Journal of Cleaner Production 42 (2013) 215e227

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Journal of Cleaner Production

journal homepage: www.elsevier.com/locate/jclepro

A review of the circular economy in China: moving from rhetoric

to implementation
Biwei Su a, Almas Heshmati a, *,1, Yong Geng b, Xiaoman Yu b
a
Department of Food and Resource Economics, College of Life Science and Biotechnology, Korea University, East Building Room#217, Anam-dong Seongbuk-gu,
Seoul 136-713, Republic of Korea
b
Key Laboratory of Pollution Ecology and Environmental Engineering, Institute of Applied Ecology, Chinese Academy of Sciences, No. 72 Wenhua Road, Shenyang,
Liaoning Province 110016, PR China

a r t i c l e i n f o a b s t r a c t

Article history: Circular economy (CE) is a sustainable development strategy proposed by the central government of
Received 9 July 2012 China, aiming to improve the efficiency of materials and energy use. This strategy, formally accepted in
Received in revised form 2002, has been implemented and developed in a number of pilot areas in China. Scholars have produced
15 November 2012
rich studies in regard with the CE from its fundamental concept to its practical implementation.
Accepted 16 November 2012
Available online 28 November 2012
Successful enforcement of a CE can be seen as a way for China to tackle its urgent problem of envi-
ronmental degradation and source scarcity. Given its importance, we provide a holistic literature review
on the CE, aiming to provide a panorama of how this strategy has been developed and implemented. The
Keywords:
Circular economy
review covers the concept, current practices, and assessment of the CE. To have a more numeric concept
Environmental indicators of how it has developed, we look at the performance of the CE in Dalian after its implementation of
Environmental policy relevant policies and compare the changes with three other pilot cities, Beijing, Shanghai and Tianjin.
Sustainable development Based on an examination of the statistical results, we identified the underlying problems and challenges
Waste management for this national strategy. Finally, we offer a conclusion regarding CE’s development as well as policy
China recommendations for future improvement.
Ó 2012 Elsevier Ltd. All rights reserved.

1. Introduction Through an analysis on the relationship between economic and

1.1. Concept of a circular economy
The concept of a circular economy (CE) has been first raised by
two British environmental economists Pearce and Turner (1990). In
Economics of Natural Resources and the Environment, they pointed
out that a traditional open-ended economy was developed with no
built-in tendency to recycle, which was reflected by treating the
environment as a waste reservoir. Yet, under the first law of ther-
modynamics where total energy and matter remains constant in
a closed system, the open-ended system could be and should be
converted to a circular system when considering the relationship
between resource use and waste residuals. In another word, facing
existing environmental problems and resource scarcity, they called
for a need to contemplate earth as a closed economic system: one in
which the economy and the environment are not regarded by linear
inter-linkages, but by a circular relationship (Boulding, 1966).
* Corresponding author. Tel.: þ82 10 45131712.
E-mail addresses: sue925sky@korea.ac.kr (B.W. Su) (X.M. Su), heshmati@
korea.ac.kr (A. Heshmati), gengyong@iae.ac.cn (Y. Geng), yxm8612@126.com (X.M. Yu).
1
Research Associate at Soran University.
natural systems, they proposed a closed-loop of material flows in
the economy, which was named, circular economy.
The starting point of CE’s implementation began in 1996 in
Germany, accompanied with an enactment of a law: “Closed
Substance Cycle and Waste Management Act”. This law provided
a closed cycle waste management and ensured environmentally
compatible waste disposal. Another example is that the Govern-
ment of Japan developed a comprehensive legal framework for
moving towards a recycling-based society. The Basic Law for
Establishing a Recycling-Based Society came into force in January
2002 (METI, 2004; Morioka et al., 2005). It provides quantitative
targets for recycling and dematerialization of Japanese society
(Van Berkel et al., 2009). One common feature of both countries’ CE
policy is to prevent further environmental deterioration and to
conserve scarce resources through effective waste management,
especially integrated solid waste management.
In the case of China, rather than being regarded as an incre-
mentally improved environment management policy, the CE has
been introduced as a new development model to help China leapfrog
into a more sustainable economic structure (Zhu, 2008; Geng and
Doberstein, 2008a). The main focus of the CE, embedded in the
original concept, has gradually been shifted from narrow waste

