yellow River in Ningxia
Ha Chang area
Lanzhou–Xining region
Bohai Economic Rim
East Longhai region
Central Plains Economic Zone
Jianghuai region
Yangtze River Delta region
South and central
region of Tibet
Yangtze River region
Chengdu–Chongqing region
Central Yunnan area
West Coast Economic Zone
Central Guizhou area
Pearl River Delta region
Major urbanized areas
Beibu Gulf Economic Rim
South China Sea Islands
Source: National Planning of Main Functional Areas, State Council of China, 2011.
25
Insight V: Resource-based cities
must change their development
path
Cities that depend on one or two
major industries, mainly resources
industries like mining, oil, coal and steel
manufacturing, for their rapid economic
growth show more unbalanced
development (see Exhibits 21 and 22).
To achieve ongoing and sustainable
economic development, these cities
need to implement strategies to
diversify their economies.
These cities ranked far lower on
the NRE City Index than cities with
broader industrial bases. They received
significantly lower scores for first-tier
indicators (economic performance,
resource and environmental
sustainability, and development
capacity) and second-tier indicators,
with the exception of environmental
protection efforts. This indicates that
these cities are too reliant on resourcebased industries, and may face serious
development problems in the future.
They are also characterized by a lack
of economic diversity, poor innovation
capabilities, unsustainable economic
growth, resource and environmental
inefficiency, underdeveloped progress
towards a low-carbon economy, and
limited infrastructure and application
of information technology. For these
reasons, it is particularly urgent to
accelerate transformation efforts in
resource-based cities.
Detailed analysis for
different types of city
In the previous section, we looked
mainly at the overall index results
in terms of the three dimensions of
economic performance, resource
and development capacity. However,
to accurately identify the issues
cities face, we must look further
than these three dimensions.
Under the first-tier indicator of resource
and environmental sustainability, there
are five second-tier indicators: resource
use efficiency, a circular economy,
environmental quality, environmental
efficiency and low-carbon development.
Resource use efficiency, environmental
quality and environmental efficiency
in particular reflect the Chinese
Government’s key targets of
enhancing energy conservation,
building a more resource-efficient
society and achieving environmentally
sustainable development.20
In the NRE City Index, we calculated the
second-tier indicator of resource use
efficiency based on energy, water
and land consumption per GDP unit,
which is a key indicator of sustainable
urban development.
Because improving energy efficiency is
a top priority for all Chinese cities, we
have coupled economic performance
(in the first-tier indicators) with
resource use efficiency and
environmental quality (in the secondtier indicators) to group cities together
based on common characteristics.
Through this analysis, we have identified
four types of city (see Exhibit 23).
Exhibit 21. Comparison between the index rankings of resource-based and non–resource based cities
Type of cities
Overall
performance
Economic
performance
Resource and
environmental
sustainability
Development
capacity
GDP growth
Resource-based
cities
45.40
38.88
46.77
50.26
12.46%
Non–resource
based cities
59.43
58.53
59.46
60.29
14.29%
26
Exhibit 22. Comparison between the index rankings of resource-based and non–resource based cities
65
60
55
50
45
40
35
30
Non–resource based cities
Resource-based cities
Exhibit 23. Types of city based on the NRE City Index
City type
Economic
performance
Environmental
quality
Resource use
efficiency
Selected cities
Balanced
>60
>65
>60
Dalian, Changzhou, Nantong, Yangzhou,
Fuzhou, Yantai, Weihai, Guangzhou,
Shenzhen, Foshan
<60
Ximen, Zhuhai
>60
Beijing, Tianjin, Shenyang, Suzhou, Hangzhou,
Ningbo, Shaoxing, Jinan, Qingdao, Changsha
<60
Nanjing, Wuhan, Chengdu
>60
Huzhou
<60
Hohhot, Changchun, Jilin City, Wuhu,
Yichang, Yueyang, Nanning, Liuzhou,
Kunming, Yinchuan
>60
Xuzhou, Wenzhou, Weifang, Jining
<60
Handan, Baotou, Zaozhuang, Kaifeng,
Luoyang, Anyang, Jiaozuo, Zhuzhou,
Xiangtan, Zunyi, Xining, Shizuishan
Wealthy
Potential
Conventional
>60
<60
<60
<65
>65
<65
Note: By considering its overall distribution, index scoring is classified into two categories. Because demarcation is slightly higher than the median, cities
scoring above and below the dividing line account for 40 percent and 60 percent respectively.
27
Balanced cities
These cities are characterized by
balanced economic growth, resource
development capacity, good economic
performance, environmental quality
and efficiency, and better prospects for
achieving sustainable economic growth.
Balanced cities include the three
megacities of Shanghai, Guangzhou
and Shenzhen; 11 second-tier coastal
cities in optimization development
regions; and Xiamen and Fuzhou (Fujian
Province)—both in the West Coast
Economic Zone.
Of the 14 cities with the highest scores
for resource efficiency, 11 have a
per capita GDP of over RMB70,000.
With a lower economic density than
other major coastal cities, they have
a smaller environmental impact, and
enjoy better environmental quality, more
coordinated economic development,
and greater resource and environmental
sustainability.
Balancing economic
growth in Xiamen
Xiamen is a vibrant harbor city ranked
fourth overall among the 73 cities
on the NRE City Index. It is ranked
third for economic performance,
13th for resource and environmental
sustainability, and 22nd for development
capacity. Despite limited water and land
resources, Xiamen stands out for its
superior geographic location, highquality natural environment (for which
it is ranked fourth), strong economy and
low carbon emissions (for which it is
ranked 10th).
However, there is room for improvement
in terms of development capacity.
In the second-tier indicators related
to resource and environmental
28
However, most of these cities are at
the prefecture level, and unlike the four
megacities governed directly under the
Central Government, they have limited
budgets to fund urban infrastructure
and environmental initiatives. Therefore,
it is important that these cities
enhance their information
technology capabilities and increase
efforts to maintain resource and
Zhuhai and Xiamen are the topscoring balanced cities in terms of
environmental quality; however, their
resource and environmental efficiency
is lower than their counterparts in
this category. For these cities, further
urban development may lead to overuse
of resources and poor environmental
quality, and will hinder these cities’
progress in the new resource economy.
sustainability, Xiamen ranks 34th for
resource use efficiency and 28th for
environmental efficiency.
With per capita water resources barely
higher than one-third of the national
average, Xiamen also ranks poorly (61st)
for resource security. While the city is
taking steps to improve its water supply,
it may need to take more comprehensive
action to facilitate sustainable growth.
Zhejiang
Jiangxi
Fujian
Xiamen
Wealthy cities
Wealthy cities are mainly located in the
megalopolises of the Yangtze River Delta
and the Bohai Economic Rim area, as
well as large cities in the megalopolises
of the middle reaches of the Yangtze
River and the Chengdu–Chongqing
cluster. These are China’s economic
powerhouses. For example, nearly twothirds of these cities are supercities
with populations of 3–10 million people.
This accounts for almost half of the
supercities in the NRE City Index,
including two megacities, Beijing and
Tianjin, in northern China.
