Research Project （321）
S.SHARON
Feedback-ImpactInvestinginChinav1.docxRunning head: IMPACT INVESTING IN CHINA 1
IMPACT INVESTING IN CHINA 11
Impact investing as a means of achieving Sustainable Development Goals in China
Sustainability is the goal of every organization and nation. In economics, it refers to when a nation is able to support a demarcated level of economic production indeterminately (Aras & Crowther, 2012). A sustainable country meets the needs of its citizens and sustains its natural resources at the same time without struggling. In this respect, many nations have set Sustainable Development Goals in a bid to reach this state and China is a significant example. While there are many strategies which China can execute to achieve her sustainability, given her situation, impact investing appears a more fitting means. Comment by 作者: irrelevant to your topic Comment by 作者: its Comment by 作者: Why impact investing is important? Why should I care? Explain it in your introductory paragraph.
Definition of Impact Investing Comment by 作者: When was start? Who do this? (private, public or government) What is capital sourse? Where? How?
From the perspective of states and countries, impact investing refers to the funds and ventures that a state or nation makes into companies and organizations, with the aim of generating measurable, advantageous social and ecological benefits alongside monetary returns. Impact investing falls under the parasol of strategic philanthropy. Philanthropy refers to the deliberate affection for humanity that people, organizations, and states show in contributions of property, and money or work for the benefit and welfare of others. Impact investing is more than writing out a check for donations to charities. It embraces bringing about an impact or change that will enhance the sustainability of the whole society and its components. Organizations, states, and countries capitalize on the opportunities that private investments create to address development priorities and optimize societal and environmental returns on investments. More importantly, the agencies have to conduct these initiatives and actions in a way that is viable and links to the principal business of the company. Comment by 作者: Good sentence, you can out in introductory paragraph
China’s Sustainable Development Goals
China has various sustainable development goals that she is working to meet. However, she closely follows the Global goals or Sustainable Development Goals (SDGs) of the United Nations Development Program (UNDP), which guides all the nations towards sustainability economically, socio-politically and environmentally (United Nations, 2017). In line with the SDGs’ 2030, Agenda for Sustainable Development as writes Yao et al. (2014), China seeks to achieve four prime goals by the year 2030. They include: Comment by 作者: Use it instead, “she” is confusing
a) Environmental security
b) Sustained economic prosperity
c) Social justice and harmony and
d) Partnership promotion
China has adopted and modified the UNDP’s 2030 Agenda for Sustainable Development to suit her needs. The country attaches immense significance to the implementation of the goals as she considers the principles of the agenda of “Common but Differentiated Responsibilities,” Peaceful Development, Inclusiveness and Openness, Sovereignty and Voluntary Action, Integration and Coordination, as well as, Win-win Cooperation (United Nations, 2017), as the breakthrough to sustainability. She considers the principles as crucial factors in constructing a new and popular form of international relations featuring win-win cooperation, instituting multifaceted partnership, and realizing social, economic and environmental development in a balanced fashion, which China wants to achieve.
Generally, at random, by the year 2030, China seeks to free herself from environment-related issues such as the adverse effects of climate change like the greenhouse effect and global warming. The nation also aims at eradicating poverty and minimizing conflicts, both internal and external as well as doing away with political instability (Andressen, Mubarak & Wang, 2013). Achieving these goals is not a problem because they are attainable. The dilemma is how to accomplish them.
Impact investing as a means of achieving Sustainable Development Goals in China Environmental security
Hu (2017) explains that environmental security refers to the safety of the environment for animals and plants and human activities. It is one of China’s core objectives in the 2030 Agenda for Sustainable Development Goals (SDGs) that she released on 12 October 2016. Short-term goals for the nation under this category include clean water and sanitation, affordable and clean energy and a good climate. In this sense, the Chinese government seeks to examine, eliminate, and prevent the threats that the environmental events and trends pose to its individuals, populations, and even its neighboring nations, and find and fund the appropriate ways of eliminating them.