0959-6526/$ e see front matter Ó 2012 Elsevier Ltd. All rights reserved.
http://dx.doi.org/10.1016/j.jclepro.2012.11.020
216 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227
recycling to broad efficiency-oriented control during the closed-loop
flows of materials at all stages of production, distribution and
consumption. Moreover, more areas have been covered: aside from
resources and waste problems, energy efficiency and conservation,
land management and soil protection, and integrated water resource
management problems have also been considered as key issues.
A consensus has been reached whereby China’s CE concept in
many ways resonates with the concept of industrial ecology, which
emphasizes the benefits of utilizing residual waste materials,
including energy, water, different by-products as well as informa-
tion (Jacobsen, 2006; Yuan et al., 2006). The most common example
of this concept would be industrial symbiosis where collective
benefits come from both economic and environmental aspects.
Economically, firms’ agglomeration brings pools of common
production factors such as labour, capital, and energy which may
decrease factor prices or raise productivity (Anderson, 1994).
Besides the transportation and transaction costs saved by spatial
proximity, firms that are located together can obtain technology
spill-over more easily (Coe et al., 2004). On the other hand, envi-
ronmental benefits will be obtained not only by minimizing the
amount of discharged waste, but -more importantly- by mini-
mizing the use of virgin materials for economic activity (Andersen,
2007). Zhu (2005) suggested that it was, in essence, an ecological
economy that would bring fundamental changes to the traditional
way of development. Three aspects, including economic, social, and
environmental dimensions, need to be considered in this model.
With regards to economic aspect, it contributes to higher regional
and domestic competitiveness through an increase in the effec-
tiveness of resource allocation, resource utilization and produc-
tivity. Environmentally, it reduces negative externalities mainly by
redesign of the industrial structure in an ecological way. Socially, it
creates employment opportunities, equals distribution of economic
growth and improves people’s overall well-being.
In order to implement the CE, the 3R principles (Reduction,
Reuse, and Recycle) have been embedded in production and
consumption since the flow of materials and energy penetrates in
both areas (Zhu and Qiu, 2007). Reduction refers to minimize the
input of primary energy and raw materials through the improve-
ment of production efficiency. As for consumers, a more frugal way
of consumption has been encouraged. Reuse suggests using the by-
products and wastes from one firm as resources for other firms or
industries. It also refers to use products to its maximum capability
with frequent maintenance and reclamation to prolong its endur-
ance. Recycle encourages processing the recyclable materials into
new products so that the consumption of virgin materials can be
reduced. These principles, as parts of the whole process, have
different hierarchical importance, with the reduction of resources
used as the leading principle within a circular economy system.
1.2. Importance of a development strategy
The recent enacted 12th five-year plan (2011e2015) for China’s
economic and social development suggests the continuous imple-
mentation and further development of the CE. It is not surprising to
see that the Chinese government spares no effort to push this
economic model into practice for a number of reasons. First, China
faces daunting environmental challenges due to rapid industriali-
zation and urbanization as well as lax environmental oversight.
Striking problems include land degradation, desertification, defor-
estation, water depletion and pollution, as well as loss of biodi-
versity. Globally, increasing concerns about climate change brings
controversy and extended pressures over China’s position on
carbon dioxide emissions. According to Chinese national statistics,
on average, CO2 emissions have been growing at 7.5%, annually,
from 3102 million tons (Mt) in 1997 to 7693 Mt in 2010 (Guan et al.,
2012). This increase resulted from China’s heavy dependence on
energy-intensive industries and an immense consumption of coal-
based energy sources. In response to serious environment prob-
lems, mitigation of carbon emission and reversal of environmental
degradation have become urgent missions.
Second, the severe shortage of resources and energy cannot
meet with the growing demand and impeded China’s future
economic growth (Li et al., 2010). On one hand, China must support
21% of the earth’s population with 9% of the farmed land, 6% of its
water, and 4% of its forest (Vermander, 2008). On the other hand,
a boom in economic growth and a surge in the output of heavy
industries starting from 2002 have resulted in the great
consumption of various resources and energy. China’s national
energy consumption was 3249 Mt standard coal equivalents in
2010, not only being the largest energy consumers in the world, but
also experiencing a double increase over the last decade (Guan
et al., 2012). Since energy-intensive and resources-consuming
industries will still dominate the Chinese industrial structure in
the near future (Li et al., 2010), China have to seek an innovative
pathway for sustainable economic development.
Third, in recent years, strict production and environmental stan-
dards and regulations in international trade, so-called “green
barriers”, have been put into effect. These compulsory barriers
significantly hurt developing countries’ trade revenue, since they