With the exception of provincial capital
cities such as Nanjing of Jiangsu
Province, Wuhan of Hubei Province,
Chengdu of Sichuan Province and
Nanchang of Jiangxi Province, wealthy
cities are well placed to move to new
resource economies. However, some
of these cities, including Beijing,
Tianjin and Nanjing, face severe
challenges related to pollution
and water scarcity which could
hamper future development.
These cities are hives of economic
activity. However, economic
development is being prioritized over
environmental quality, which is putting
pressure on resource supply.
Managing conflicting
forces in Shaoxing
Famous for its historical and cultural
heritage, Shaoxing boasts a robust
economy and a relatively wellmaintained environment. With its strong
development capacity and access to
natural resources, Shaoxing has the
potential to enjoy balanced development
into the future.
Shaoxing ranked 23rd among the
73 cities surveyed in the NRE City
Index. Specifically, it ranked 29th
in economic performance, 25th
in environmental sustainability
and 9th in capacity building.
However, Shaoxing’s goals of economic
development and environmental
protection are increasingly coming
into conflict. The city’s key industries
require hundreds of production plants
including wineries, breweries and
dye factories, which have a negative
impact on the environment.
For example, the dye industry is a
heavy polluter and the inappropriate
disposal of waste products adversely
affects water quality. This, in turn,
hinders the development of other
industries that require access to
high-quality water supplies.
Shaoxing is now at a critical point in
achieving balanced economic growth.
Its fast-developing industries are
making their mark on the environment,
and the government should consider
ways to intervene in the areas of
environmental protection and resource
management.
Anhui
Zhejiang
Jiangxi
Shaoxing
By implementing appropriate
safeguards, Shaoxing can harness
the potential of its natural resources
and geography to expand its
industries and pursue a path of
sustainable development.
29
Potential cities
These cities are in a sustained
growth phase, and are characterized
by a moderate level of economic
development, good environmental
quality, and low resource and
environmental efficiency.
Most cities in this group—aside from
Changchun (Jilin Province), Huzhou
(Zhejiang Province) and Shantou
(Guangdong Province)—are economic
hubs in central and western China.
Huzhou and Shantou are part of
megalopolises in the Yangtze River
Delta and Pearl River Delta. These
cities generally lag behind the major
cities in coastal areas and central and
western regions in terms of economic
development, but they feature low
economic density and moderate
environmental quality.
Moving up the value chain
in Nanning
Nanning is the capital of the Guangxi
Zhuang Autonomous Region in southern
China, and is known as the “Green City”
because of its abundance of lush tropical
foliage. It is a highly livable city and has
great potential for sustainable urban
development. Nanning is ranked 42nd of
the 73 cities on the NRE City Index. It is
ranked 58th for economic performance,
33rd for resource and environmental
sustainability and 16th for development
capacity. Despite its potential for
development, Nanning has failed to strike
a balance between the three dimensions—
it does not have sufficient development
capacity to support economic growth, and
resource and environmental sustainability.
Unlike other capital cities, Nanning’s
economy is sustained by its service
industry, which accounts for over
50 percent of its economy. The city is
the center of science and technology,
education, culture and health in Guangxi
Province. However, among the 24 capital
cities involved in this study, Nanning’s
30
Potential cities include the resourcebased cities of Yangquan (Shanxi
Province) and Changzhi (Shangxi
Province), and 11 large cities with a
population of between 1 million and
3 million people. Eleven of the 16
potential cities are located in key
development regions: Changzhi, Hohhot,
Changchun, Jilin, Wuhu (Anhui Province),
Yueyang (Hunan Province), Shantou,
Nanning, Mianyang (Sichuan Province),
Kunming and Yinchuan. The potential
cities of Huzhou, Wuhu, Yichang and
Yueyang are located in megalopolises
in the Yangtze River Delta and the
middle stream of the Yangtze River.
However, a key obstacle for these
cities is their inefficient use of
resources, which is closely related to
their underdeveloped infrastructure,
inadequate capacity for innovation,
and slow progress in technology
development and application. Due
to these inefficiencies, potential
cities will face enormous pressure on
resources and dramatic environmental
deterioration. They must prioritize
improving resource and environmental
efficiency and focus on decoupling
economic development from
environmental degradation.
Potential cities are among the most
promising in terms of resource security
and development potential. For
instance, 10 cities (Jilin, Huzhou, Wuhu,
Yichang, Yueyang, Nanning, Liuzhou,
Mianyang, Yibin and Kunming) scored
more than 65 on the NRE City Index
for resource security. These cities will
play an important role in forming major
megalopolises and in China’s overall
sustainable development.
economic performance ranks third lowest.
Nanning is currently seeking more highend, high-value business opportunities
to unlock new sources of growth for its
service industry.
While the city’s economy is not currently
growing fast, its unique ecological
conditions and high level of access to
resources will see it develop rapidly
in the future. Furthermore, Nanning’s
service-based economy will ensure
better environmental quality than in
cities that rely on industries such as
construction and manufacturing. Liuzhou,
the largest industrial city in Guangxi
Province, accounts for one-third of
the overall industrial capacity of the
province, protecting Nanning from the
environmental pollution and degradation
of industrialization.
With its sub-tropical monsoon climate
and evergreen plants, Nanning is ranked
13th for environmental quality. However,
its relatively low resource use efficiency
may diminish environmental quality
in the future. In addition, Nanning is
only ranked 61st for policy execution,
Hunan
Guizhou
Guangxi
Guangdong
Nanning
Hainan
which highlights its inadequate efforts
to improve environmental quality.
Fortunately, its low-carbon development
(for which it is ranked second) and access
to resources (for which it is ranked
13th) will aid its future development.
To take advantage of the absence of
heavy industry, Nanning should enhance
its citizens’ awareness of environmental
protection, improve resource and
environmental efficiency, maintain its
low-carbon development efforts, secure
its access to resources and prepare for
rapid development.
Conventional cities
These are typically resource-based
cities with relatively low levels of
economic development, and poor
environmental quality and efficiency.
Their future development must be
carefully planned and managed if
they are to avoid China’s traditional
development model of economic growth
at the cost of the environment.
Most of the conventional cities—
including Handa, Zaozhuang,
Jiaozuo and Shizuishan—are located
across 14 key development regions.
Their transition to the NRE is of
great significance to China’s urban
development and resource and
environmental sustainability, and its
progress as a successful society.
Conventional cities tend to be industrial
cities in central and western China,
but the group also includes eight
capital cities in the north and west.
With the exception of Zaozhuang,
Weifang (Shandong Province), Jining
(Shandong Province) and Anyang, all
Helping Shizuishan become
a low-carbon economy
Shizuishan is a northern city
dominated by its coal industry, and
has poor economic, environmental and
development capacity performance.
It is ranked lowest of the 73 cities
on the NRE City Index. Shizuishan
ranks 66th for economic performance,
73rd for resource and environmental
sustainability, and 72nd for development
capacity. Despite its low overall
development, Shizuishan has a relatively
high per capita fiscal expenditure,
and achieved a mid-level score for
resource accessibility, indicating great
potential for development. If it can
use its capital and resources more
efficiently in future, the city could
rise to the middle of the index.
other cities in this group are located
in key development regions. They are
mainly large and medium cities with
populations below 3 million and a per
capita GDP of less than RMB50,000.
