Academic journal article Journal of Sustainable Development

Analysis of the Emerging China Green Era and Its Influence on Small and Medium-Sized Enterprises Development: Review and Perspectives

Academic journal article Journal of Sustainable Development

Analysis of the Emerging China Green Era and Its Influence on Small and Medium-Sized Enterprises Development: Review and Perspectives

Article excerpt

Abstract

Small and Medium-sized Enterprises (SMEs) play a vital role in China's economy as generators of employment, revenue and innovation. With the unprecedented economic development of China, the increase of small and medium-sized enterprises (SMEs) number has resulted in a massive resources and energy consumption that produces significant generation of waste by-products. The purpose of this study is to demonstrate that China is facing an emerging green era. The raise of Chinese environmentalism is strongly correlated with the economic development of middle class, which involves not only environmental activists, but also social stakeholders and the media. Responding to the country's pollution and the increasing public pressure, the government has started to enforce its environmental laws with the 12th Five-Year Program. New environmental regulations and standards are issued every day, and the number of environmental inspection is increasing to insure firms' compliance. The study also reveals that government legislation and financial support are mandatory to support improvement of SMEs environmental performances. Similarly, stakeholders have started to play an increasing role in firms' adoption of greener strategies and practices into their management systems. Customers demand for green products, non-governmental organizations campaigns and pollution scandal revealed by the media are starting to pressure SMEs to be greener. However, Chinese SMEs are still facing numerous challenges that limit their efforts in implementing environmental management system: difficulties to comply with the changing government legislation, inequity in allocation of government subsidies, lack of managers engagement to reduce firms environmental impact, lack of technological absorptive capacity, lack of financial resources, lack of knowledge regarding environmental management and channel to connect with universities or others institutions.

Keywords: emerging green era, government, stakeholders, Chinese SMEs, environmental performances

1. Introduction

China, second largest economy, has impressed the world with its extraordinary economic growth rate averaging 10 percent over the past 30 years. The country also leads the world in energy consumption, carbon emissions and release of major air and water pollutants in the environment due to the widespread industrialization and urbanization combined with an increasing use of resources. The rapid economic development of China has resulted in numerous economic challenges that the government needs to reduce environmental damage and social conflicts. China's over population, huge industries investments, and private firms' investments have made the environment extremely hazardous to the health and well-being of the country (Lin, 2007).

Small and medium-sized enterprises (SMEs) play a vital role in China's economy as generators of employment, revenue and innovation. Companies are regarded as SMEs if they are owned by private entrepreneurs, employ 300 to 2,000 people, have annual sales of 30 to 300 million RMB and own assets worth 40 to 400 million RMB (Zhong & Zhang, 2010). In 2009, China's registered SMEs exceeded 43 million in number and accounted for 58.5 percent of the country's gross domestic product, half of its tax revenues and 68 percent of its exports, created about 80 percent of the country's jobs according to the China Association of SME (Xinhua, 2012a). SMEs are a vibrant force for the sustained development of the Chinese economy. However, most of Chinese SMEs are often unaware of their environmental impact or the environmental legislation affecting them (UNIDO, 2011a). China's current environment degradation is rapidly increasing and similarly followed by growing awareness and interests of the public. The past years has witnessed an increasing number of major pollution incidents resulting from the displeasure of the public against industrial environmental abuses, and from the spread of environmental movement through micro-blogging sites where the Chinese middle-class is more engaged on environmental issues than ever (Moore, 2009). …

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