require not only acquisition of advanced technologies but also
implementation of a green reform in the production mode. Wang and
Liu (2007) regarded the CE as the fundamental resolution to remove
green barriers and expected that through its implementation, China
would gain enhanced national competitiveness in international trade.
Last, the CE helps to strengthen national security due to the
importance of sustainable energy supply. Additionally, the positive
environmental effects help to improve the overall well-being in the
society and advance a nation’s modernization (Heck, 2006).
Generally, the urgent environmental problems and resource
shortages in China and the potential implementation benefits in
the long-run are the primary reasons for the Chinese government
to choose the CE as the national development strategy, aiming to
improve the efficiency of materials and energy use. This strategy
has been implemented and further developed in various Chinese
areas. Many studies have been conducted, explaining the funda-
mental concepts and examining the practical implementation of
the circular economy. The successful enforcement of the circular
economy regulation can help tackle both environmental degrada-
tion and resource scarcity issues.
This study aims to contribute to the rapidly growing literature
on the CE in general and serves as an assessment of the design,
implementation and effectiveness of Chinese CE’s policy in partic-
ular. In order to achieve the goals, we first present the CE concept
and explain why it is imperative for China. Second, we introduce
the current practices in China and discuss the assessment of CE’s
development, including a discussion and comparison of indicators
designed and utilized by governmental agencies and scholars. Our
main focus is to provide data analysis of the key CE indicators
through a case study in Dalian city and have a comparison with
other pilot cities (Beijing, Shanghai and Tianjin) so that a more
holistic picture of circular economy practices in China can be pre-
sented. Then, based on our analysis and other literature, we identify
the underlying problems and challenges for this national strategy.
Finally, we provide the conclusion of the circular economy devel-
opment as well as policy suggestions for future improvement.
2. Current CE practices
A successful implementation of the CE policy requires efforts at
three different levels: micro-level, meso-level, and macro-level
 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227
(Yuan et al., 2006; Geng and Doberstein, 2008a; Zhu and Huang,
2005). Inspired by Zhu and Huang’s (2005) work we categorize
the current on-going CE practices into four areas (see Table 1).
Table 1 shows that, the four main areas, production, consumption,
waste management and other support, are changing in parallel, but
practices at micro and meso levels are more vibrant than those at
the macro level due to the fact that the complexity of practices
increases when the scale level increases.
At the micro level, in production area, factories and agricultural
products producers are encouraged or required to adopt cleaner
production (CP) and eco-design. Cleaner production has been the
most effective and widely developed measure compared to other
practices, especially after the enactment of China’s “Cleaner
Production Promotion Law” in January 2003 (Geng et al., 2010c). CP
is a strategy for addressing the generation of pollution as well as the
efficient use of resources at all stages of the production process. For
heavily polluting enterprises in printing and dying, foundry,
tannery, food processing, pulp and paper, electroplating and
chemical industries, CP is compulsory and plays a prominent role to
reduce their environmental externalities as well as their energy
intensity (Hicks and Dietmar, 2007). Peng et al. (2005) studied
barriers for promotion of clean technology in SMEs and revealed
that the exterior barriers of policy and financial barriers should be
stressed rather than the inner barriers such as technical and
managerial barriers. Eco-design refers to a systematic incorpora-
tion of environmental aspects into the design of production process
and the final product. It encourages heavily polluting companies in
manufacturing and process industries to generate more integrated,
efficient, and sustainable ways for production through innovative
design of production line (Negny et al., 2012). Hu et al. (2011)
proposed ecological utilization of leather tannery waste with
circular economy model. Whereas for companies in electric and
electronic sectors, eco-design involves proactively addressing
environmental attributes in the earliest stage of the product
development process in order to minimize the negative environ-
mental impacts of a product throughout its entire life cycle.
However, Yu et al. (2008) conducted a survey among 36 China’s
electrical and electronic manufacturers and found that there was
little evidence of eco-design in their products. Therefore, more
awareness raising efforts should be made. In terms of consumption,
green consumption should be promoted since it can facilitate the
use and purchase of environmentally friendly services and products
(Geng and Doberstein, 2008b). As for waste management, it
encourages the development of companies that can play a role as
scavengers (feeding the waste resources of other companies in the
economic system) and decomposers (using the waste resources
from both producers and consumers and then transform or recycle
them back into the system) (Geng and Cote, 2002) in order to build
up an industrial ecosystem.
At the meso-level, the practices include developing eco-