Since heavy manufacturing and
chemical industries account for a large
proportion of their economies, these
cities perform poorly in the areas
of economic growth, environmental
efficiency and environmental quality.
Sixteen conventional cities received low
scores for resource use efficiency.
Cities in this group rely too heavily
on natural resources, resulting in
environmental degradation and
unbalanced industry structures. Low
levels of technology development and
innovation make it difficult for them
to reduce this reliance. As such, it is
essential for these cities to accelerate
their transformation into new resource
economies by enhancing technological
innovation, and decoupling their
economic development from resource
use and environmental impact.
Known as the “Frontier Coal City”,
Shizuishan is a major coal producer and
the base for energy, heavy chemicals
and raw material production in Ningxia
Province. As the province’s industrial
hub, Shizuishan has abundant mineral
resources, including large reserves
of anthracite. Rich in electric power
resources, its per capita generation
capacity exceeds China’s average.
Yet its primitive urbanization,
infrastructure and large-scale
industrial construction have caused
substantial environmental damage.
Shizuishan is currently transitioning
from a high-carbon to a low-carbon
economy. Since 2004, 98 small polluting
enterprises have been shut down and
64 companies with outdated technology
and overcapacity have been phased
out. The city has deployed centralized
heating systems, promoted clean energy
and completed more than 750 industrial
pollution control projects. After almost a
decade of improvement efforts, quality
of life and the natural environment
have greatly improved in Shizuishan.
Inner Mongolia
Shizuishan
Gansu
Ningxia Hui
The Chinese Government identified
Shizuishan as one of the first resourceexhausted cities and a pilot city
for the circular economy. But as a
city built around coal production,
Shizuishan has a long way to go in
solving its ecological challenges, and
harmonizing economic development
and the natural environment.
31
Part 3
Carving out a new path
The transition to an NRE is a long
journey involving numerous complex
decisions; it calls for long-term
involvement and joint efforts by
multiple stakeholders.
Innovation in policy and
strategy
In the next phase of our research
program, we will consult city planners
and managers, industry and business
leaders, and think tanks to discuss how
cities plan their path of transformation,
establish their positioning, set goals and
take action.
Strategy and governance
To stimulate these discussions, we
have identified three broad areas of
innovation that we believe can help
China’s cities start the transition to the
NRE model and more sustainable growth
patterns:
•innovation in policy and strategy
•innovation in technology
•innovation in cross-sector and crossregional cooperation.
The first area of innovation covers three
key challenges facing Chinese cities.
The transition of cities to an NRE model
requires a deliberate strategy, and a set
of policies and plans. This means China’s
city authorities and planners will need
to take a long-term view, and take into
account economic, resource, social and
cultural factors.
Many of China’s cities reflect a
formulaic approach to master planning,
very much a legacy from the middle
of the last century. As statements of
power and visions of grandeur they
hold their own, but wide boulevards
and ambitious road infrastructure
do not lend themselves to the level
of urban density needed to achieve
sustainable urban environments. City
planners need to consider how their
residents interact with the city and,
in turn, how they can influence and
encourage more sustainable resident
behaviors through the city’s design.
China’s city planners need to move
beyond the traditional definition
of master planning that has limited
itself only to the built environment.
Instead they should start to consider
integrating the city’s digital
infrastructure planning with the
city’s physical planning, to enable
the development of more efficient
and innovative services that leverage
insights from previously untapped
data resources. By bringing together
physical and digital infrastructure
considerations during master planning,
and embedding technology into a
city’s master planning design and
operation, a city can better drive
social, economic and environmental
value, and ultimately achieve
improved sustainability outcomes.
Exhibit 24. Policy options to set energy efficiency targets
Push mechanisms
Pull mechanisms
Binding targets
Non-binding targets
Voluntary programs
Industry mandates
Incentives and subsidies
Minimum standards
Energy labels
Taxation
Tax incentives
Education campaigns
32
Cities that are designed to integrate
across multiple infrastructure layers can
help facilitate information exchange
between previously isolated sectors
and services such as energy, water,
waste and transportation, and further
enrich the master plan of the city by
integrating strategies and roadmaps to
respond to future growth.
This approach can help cities serve
citizens more effectively and break
down traditional silos in service
delivery. Chinese cities should move
towards integrated governance
structures where multiple city
departments such as energy, water,
waste, building, transportation and
culture coordinate their activities
to achieve sustainable outcomes.
Promoting energy efficiency
Helping cities become more energy
efficient is a key enabler in achieving
balanced development; it is also the
fastest and most convenient way to
reduce a city’s carbon emissions.
According to the Twelfth Five-Year
Guideline (2011–2015), the Central
Government aims to achieve the
following by 2015:
•decrease energy consumption per unit
of GDP by 16 percent
•increase the proportion of non-fossil
energy in primary energy consumption
by 11.4 percent by 2015
•reduce CO2 emissions per unit of GDP
by 17 percent.
In terms of enhancing energy efficiency,
Chinese authorities at the city,
provincial and national level play the
central role. In addition to setting
detailed energy efficiency targets, they
need to implement policies that reduce
energy use by businesses and citizens
(see Exhibit 24).21
Changing citizen behavior is central
to improving energy efficiency
outcomes. However, this will require
intensive communication efforts.
According to recent Accenture
research, only 26 percent of Chinese
consumers surveyed said they knew
about programs that help reduce
their electricity consumption.22
Financing and investment
China will need to undertake massive
investment to build the infrastructure
to support balanced urban development.
According to McKinsey & Company,
cities with populations below 10 million
require around RMB2.2 trillion in
funding every year to build and maintain
local infrastructure, public facilities and
publicly owned buildings.23
Traditionally, the main source of
financing for Chinese cities has been
land leasing. However, this limits
access to finance, and can also lead
to overdevelopment and drive up
property prices. Land leasing typically
accounts for around 60 percent of local
government revenue.
Further, it may take some time for cities
to see a return on public infrastructure
investment. Because of this, local
governments must diversify financing
channels through measures such as
establishing equity investment funds,
developing municipal bonds, and
encouraging and attracting private
investment. In addition, tax reform can
help finance urban development.
Innovation in technology
Information and communications
technologies are permeating the
physical world, creating a connected,
digital parallel in transport, buildings,
energy, water and citizen services.
Important technologies include
intelligent infrastructure, machine-tomachine communication (also called
the “Internet of Things”), smart devices,
mobility, big data and analytics, cloud
computing and social media.
Digital technologies are connecting
all elements of cities, encompassing
citizens, public services, businesses,
economic activity, buildings, transport,
education and utilities including energy,
water and waste.
Alone, each of these new digital
technologies provides opportunities
to increase efficiency and deliver
new services. Together, these digital
technologies can help support cities in
their transition to the NRE model.
China’s recently announced Broadband
Strategy supports the digital
transformation of cities.24 According to
this policy, by 2020 all urban households
in China will have broadband access and
urban broadband speeds will reach
20 megabytes per second, enabling new
kinds of data services for consumers,
industry, education and culture.