Impact investment sets in at this point. According to Vecchi et al. (2017), businesses and companies are at a better position of taking care of the environment, as they are the ones in charge of production and distribution of goods and services. Firms also have the power of influence on people and the society as they come up with trends in their businesses for their consumers to follow. In this way, the Chinese government can join hands with private ventures and strike deals in which the government will support the enterprises financially and have them lead the campaign to protect and conserve the environment. For example, China can have her private investments manufacture environmental-friendly products. They can particularly improve on the materials they use for packaging. For instance, China should change from using polythene, which never undergoes decomposition to using the decomposable cotton bags for packaging. Wholesale and retail businesses such as supermarkets and hypermarkets can also lead the nation in keeping towns and the general environment clean by placing garbage cans in strategic places. More so, the businesses can take the obligation of treating wastes and garbage to neutralize their harm to people and habitats. Chemical and petroleum-associated companies, for a case in point, can deal with their residues before releasing them in water bodies like rivers. They can also treat areas of unwanted spillages of oil and other chemicals.
Arguably, there can never be any better ways of driving towards environmental security than these ones. Perhaps the Chinese government already knew this. According to Hu (2017), one of its development agencies the New Ventures China (NVC) is working with CIF, an impact investing and ‘business acceleration hybrid model’ to offer funding and technical help services to environmental-oriented small and medium enterprises (SMEs) in the nation. A perfect case here, according to Vecchi et al. (2017), is that of the Ecofroggy International, which offers recycled stationery goods and environmental education for China’s primary school students.
Sustained economic prosperity
Sustainable economic prosperity is associated with real output increases over time at a rate that a nation can comfortably maintain without bringing up many other significant economic difficulties, particularly for the future generations. China’s short-term Sustainable Development Goals (SDGs) under this umbrella include industry, innovation and infrastructure, reduced inequalities, proper employment and economic growth, responsible consumption and production, no poverty, zero hunger, and sustainable communities and cities. China’s Premier Li Keqiang, in the 71st UN General Assembly (UNGA) in New York, US, on 19 September 2016 provided the way forward for the implementation of the action plan for these goals that are also part of the Millennium Development Goals (MDGs) (United Nations, 2017). The government posted the plan on the website of the Ministry of Foreign Affairs (MFA).
Of course, all of these aims are achievable but anyone would need to be as strategic as possible. For example, one can meet all these goals with a single hit. The secret lies in creating employment opportunities for people. When individuals are working their socioeconomic standards improve. They will be able to acquire food and other basic needs. Because the majority of people will be capable of buying food, there will be no hunger and poverty levels will drop in turn. Industry and infrastructures will also improve because of the high living standards as communities and cities become sustainable.
On this ground, China should focus on creating employment opportunities for its people. How can it achieve this course? Impact investing is the answer. In this context, the Chinese government should invest in private ventures in order to create job opportunities for its people. The nation may choose to offer the businesses grants or low or even zero-interest loans to open up their new branches or simply expand so that there are more employment vacancies of its citizens. The Chinese government can pursue this mission with its already established development banks such as the International Finance Corp. and the Asian Development Bank.
Social Justice and Harmony
The contemporary society characterizes social justice by the equal treatment of all people irrespective of the differences in color, religion, origin, and other traits, and the equal distribution of wealth and resources. A nation is just socially when the outside dynamics, which categorize people, are irrelevant. Harmony, on the other hand, occurs when there are no conflicts and or wars or fears of any of them. As such it extends to the situation of few, if any, criminalities, because wrongdoings are some of the primary sources of conflicts and wars, as well as the related fears in the society. The 2030 Agenda goals of China that fall under this category include reduced inequalities, peace, justice, and strong institutions, and gender equality. If China can achieve social justice and harmony, it means that there will be little if any, inequalities among her people.
Still, impact investing can be the way out for China here. However, unlike in the other goals, the Chinese government will have two primary obligations to complete: 1) to identify and fund the private organizations and 2) to make a fall up and ensure that the corporations are ensuring equity and equality in all levels thereby avoiding social injustice. So, like in the other goals, the big question here is how can impact investment lead to social justice and harmony in China?
The whole thing roots from employment. Here the Chinese government should also help private ventures technically and financially with the aim of creating employment opportunities for its citizens. When people are working, two things come up in favor of harmony. One, the citizens become engaged and busy and two, they earn. Consider that, for example, people rob and or steal because they have nothing to do (idle) or because they do not have resources to meet their needs according to Aras and Crowther (2012). Given that idleness and the lack of money are some of the main causes of crimes such as theft, and robbery, which are the leading causes of disharmony, more employment will significantly reduce them; hence, promoting harmony in China. The Chinese government is better placed to take on this course and fulfill its goals. For instance, through the CDRF and the China Social Entrepreneur Foundation (You Change), the Chinese government can facilitate the impression of social impact and the practice of social entrepreneurship, discover more possibilities for sustainable and efficient public welfare services, and identify more paths toward sustainable economic and social development so that it minimizes civilities and establishes harmony.