industrial parks and an eco-agricultural system; environmental
friendly design of the environmental friendly parks, and building
up a waste trading system and venous industrial parks (resource
recovery parks where environmental technology firms making
Table 1
Structure of the CE practices in China.
Micro (single object)
Production area(primary, secondary, Cleaner production
and tertiary industry) Eco-design
Consumption area Green purchase and consumption
Waste management area Product recycle system
Other support Policies and laws; Information platform; Capacity-building; NGOs
217
“green products” coexist) (Geng et al., 2009a). For the first area, the
eco-industrial park applies a concept of industrial symbiosis
through cooperative management of resource flow regarding
geographically clustered firms; improvements in environmental
performance can be coupled simultaneously with a decrease of the
overall production cost (Chertow, 2000). In an eco-industrial park,
firms share common infrastructure and services and trade indus-
trial by-products such as heat, energy, wastewater and
manufacturing wastes. It helps domestic companies to abate the
dependency on external resources and reduce their environmental
externality. In the agricultural sector, the eco-agricultural system
resembles industrial symbiosis aiming to utilize by-products and
wastes from crops and livestock (Yin et al., 2006). A second
program is mainly a commitment to the “green” design of resi-
dential communities in order to reduce energy, water, and land
consumption. Besides, a system should be designed where house-
hold wastewater and solid waste can be easily collected and recy-
cled. Ultimately, this eco-friendly human habitation environment
helps to restore the ecosystem in cities and boost the quality of life
(Zhu and Huang, 2005). Last, in the waste management area, the
regulating and expending of the waste trade market and building
a venous industrial park aims to increase the productivity and
economic benefit of the resource recovery industry.
At the macro level (city or regional scale), more complex and
extensive co-operative networks between industries and industrial
parks from primary, secondary and tertiary sectors emerge in the
production area. The 3R principles are achieved by the redesign and
rearrangement of a city’s infrastructure and industrial layout
according to regional characteristics, as well as phase-out of the
heavy polluting enterprises, while supporting high-tech industries
like bio-farming and the tourism industry etc. On the consumption
side, Zhu (2005) proposed to form the renting system in the city
based on the concept of Stahel’s service or functional economy.
Stahel (1986) suggested that in contrast of the current products
economy, the service economy shifts from selling and buying
products themselves to just the utilization of the products. It would
create new job positions such as labour-intensive service centres,
for workers who are no longer needed in centralized, automated
production units. Moreover, resource usage would be lowered as
products are no longer moved rapidly from the factory to the
customer and then to the landfill. In the area of waste management,
urban symbiosis should be encouraged. Urban symbiosis is an
extension for industrial symbiosis. It can be defined, in contrast of
the current products economy, service economy, as well as the
shifts from selling and buying products for industrial operations.
Similar to industrial symbiosis, urban symbiosis is based on the
synergistic opportunity arising from the geographic proximity
through the transfer of physical resources (waste materials) for
environmental and economic benefit (Geng et al., 2010a). Typical
activities include environmental-friendly products and equipment,
environmental test and analysis, utilization of recycled waste,
materials, green technologies and products, as well as the resto-
ration and protection of natural ecosystems (Dong and Fan, 2005;
Wang and Huang, 2006).
Meso (symbiosis association) Macro (city, province, state)
Eco-industrial park Regional eco-industrial network
Eco-agricultural system
Environmentally friendly park Renting service
Waste trade market Urban symbiosis
Venous industrial park
218 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227
Other supports that are mentioned in Table 1 include govern-
mental and non-governmental initiatives. The Chinese government
regulates the implementation of the CE through two agencies, the
Ministry of Environmental Protection (MEP) and the National
Development and Reform Commission (NDRC). The former agency
is in charge of the National Pilot Eco-industrial Park Program while
the latter one is in charge of the National Pilot Circular Economy
Program in cooperation with MEP and 4 other related ministries. To
date, 60 industrial parks have been selected as the national pilot
EIPs (Zhang et al., 2010). Apart from focussing at the meso-level, the
second program also covers missions at wider levels, such as a city,
or even a province.
A number of laws and policies related with CE have been released.
The first one is the “Cleaner Production Promotion Law”, which was
effective in January 2003. The second one is the amended Law on
Pollution Prevention and Control of Solid Waste, which took effect on
April 1st 2005. In the same year, NDRC announced eight initiatives in
order to facilitate the implementation of circular economy, including
initiation of the legislation process, pilot projects, the application of
economic instruments, research and development (R&D) efforts,
industrial restructuring, performance indicators, financing mecha-
nism, and training and education. Finally, on January 1st 2009, the