Another major digital infrastructure
investment is the commitment of State
Grid and the Chinese Government to
roll-out smart grids to all Chinese
households to optimize electricity
supply.25 Information generated through
this intelligent infrastructure will help
match and manage electricity supply
and demand, reduce surplus generation,
and enable the transition to new and
renewable forms of energy production
while supporting the growing needs of
citizens and businesses.
Involving citizens through technology
could result in the greatest near-term
opportunities for new kinds of services
and problem solving for Chinese cities.
Recent estimates put the number of
mobile internet subscribers in China at
420 million, and that of social media
users at 597 million, or 91 percent of all
internet users.26, 27
However, it is the data itself that may
become the most powerful enabler
of the NRE. For the first time, city
planners and government authorities at
the city, provincial and national level
can use advanced “Big Data” analytics
to extract insight from information
sources that have traditionally been
too expansive or complex to tackle. Big
Data will also provide the opportunity
to establish and monitor a set of
indicators for balanced development.
So, how do all these factors come
together to support growth, reduce
resource use and improve environmental
sustainability?
33
Take the example of energy consumption
in city buildings. This currently accounts
for one-third of China’s total power
use.28 As massive construction projects
continue apace, energy consumption
will remain on an upward trajectory.
New digital automation and intelligent
control systems are now available to
make buildings more energy efficient
and reduce operating costs. Over the
coming years, smart grids will connect
more and more buildings, allowing the
use of advanced sense and control
capabilities to further optimize energy
use. In addition, this can help automate
the management of essential functions
such as maintenance, water treatment
and waste disposal. Digital information
for building workers and residents can
provide education on energy efficiency
and also form the basis of new kinds
of products such as service contracts
that incentivize lower energy use and
are based on the individual needs of
consumers and businesses.
Exhibit 25 provides an overview of
10 digital technologies that we predict
will be central to helping create China’s
digital cities.
Innovation in models of
cross-sector and crossregional cooperation
For Chinese cities, regional-based
ecological protection and cross-regional
cooperation—including through inter-city
collaboration and knowledge-sharing
platforms—are the keys to achieving
sustainable urban development. For
example, preserving water supplies
and maintaining air quality depends on
cooperation among cities.
The government plays a leading
role in China’s urban development
and management. The harmonious
development of future cities will require
effective cooperation between the
private and public sectors; increased
participation by enterprises in urban
policymaking, financing, infrastructure
development and strategic planning;
and a bigger role for the private sector
generally. This high-level planning will
help reduce overlapping developments
and inefficient investment.
To enable this process, the government
should also provide incentives to
encourage the involvement of citizens
and businesses. Sharing innovation both
at the policy and program level will help
create knowledge- and data-sharing
platforms among cities, which will
also allow businesses and citizens to
play a greater role in urban planning.
For example, the utilities sector could
work with property developers and
building management companies
to improve energy efficiency in
buildings. The ICT industry could
collaborate with public transport
departments to implement more
innovative transport solutions.
With China continuing to grow
rapidly, governments, businesses
and other stakeholders must act
promptly. By working towards
sustainable growth, Chinese cities
will develop effective long-term
patterns for urban development,
which will result in increased incomes,
higher living standards and more
effective environmental protection.
Exhibit 25. Ten near- and mid-term digital technologies and solutions to enable digital cities29
Digital technology
Description
Benefits
Years to
mainstream
adoption
2 to 5 years
Information and communications
Smart Governance
Framework
Administrative approach that applies and
integrates information, communications
and operational technologies with planning,
management and operations functions
Operational cost savings through
integration of operations, new services and
faster responses to citizens requirements
“Big Data” analytics
and large-scale
information
processing and
management
Analysis and management of extremely
large data sets
Generate insights into the complex patterns 2 to 5 years
driving economic value creation, resource
use and environmental sustainability.
Provide the ability to track and report on
integrated KPI sets
34
Digital technology
Description
Benefits
Years to
mainstream
adoption
“Internet of Things”
Phase 1: Generate insights and value from
data sourced from sensors in infrastructure
and public and private assets
Job creation, city growth and enhanced
environmental benefits
5 to 10 years
Phase 2: Combine these insights with
people, processes and systems—the true
“smart city”—as buildings, transport,
utilities and other services all become
connected
Buildings
Reporting and
benchmarking of
building data
Reporting on building performance
Data is available for a range of uses by
national and urban authorities, developers,
and building owners
2 to 5 years
Integrated building
automation and
control systems
Integration and optimization of the
management of heterogeneous building
infrastructure equipment based on
proprietary and open standards
Building owners will see cost improvements
of up to 40 percent based on reductions in
resource use
5 to 10 years
Demand-side
management and
consumer energy
management
Analytics-enabled improved peak load
management through peak sharing,
better matching supply and demand.
Help consumers optimize energy use.
Measures include optimized generation
and consumption based on factors such as
pricing signals and the weather
Lower energy prices and energy savings for
customers. Homes avoid grid electricity
when the price is right. New service and
revenue opportunities for utilities
2 to 5 years for
demand-side
management; 5 to 10
years for consumer
energy management
Distribution network
management control
Collection of applications designed to
monitor and control the entire distribution
network efficiently and reliably
On average, utilities can save 3 percent to
7 percent in grid electricity and improve
reliability of supply
2 to 5 years
Two-way communications between usage
meters manages the data lifecycle and
provides information to customers and
utilities
Utilities benefit from improved billing
revenue management, time-of-use pricing,
distribution network analysis and outage
reporting. Customers can save money and
reduce emissions
2 to 5 years
Energy
Energy and water
Advanced metering
infrastructure
Transport
Intelligent transport
systems
Transfer information between systems
Greater capacity and lower congestion,
for improved efficiency, safety and
lower energy use and carbon emissions.
environmental sustainability. These systems Greater safety and speed of systems
include traffic management systems,
information and warning systems installed
in vehicles, and cooperative ITS applications
involving vehicle-to-infrastructure and
vehicle-to-vehicle communications.
2 to 5 years
Mobile and Web 2.0
for transport
Websites, and mobile and social media
Lower congestion and associated emissions.
applications that find alternative routes and Citizens have new service options
support location-based services
2 to 5 years
35
Tianjin leads future urban
development
30
Tianjin is one of China’s fastest growing
cities in terms of economic and
population growth (see Exhibit 26).
The city’s per capita GDP surpasses
many countries including Russia and
Brazil, and its population of close to
13 million people is expected to grow
by 500,000 a year. In 2011, Tianjin’s
per capita GDP was RMB79,556,
slightly greater than Beijing’s.
Tianjin is also the main maritime gateway
to Beijing, and trades with more than
600 ports in 180 countries. This has
helped secure the city’s position as a
leading manufacturing hub in China.
The city ranked 9th overall in the
NRE City Index. Tianjin performed
8th in economic performance,
20th in development capability
and 23rd in resource and
Tianjin’s lower scores in development
capability, and resource and
environmental sustainability
indicate that its urban development
to date has been unbalanced.