The pursuit of social justice, although it can occur hand in hand with harmony establishment, is best to occur after the attainment of harmony. Here, China is ready to execute its second obligation of ensuring that the business ventures observe equity and equality policies. The government, because it is the one mainly supporting the organizations, can decide to have the business entities observe various policies and or regulations regarding discrimination and other forms of social injustices. For a case in point, China may require the corporations to offer employment to any person who qualifies irrespective of his or her race, religion, and or gender. She may even extend the regulation to the hiring procedures to ensure that she addresses social injustice just from the roots. For example, she may require the private ventures to have the same interviews (including questions) and tests for all the job applicants in that field or position.
Partnership promotion
Partnerships are all about teamwork—working together either for mutual benefit or towards a common goal. Partnership promotion entails creating a situation where people and organizations can come together and cooperate in doing something. As such, the partners in a partnership may be personalities, companies, schools, interest-based organizations and governments. The development agendas of China under this goal include partnerships for the goals. China seeks to build an environment that will promote the cooperation and collaboration of individuals, organizations, and governments in various fields over given objectives. In many ways can the Chinese government achieve this milestone. For a case in point, the government may invest in the educational advertisement about the importance of teamwork. However, impact investing still is favored over many other methods. Important to note under this goal is that here the Chinese government will have to lead or act by example to enhance the chances of attainment of the goal. To pursue this goal, China will have to take on two actions: 1) Offer financial support to the private business entities and organizations and encourage them to collaborate with others and 2) to act as an example by collaborating with other governments, people, and non-governmental organizations in achieving the sustainable development goals.
The support to other businesses, in teaming with other entities, will also come up with other benefits in line with the fulfillment China's other sustainable development goals. For example, if China’s Sinopec and the State Grid Corporation come together, one of the results is the creation of more employment opportunities due to the expansion of businesses of the two firms. As the first and third largest and leading organization in China and third and seventh on the Fortune 500 companies’ rank respectively, Sinopec and State Grid Corporation may need a partnership manager, for instance, to control and manage the relationship and joint businesses of the two corporations (Spiess-Knafl and Scheck, 2017). Because of the creation of employment opportunities, the pursuing of this goal will also lead to the attainment of the other agendas of sustained economic prosperity and social justice and harmony. In this sense, the Chinese government should consider supporting such organizations financially and technically and persuade them to team up. It is not necessarily that organizations operating in the same line of product are the ones to enter a partnership. Even those dealing with very different goods, services or businesses can team up. For a case in point, a petroleum company like China National Petroleum and a transport and shipping firm such as China National Heavy-Duty Truck Groupcan and China Ocean Shipping (Group) Company (COSCO) respectively can form partnerships (Spiess-Knafl and Scheck, 2017). While the shipping company benefits from huge tenders of transporting the oil products, for example, the petroleum firm will benefit from huge transportation costs. As such, China should not be selective on the types of organization that she supports.
On the other hand, the Chinese government will itself have to form partnerships with people, organizations both for-profit and non-profit, and governments to enhance cooperation and collaboration. Luckily, this action plan seems to be already in execution in the nation. The fact that China adopted and modified the UNDP’s development goals implies that the two are already working together [China and a world non-profit organization(international cooperation)]—they are in a link to ensure that not only China but also other nations attain sustainability. In 2014, for example, China contributed around 3,800,000 USD to the entire budget of the United Nations Development Program (United Nations, 2017). In addition, on 19 September 2016, UNDP and the People’s Republic of China signed a Memorandum of Understanding (MOU) on collaboration on the Belt and Road Initiative (BRI) on the boundaries of the 71st United Nations General Assembly during the visit of Premier Li Keqiang. According to United Nations (2017), China’s president Xi Jinping presented this initiative to cooperatively build the “Silk Road Economic Belt and the 21st-Century Maritime Silk Road” in 2013 during his visit to Southern and Central Asia.