In 2012, Tianjin was selected as the first
Champion City of the World Economic
Forum’s Future of Urban Development
initiative. This gave the city high-level
access to industry leaders and experts,
to address the city’s urban development
challenges and goals. This process
involved sharing the best practices of
global cities, contributing insights about
Tianjin’s service industry and urban
transport development, and offering
advice and suggestions for the city’s
future development.
As part of this initiative, the World
Economic Forum, Tianjin Municipal
People’s Government, the China Center
for Urban Development, local and
regional stakeholders, and steering
and advisory board members from the
Future of Urban Development initiative
undertook a seven-step process to devise
strategies for the city. The two key areas
of focus were easing traffic congestion
and growing the services sector.
In developing the services industry, the
following recommendations were put
forward. Tianjin should:
• brand itself as a dynamic location to
promote its services sector, and attract
talented workers and investments
• cultivate and support all kinds of small
and medium-sized enterprises
•launch service industry–oriented
courses by partnering with local
universities.
As Tianjin implements the
recommendations and gains further
experience through the program, lessons
learned there will be applied to other
cities in China through collaboration with
the China Center for Urban Development.
Exhibit 26. Tianjin economic growth 2000–201130
100,000
50
90,000
45
80,000
40
70,000
35
60,000
30
23.6
50,000
19.4
40,000
30,000
10.3
25
22.3
19.7
20
11.7
16.7
13.8
20,000
16.7
10
11.5
6.7
10,000
5
0
0
2000
2001
GDP per capita (yuan)
36
15
2002
2003
Growth rate (%)
2004
2005
2006
Year
2007
2008
2009
2010
2011
%
RMB
In the area of transport, the following
recommendations were put forward.
Tianjin should:
• promote the development of an
intelligent transportation system—one
that uses hardware and software to
provide real-time traffic management
services—and improve the operating
efficiency of the city’s road network
• better coordinate land-use and
transport planning
• enhance the efficiency of its public
transport system.
37
Research methodology
Building on existing
research
To develop the NRE City Index, we
drew on leading China-based and
global research.
The methodology we used followed
on from the report New Energy
Architecture: Enabling an Effective
Transition32, which was developed by the
World Economic Forum in collaboration
with Accenture. This research report
included the Energy Architecture
Performance Index, designed to help
countries monitor the transformation
of their energy systems. However,
the index did not take a city-based
approach to examining a country’s
energy architecture.
The ideas and methods from the New
Energy Architecture research fit neatly
with the goals of the NRE City Index.
Both set out to analyze how China is
transitioning to a more sustainable
economy—one where economic growth
is decoupled from resource depletion
and environmental degradation.
Many national and international
organizations have conducted extensive
research on China’s economy and its
sustainable development, including
the challenges of creating a lowcarbon economy. This research has
identified numerous ways to measure
the balance between economic
development, society, resources and the
environment. These methods include:
•quantifying resource and
environmental costs (in monetary
terms) against GDP
•calculating the resource,
environmental and technological
efficiency of economic output by
comparing inputs and outputs.
38
However, these methods require
specialized theoretical approaches and
substantial amounts of data, and they
do not hold much influence outside
academia. Further, neither method
conducts a micro-level analysis of cities
(at the level of businesses, families and
individuals) or offers recommendations
to decision makers in cities.
In general, the index methodology is
widely used to measure sustainable
economic development. This method
translates various environmental
performance indicators into a composite
index through weighted calculation.
Indexes are highly credible because
of their simplicity and transparency.
Index-based methods are also highly
flexible, enabling researchers to take
different scenarios into account.
Many domestic and international
institutions use index-based methods
to assess the relationship between the
economy, society, resources and the
environment in different regions. These
methods include the Environmental
Performance Index developed by Yale
University and Columbia University,
which was used to evaluate resource
and environmental performance in 163
countries. It examined key indicators
in areas such as agriculture, forestry,
fisheries, ecology, climate change and
air pollution. However, this index did not
apply to cities.
Among the indexes used to assess
a city’s sustainable development,
the Siemens Green City Index takes
into account the use of technology
and government policy to assess
the relationship between economic
development, resource consumption and
the state of the environment. However,
the Green City Index only includes five
Chinese mainland cities.
The China Green Development
Index, developed by Beijing Normal
University and China’s National Bureau
of Statistics, examines sustainable
development in China’s 30 provinces and
34 major cities. It looks at the resource
and environmental sustainability of
economic growth, the depth of natural
resources, and government policy
support. However, this index cannot
easily be used to evaluate city-wide
environmental performance, because
some indicators related to agriculture
need to be adjusted. It is also difficult to
obtain data on many of these indicators,
which limits their scope of application.
The Chinese Academy of Social Sciences
Urban Scientific Development Index
System examines China’s 286 cities at
the prefecture level and above based on
four dimensions: economic prosperity,
social harmony, environmental
responsibility and support capabilities. It
uses weighting to evaluate sustainable
urban development.
There has also been a great deal of
research on topics such as China’s
energy consumption, livability and
transition to a low-carbon economy.
This research includes the low-carbon
development index of China’s 110
cities, led by the CAS Institute for
Urban and Environmental Studies;
The Evaluation of Environmental
Habitability of Chinese Cities, by the
Chinese Academy for Environmental
Planning in cooperation with the Asian
Development Bank; and the World
Bank’s Sustainable Low-Carbon City
Development in China. However, these
studies do not offer a comprehensive
method for assessing cities’ economic
and environmental performance.
Although the studies above vary in
terms of content, approach, method and
target, they provide significant scientific
evidence and important references. We
have drawn on this research to produce
an inclusive, balanced and data-driven
index system that can comprehensively
evaluate the coordination between the
economy, resources and environment in
China’s cities.
Creating the NRE City Index
The NRE City Index reflects a city’s
sustainability performance in a target
year. It demonstrates how a city performs
by decoupling economic growth from
resource consumption and environmental
damage. The index does not predict
trends in decoupling, which would require
years of historical data.
The indicator system consists of three
first-tier indicators, 14 second-tier
indicators and 32 third-tier indicators.33
The first-tier indicators are based on
three dimensions: a city’s economic
performance, its resource and
environmental sustainability, and its
development capability. This reflects
the essence of urban development
performance in terms of the trilemma,
and the core vision of decoupling in the
transformation to the NRE. The three
tiers of indicators also reflect the Chinese
Government’s vision to improve energy
efficiency, protect the environment and
reduce greenhouse gas emissions.
The first-tier index of economic
performance is connected to three
second-tier indicators:
• urban economic density
• urban economic structure
• urban economic development.
The last first-tier indicator, development
capability, relates to six second-tier
indicators:
•resource security
•urban infrastructure
• information technology and
intelligence
•policies
• investment in environmental protection
• technological innovation capability.
A full list of the indicators and their
underlying data sources can be seen
below.
The first-tier indicator of resource and
environmental sustainability corresponds
with five second-tier indicators:
• efficient resource use
• circular economic development
•environmental efficiency
•environmental quality
•low-carbon development.
Exhibit 27. Three-tiered indicators and their data sources
Indicator
Unit
Specification
Data source
Urban economic density
RMB10,000 per km2
Local GDP and developed urban land China City Statistical Yearbook
area
Proportion of high-energy
consuming sectors
%
Proportion of industrial output value Economic statistics database of
of high-energy consuming sectors34 large-scale industrial enterprises
Proportion of high-tech
industries
%
Proportion of industrial output
value that is derived from high-tech
industries35
Economic statistics database of
large-scale industrial enterprises
Residents’ per capita
disposable income
RMB
Urban residents’ disposable income
per capita
China Statistical Yearbook for the
Regional Economy
Fiscal expenditure per
capita
RMB
Local government budget per capita
China City Statistical Yearbook
39
Indicator
Unit
Specification
Data source
Water consumption per
unit of GDP
Tons per RMB10,000
Urban water supply per unit of GDP
Energy consumption per
unit of GDP
Tons of standard coal
per RMB10,000
Urban energy consumption per unit
of GDP
China Provincial and Municipal
Statistical Yearbook
Developed land area
required per unit of GDP
Km2 per RMB10,000
Developed urban land area per unit
of GDP
Rate of comprehensive
utilization of industrial
solid waste
%
Comprehensively utilized
industrial solid waste per year as a
percentage of industrial solid waste
created throughout the year and
comprehensively utilized total stock
in previous years
Rate of industrial water
recycling
%
Proportion of recycled water in
terms of total water used during
industrial production
China Urban Construction Statistical
Yearbook
Intensity of sulfur dioxide
(SO2) emissions
Kilograms per
RMB10,000
Gross SO2 emissions from production China Environment Yearbook
and living per unit of GDP
Intensity of chemical
oxygen demand (COD)
emissions
Kilograms per
RMB10,000
Gross COD emissions from
production and living per unit
of GDP
Intensity of ammonia
emissions
Kilograms per
RMB10,000
Ammonia emissions from production China Environment Yearbook
and living per unit of GDP
Intensity of nitrogen oxide
(NOx) emissions
Kilograms per
RMB10,000
NOx emissions from production and
living per unit of GDP
China Environment Yearbook
Industrial wastewater
discharge compliance rate
%
Proportion of discharged industrial
wastewater meeting relevant
national standards
Average concentration
of SO2
Micrograms per m3
Average concentration of SO2
Environmental and air quality of
key environmental protection cities
in 2010
Average concentration of
nitrogen dioxide (NO2)
Micrograms per m3
Average concentration of NO2
Environmental and air quality of
in 2010
Average concentration of
particulate matter (PM10)
Micrograms per m3
Average concentration of PM10
Environmental and air quality in
in 2010
Percentage of “blue sky”
days
%
Proportion of days with good air
quality
Carbon emissions per
capita
Tons per person
Carbon emissions calculated
according to primary energy
consumption per capita
Statistical yearbooks of the sample
cities
40
Indicator
Unit
Specification
Data source
Rate of change in carbon
emissions intensity
%
Average rate of change in carbon
emissions between 2007 and 2010
Statistical yearbooks of the sample
cities
Urban population density
People per km2
Urban population in the urban land
area
Water resources per capita
m3 per person
Average total water resources use
per capita
Bulletin of Water Resources of Cities
Urban water supply
pipeline density
Kilometers per km2
Length of water supply pipe in
built-up areas
China Urban Construction Statistical
Yearbook
Urban public transport
passenger volume per
capita
Times used per person
Number of passengers carried
by public transportation vehicles
throughout the year
Internet penetration
%
Broadband internet users as a
percentage of the total number of
households
China Statistical Yearbook for
Regional Economy
Rate of harmless treatment %
of household garbage
Rate of harmless treatment of
household garbage
Low-carbon city pilot
Y/N
Yes or no answer
The NDRC Notice regarding the
Pilot Project of Low-Carbon
Provinces and Cities, and the
NDRC Notice on the Pilot Project
of the Second Batch of LowCarbon Provinces and Cities
Intensity of urban
environmental quality
monitoring
Number per km2
Number of sites in the national
surface water and environmental
and air quality monitoring network,
which examines six monitoring
indicators: SO2, NO2, PM10, fine
particles (PM2.5), ozone (O3) and
carbon monoxide (CO)
List of Sites of National Urban
Environmental and Air Quality
Monitoring Network
Proportion of pollution
treatment investment in
terms of GDP
%
Investment in environmental
pollution treatment completed this
year per unit of GDP
Proportion of fiscal
expenditure in science and
education
%
Science and education spending as a China City Statistical Yearbook
percentage of local general budget
expenditure
Number of high education
schools
Number
Number of higher education
institutions weighted by central
government funding support
categorization (211 project and 985
project)
Ministry of Education list of
universities
Note: The database year is 2010. Some indicators use data from neighboring years. Data from 2009 was used to calculate the proportion of high-energy
consuming sectors and the proportion of high-tech industries. The lists of low-carbon pilot cities referring to the first and second batches of cities stipulated
by the National Development and Reform Commission were released in 2010 and 2012 respectively. The number of universities referred to the latest list of
universities, which was released by the Ministry of Education in 2012.
41
Applying the index
framework
For this study, we applied the index
to 73 of China’s 287 cities at the
prefecture level and above, covering
31 provinces, municipalities and
autonomous regions to ensure broad
representation. The base year is 2010;
however, a small number of indicators
use data from 2011.
We asked experts on urban management
and environmental economics in China
to rank the importance of each indicator
across the three tiers (a city’s
economic performance, resource and
environmental sustainability, and
development capability). We then used
these rankings to weight the indicators.
According to the weighting of each
indicator, we standardized the raw
index data (through a combination of
sub-segment assignments and standard
deviation), and set a 0–100 range
for the value of each indicator. The
weighted sum of each indicator’s
score then provides an indication of
a city’s urban performance, allowing
comparative analysis of different cities.
The CAS and Accenture research team
consulted with urban management and
environmental economists to determine
the most appropriate weights for each
indicator. The precise weights applied
are shown in Exhibit 28 below.