China and the Environmental Protection Agency (EPA) are also working together. The two have a bilateral relationship in which they are working together, sharing expertise and experience to improve environmental conservation in support of their communal ecological priorities. Specifically, Yao, et al. (2014) writes that China’s Ministry of Environmental Protection (MEP) and EPA now have three decades of collaboration in which they have jointly been addressing air, water, and soil pollution, hazardous and solid waste, deterrence and reinstatement of polluted sites, and emergency readiness and reaction, as well as, environmental law development, enactment, amenableness and enforcement.
Other than participating in international cooperation, the Chinese government has also facilitated the teaming up of its agencies and state organizations. For instance, according to Hu (2017), The New Ventures China (NVC) and China Impact Fund (CIF) are in collaboration to provide support to innovative small and medium-size businesses with positive social and eco-friendly impacts in the country, as well as, to address the main development challenges that they face.
The Chinese Government is also involved in regional partnerships. For a case in point, it is an active player in the south-south cooperation, which seeks to promote the SDGs and climate policies. China has customarily played a prominent role in this collaboration, primarily on the ground of the Group 77, the biggest intergovernmental association of the developing nations in the United Nations according to Uitto (2014). Moreover, in the most recent time, China has set up multifaceted initiatives as a member of the BRICS (Brazil, Russia, India, China, and South Africa) association and a regional thrust in Asia, counting the founding of the Asian Infrastructure Investment Bank and the establishment of the BRICS Bank, and the two well-known multilateral development banks (Aras & Crowther, 2012). China also significantly protracted its teamwork with Africa through the Forum for Africa Cooperation. Furthermore, it has facilitated the integration of interests and outlooks of the emerging countries into different worldwide agreements.
Through these connections, other than gaining the intended purpose, China will also succeed in terms of development. For a case in point, the Belt and Road Initiative (BRI) will create connectivity in the nation, which will foster unhindered trade, monetary incorporation, and people-to-people bonds (Uitto, 2014). In this regard, the Belt and Road Initiative embodies an influential podium for economic growth and district co-operation, connecting no less than 4 billion individuals. As a result, the initiative can function as a significant accelerator and facilitator for the sustainable development goals in China. Generally, the good partnership can also lay down a foundation for the pursuit and establishment of the other development goals. For instance, when people and organizations work together, they develop a good understanding, which facilitates social justice and harmony.
Conclusion
China can count on many other ways to achieve her sustainability goals. However, impact investing is the best suit for any nation of the socioeconomic and political status like her. With this method, she will only need enough capital and the appropriate persons for the right tasks for her to realize her sustainable development goals. Impact investing is convenient to her also because it welcomes cooperation, which is the key to many successes. For someone once said, ‘if you want to go far, go alone, but if you want to reach further, go with people.’ Adopting impact investing is also favorable and fitting for China because she is already doing some of the things that the process entails. For example, she is already working with other people, groups, and nations for sustainability of not only her society but also the whole world. As such, like already hinted, any other method would do for China regarding her reaching her sustainable development goals, but when it comes to efficiency, productivity and convenience, impact investing is the better option.
References
Aras, G., & Crowther, D. (2012). Business strategy and sustainability. Bingley, U.K: Emerald.
Andressen, C. A., Mubarak, A. R., & Wang, X. (2013). Sustainable development in China. Milton Park, Abingdon, Oxon: Routledge.
Hu, A. (2017). China: Innovative green development. Singapore: Springer Nature Singapore.
Spiess-Knafl, W., & Scheck, B. (2017). Impact investing: Instruments, mechanisms, and actors. Cham, Switzerland: Palgrave Macmillan.
United Nations. (2017). Achieving sustainable development goals in East and North-east Asia. Incheon, Republic of Korea: United Nations, ESCAP.
Uitto, J. I. (2014). Evaluating environment in international development. Abingdon, Oxon; New York, NY: Routledge.
Vecchi, V., Balbo, L., Brusoni, M., & Caselli, S. (2017). Principles and practice of impact investing: A catalytic revolution. Abingdon, Oxon; New York: Routledge.
Yao, S., Wu, B., Morgan, S., & Sutherland, D. (2014). Sustainable reform and development in post-Olympic China. London: Routledge.