Exhibit 28. Constitution and weight of NRE City Index indicators
First-tier
indicator
First-tier
weight
Second-tier
indicator
Second-tier Third-tier
weight
indicator
Third-tier
weight
Economic
performance
32%
Urban economic
concentration
9%
Urban economic density
9%
Urban economic
structure
10%
Proportion of high-energy consuming
sector
5%
Proportion of high-tech industry
5%
Residents’ disposable income per capita
6.5%
Fiscal expenditure per capita
6.5%
Urban economic
development
42
13%
First-tier
indicator
First-tier
weight
Second-tier
indicator
Second-tier Third-tier
weight
indicator
Third-tier
weight
Resource and
environmental
sustainability
35%
Efficient
resource use
7.5%
Water consumption per unit of GDP
2.5%
Energy consumption per unit of GDP
2.5%
Developed land area required per unit
of GDP
2.5%
Rate of comprehensive utilization of
industrial solid waste
3%
Rate of industrial water recycling
3%
Intensity of SO2 emissions
2%
Intensity of COD emissions
2%
Intensity of ammonia emissions
2%
Intensity of NOx emissions
2%
Industrial wastewater discharge
compliance rate
1.6%
Average concentration of SO2
1.6%
Average concentration of NO2
1.6%
Average concentration of PM10
1.6%
Number of “blue sky” days
1.6%
Carbon emissions per capita
2.75%
Rate of change in carbon emissions
intensity
2.75%
Urban population density
3.3%
Water resources per capita
3.3%
Urban water-supply pipeline density
3%
Urban public transport passenger
volume per capita
3%
Circular
economic
development
6%
Environmental
efficiency
8%
Environmental
quality
Development
capability
33%
8%
Low-carbon
development
5.5%
Resource
security
6.6%
Urban
infrastructure
6%
IT and
intelligence
4.5%
Internet penetration
4.5%
Policies
5.7%
Rate of harmless treatment of
household garbage
1.9%
Low-carbon city pilot
1.9%
Intensity of urban environmental quality 1.9%
monitoring
Investment in
environmental
protection
4%
Proportion of pollution treatment
investment in terms of GDP
4%
Scientific and
technological
innovation
6.2%
Proportion of fiscal expenditure in
science and education
3.1%
Number of universities
3.1%
43
Indicator value assignment
and calculation methods
Since the indicators are subject to
different value ranges, we used data
standardization to produce a composite
index for evaluating different cities
under uniform standards. This allowed
the team to undertake a comparative
analysis across all the sample cities.
Based on the relevant national and
international standards, each indicator
has a target and reference value. The
target value is the optimal standard a
city can achieve on an indicator, and is
extremely hard to achieve. The reference
value is the minimum level a city should
achieve on an indicator, and is based on
the relevant standards released by the
World Health Organization, the Chinese
Ministry of Environmental Protection
and other authoritative organizations.
Where it was not possible to determine
a relevant standard, the study instead
used a mean or median value based on
the distribution of sample values.
The study used a scoring range of
0–100 for standardized indicators,
where a target value is equal to 100.
Therefore, each sample city’s score
against that indicator is the difference
between the indicator value and the
target value. A city’s NRE score is
the weighted sum of its standardized
scores across all indicators.
100, if xik is equal to or larger than target value

xik = 
z − xik
xik − z
100
−
100
*
100
100
*
, if xik is smaller than target value
or
−

z
x
max
x
−
z
min
−
ik
ik

Note: z = target value; xik = the city’s score for indicator k; i = (1,2,…73), k = (1,2,…32).
For indicators that also had a reference
value, the reference values needed
to be standardized according to the
value distribution of the data for that
indicator. For example, if the reference
value was 70 points, and a city’s
indicator value reached or exceeded the
reference value, it would score in the
range of 70–100 points depending on
the difference between the indicator
value and the reference value. If
the index value was lower than the
reference value, it would score in the
range of 0–70 points depending on the
difference between the two.
xik − w
w − xik

70 + 30 * max x − w or 70 + 30 * w − min x , if xik is equal to or larger than reference value

ik
ik
xik = 
70 − 70 * w − xik or 70 − 70 * xik − w , if x is smaller than reference value
ik

w − min xik
max xik − w
In the formula, “w” represents the
reference value. If necessary, the data
for one indicator was split into subsegments to help determine the score.
Furthermore, to eliminate the effect of
singular, unstandardized values, each
indicator had an optimum and minimum
limit according to the range and
distribution of the sample indicators.
44
If the indicator value was above the
optimum limit, the score was 100; if the
indicator value was below the minimum,
the score was 0.
45
Acknowledgements
This research was conducted by
Accenture and the Chinese Academy of
Sciences (CAS) Research Center on the
Fictitious Economy and Data Science.
Program steering committee:
•Gong Li, Chairman of Accenture
Greater China
•Peter Lacy, Managing Director,
Strategy & Sustainability Services
Asia Pacific, Accenture
•Michael Ding, Senior Managing
Director, Resources Lead, Accenture
Greater China
•Bo Wang, Managing Director, Health
& Public Services, Accenture Greater
China
•Dr Minjun Shi, Deputy Director,
Research Center on the Fictitious
Economy and Data Science, Chinese
Academy of Sciences
Chinese Academy of Sciences research
team:
•Na Li, Assistant Researcher
•Yanyan Lui, Research Assistant
•Wen Huang, Research Assistant
•Qi Qi, Research Assistant
Accenture research team:
•Xuyu Chen, Senior Marketing
Manager, Management Consulting,
Accenture Greater China
•Mengmeng Cui, Manager, Strategy &
Sustainability, Accenture
•Guanghai Li, Managing Director,
Strategy & Sustainability, Accenture
Greater China
•Warren Wang, Managing Director
of Health & Public Service Industry,
Accenture Management Consulting,
Greater China
•Wei Qian, Managing Director &
Thought Leadership Lead, Accenture
Management Consulting, Greater
China
46
Expert committee:
•Shantong Li, Former Director
and Researcher of Development
Strategy and Regional Economy in
the Research Department of the
Development Research Center of the
State Council
•Hui Wen, Division Chief of Planning
and Vice President of the Planning
Institute at the NDRC Cities and Small
Towns Reform and Development
Center
•Hua Wang, Chief Expert of
Policy Research at the Center for
Environment and Economy in the
Ministry of Environmental Protection,
and Director and Researcher at the
International Environmental Policy
Research Institute
•Guoping Li, Associate Dean of the
School of Government at Peking
University, and Director and Professor
at the Beijing Development Institute
•Siqi Zheng, Associate Professor
of Real Estate Institute Studies at
Tsinghua University
•Chorching Goh, Chief, Economics Unit;
and Lead Economist, China, Mongolia
and Korea, the World Bank
•Houkai Wei, Deputy Director General
& Professor, Institute for Urban
and Environmental Studies, Chinese
Academy of Social Sciences
•Dingming Xu, Former Chief of National
Energy Administration at the National
Development and Reform Commission
Acknowledgements: Luis Ceniga, Jeff
Beg, Annabell Chartres, Hao Xu, Yuelong
Fan, Selina Zhao, Tina Zhijuan Lu,
Xiaojun Liu, Grace Wang, Alexander
Broeking and Editor Group.
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Planning, 2010, www.gov.cn/zwgk/2011-06/08/
content_1879180.htm; Zhu Hui, Research on
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Megalopolises, 2012.
1 2 Minjun, Shi and Guoxia, Ma, Resource and
Environmental Costs of China’s Economic Growth,
2009. The authors made a monetized evaluation
of resource consumption, ecological degradation
and environmental pollution as a result of
China’s economic growth in 2005, and concluded
that China’s resource and environmental costs
accounted for 13.5 percent of GDP.
3 Xinhua News Agency, News Analysis: Broadband
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news.xinhuanet.com/english/indepth/201308/19/c_132643900.htm. Also Xinhua News
Agency, China to accelerate broadband
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china/2012-09/18/c_131858434.htm.
4 State Grid Corporation of China, Smart
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gnzndwzx/2013/02/288524.shtml.
5 China Internet Network Information Center,
http://www.cnnic.cn/hlwfzyj/hlwxzbg/
hlwtjbg/201301/P020130801546406723463.pdf.
6 http://www.go-globe.com/blog/social-mediachina.
7 The World Bank and the Development Research
Center of the State Council, the People’s
Republic of China, China 2030: Building a
Modern, Harmonious, and Creative Society,
www.worldbank.org/content/dam/Worldbank/
document/China-2030-complete.pdf.
8 Jianwu He and Shantong Li, Urbanization and
Economic Growth, Series 2 of China Think Tank,
2013.
The 2012–30 forecast is based on the scenario
design of China’s economic growth prospects
developed by the Development Research Center
of the State Council. The urbanization rate will
increase by an average of 0.9 percent from 2007
to 2020, and by 0.6 percent from 2021 to 2030.
10 11 China’s economic growth prospects estimated
using a computable general equilibrium (CGE)
model, developed by the Development Research
Center of the State Council based on dynamic
recursive projections.
Jinping, Xi, Success No Longer Measured Simply
by GDP Growth, Xinhua, June 30, 2013, www.
zj.xinhuanet.com/newscenter/headlines/201306/30/c_116342561.htm.
12 New Ideas, New Perspectives, New Initiatives,
Xuexi Publishing House, Red Flag Publishing
House, November 2012.
Xinhua News Agency, News Analysis: Broadband
blueprint to facilitate China’s economic
restructuring, August 19, 2012, viewed at http://
news.xinhuanet.com/english/indepth/201308/19/c_132643900.htm. Also Xinhua News
Agency, China to accelerate broadband
development: ministry, September 18, 2012,
viewed at http://news.xinhuanet.com/english/
china/2012-09/18/c_131858434.htm.
24 25 State Grid Corporation of China, Smart
Meters press release, February 22, 2013,
www.sgcc.com.cn/ztzl/newzndw/zndwzx/
gnzndwzx/2013/02/288524.shtml.
26 China Internet Network Information Center,
http://www.cnnic.cn/hlwfzyj/hlwxzbg/
hlwtjbg/201301/P020130801546406723463.pdf.
13 14 United Nations Environment Programme,
Decoupling Natural Resource Use and
Environmental Impacts from Economic Growth,
2011, www.unep.org/resourcepanel/decoupling/
files/pdf/decoupling_report_english.pdf.
China’s Twelfth Five-Year Guideline (20112015), www.gov.cn/2011lh/content_1825838_2.
htm.
15 http://www.go-globe.com/blog/social-mediachina/
27 Yitong Dong, China Center for Energy
and Development, China’s Building Energy
Study, 2013, www.nsd.edu.cn/userfiles/
Other/2013-2015/2013052720533275212921.pdf.
28 29 Based on The Climate Group, Arup, Accenture,
Horizon, Information Marketplaces. The New
Economics of Cities, 2012, pp. 48 to 50.
This report draws on the World Economic
Forum’s The Future of Urban Development
Initiative: Tianjin Champion City Strategy (in
collaboration with Accenture), January 2013.
30 Among the cities included in the index, 36
percent (25 cities) have a per capita GDP of over
RMB70,000, which is equivalent to US$10,833
based on the 2011 US dollar exchange rates.
This is higher than that of upper-middle income
countries. According to World Bank data and the
currency exchange rate of 2011, the per capita
GDP of upper-middle income countries was
US$7,326.
16 31 Tianjin Statistical Yearbook 2012. Note: data
for 2005 and beyond has been revised after
preliminary accounting during the second
economic census.
World Economic Forum and Accenture, New
Energy Architecture: Enabling an Effective
Transition, 2012.
32 Equivalent to US$7,738–$10,833 based on 2011
US dollar exchange rates.
17 18 Excluding the four municipalities directly under
the Central Government, the top 15 cities in the
index ranking are: Shenzhen, Suzhou, Xiamen,
Hangzhou, Zhuhai, Guangzhou, Dalian, Wuxi,
Weihai, Qingdao, Changsha and Zhongshan.
State Council of China, National Planning of
Main Functional Areas, 2011,
www.ifeng.com.
19 China’s Twelfth Five-Year Guideline (2011–
2015).
20 World Economic Forum and Accenture, Energy
Efficiency: Accelerating the Agenda, 2011,
pp. 10–15.
33 See Research Methodology for the index
composition and definition, and data sources.
According to the Statistical Communiqué on the
2011 National Economic and Social Development,
the six high-energy consuming industries include
raw chemical materials and chemical products
manufacturing, manufacturing non-metallic
mineral products, smelting and pressing ferrous
metals, smelting and pressing non-ferrous metals,
processing petroleum, coking, processing nuclear
fuel, and producing and supplying electric power
and heat power.
34 21 Minjun, Shi and Guoxia, Ma, the World Bank,
Resource and Environmental Costs of China’s
Economic Growth, 2009. The authors made a
monetized evaluation of resource consumption,
ecological degradation and environmental
pollution as a result of China’s economic growth
in 2005, and concluded that China’s resource and
environmental costs accounted for 13.5 percent
of GDP.
9 22 Accenture, Understanding Consumer
Preferences in Energy Efficiency, 2010, p. 9.
McKinsey Global Institute, Preparing for China’s
Urban Billion, March 2009.
23 According to the Circular Regarding the
Catalog for High-Technology Industrial Statistics
Classification introduced by the National Bureau
of Statistics in July 2002, the statistical range
of high-tech industries includes aerospace
and aircraft manufacturing, electronics and
communications equipment manufacturing,
computer and office equipment manufacturing,
pharmaceutical manufacturing, and medical
equipment and instrument manufacturing and
other industries.
35 47
About Accenture
Greater China
About the Chinese Academy
of Sciences
Accenture is a global management
consulting, technology services and
outsourcing company. Combining
unparalleled experience, comprehensive
capabilities across all industries and
business functions, and extensive
research on the world’s most successful
companies, Accenture collaborates with
clients to help them become highperformance businesses and governments.
As a Fortune Global 500 company,
Accenture has approximately 266,000
people worldwide serving clients in over
120 countries. The company generated
net revenues of US$27.9 billion for
the fiscal year ended Aug. 31, 2012.
The Chinese Academy of Sciences (CAS)
is China’s highest academic institution in
natural sciences, its supreme scientific
and technological advisory body, and
a comprehensive national research
and development center in natural
sciences and high technologies.
Accenture has conducted business in
Greater China for more than 20 years.
Today, it has more than 8,500 people
working in Greater China—in Beijing,
Shanghai, Dalian, Chengdu, Guangzhou,
Hong Kong and Taipei. With a proven
track record, Accenture is focused on
leveraging local best practices and
successes, and is dedicated to delivering
premium client value and results.
Accenture helps clients define strategy,
streamline business processes, integrate
systems, promote innovation and
enhance overall competitive advantage
to ultimately attain high performance.
With over 50,000 staff, CAS has 12
branch offices, over 100 institutes, more
than 100 national key laboratories and
national engineering research centers, and
212 field stations throughout the country.
The Research Center on Fictitious
Economy and Data Science (FEDS) is
a research institute of the Chinese
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Creating Prosperous and Livable Chinese Cities: The New

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