Circular Economy Promotion Law went into enactment. It is the third
law related to a circular economy in the world, after those of
Germany and Japan, and serves as a fundamental law guiding all
circular economy policies in China (See Ren, 2007).
Another concern on the current practices of CE is the develop-
ment of environmental Non-Governments Organizations (eNGOs).
Though governmental regulations and industrial efforts are crucial
for development circular economy, the underlying requirement for
its success requires attitude changes throughout the whole society.
This requires education, information, and the encouragement of
active public participation so as to increase people’s awareness.
NGOs, which have easy access to grassroots, possess large, if not
current, potential influence on promotion of the CE in society. No
particular studies have been investigated for uncovering the rela-
tionship between CE and eNGOs in China, but a rapid development
of China’s eNGOs can be seen. The total number of eNGOs increased
from 2768 in 2005 to 3539 in 20082and they are highly interacting
with the transnational environmental movement (Xie, 2011).
3. CE assessment
The successful development of CE requires a system of indica-
tors for its assessment. Good indicators are valuable metrics for
evaluating the soundness of its development and providing
guidelines for decision-makers to further develop effective policy
instruments. Consequently, governmental agencies and scholars
have intensely studied and made efforts on promoting unified
programmatic indicators. However, different implementation
levels of the CE and different characteristics of enterprises, indus-
tries or regions require different assessment indicators.
At the micro-level, each enterprise needs to tailor the firm-
specific indicators according to its characteristics, condition, and
existing problems. Thus, a unified and only one standard set of
indicators may fail to capture the full development of the circular
economy in different enterprises. Chen et al. (2009) developed a set
of indicators for one iron and steel enterprise, including 4 indicators
in the first-level reflecting CE’s 3R principle, 12 in the secondary
level, which are closely combined with the condition of the
enterprise with 3R principles, and 66 indicators with the concrete
2
The data is according to two national surveys conducted by the All China
Environmental Federation.
definition in the tertiary level. Some scholars, rather than focussing
on one enterprise, estimated the performance of one industry (Du
and Cheng, 2009; Xu, 2010; among others). The indicator system
appears to be more general and focus on the overall performance.
For instance, Du and Cheng (2009) used the Date Envelopment
Analysis model with 9 inputeoutput indicators and the Malmquist
productivity index as an alternative approach estimating the
economic efficiency of 47 iron and steel enterprises for the period
2003e2006. Others gave their attention to the enactment of CP in
China (Shi et al., 2008; Staff-Mestl et al., 2005; among others). For
instance, Shi et al. (2008) formed twenty indicators to estimate the
barriers inhibiting CP uptake. They consider four barrier categories:
policy and market, financial and economic, technical and infor-
mation, and managerial and organizational.
At the meso-level, academically, Geng et al. (2010b) developed
an emergy based indicators to systematically evaluate the overall
eco-efficiency of one industrial park, while practically, Chinese
governmental agencies NDRC and MEP have respectively published
two sets of tentative EIP evaluation indicator systems to ensure
objective and credible information on the status of EIP in China
(Geng et al., 2009b, 2012).
NDRC’s indicator system has four dimensions: resource output
rate, resource consumption rate, integrated resource utilization,
and reduction rate in waste discharge (see Table 2). Resource
output rate refers to the amount of production value in EIP gener-
ated from one unit of material, land, energy, and water consump-
tion. The higher ratio indicates the higher efficiency of resources. In
the second dimension, resource consumption rate, indicators
capture the energy and water intensity in EIP, an alternative way to
see how resource efficiency has been achieved. Resource compre-
hensive utilization rate is designed to examine the reuse rate of
industrial water and the recycling rate of industrial waste. The last
dimension examines the reduction in industrial waste discharge. It
is clear that these indicators have been built upon the 3R principles,
targeting at tracing the improvement of resource and energy
efficiency and thus reduce, reuse and recycle of industrial waste.
The MEP’s structure of indicators is different from the one
proposed by NDRC. Although the number of dimensions is the same
within the two sets of indicator systems, the concerns are different.
MEP has four dimensions, covering material reducing and recy-
cling, economic development, pollution control and administration
and management perspectives (see Table 3). The design of MEP’s
dimensions seems more appropriate as it considers the special
characteristics of China’s EIP. Unlike most North American models,
where industrial parks are predominantly manufacture-based,
China’s industrial parks have dual functions since both produc-
tion and residential based areas are included (Geng and Cote,
2003). Thus residents’ behaviours, awareness, and economic
well-being are closely related with the development of EIP. Addi-
tionally, this set of indicators focuses on, but not limited to, esti-
mating the realization of the 3R principles in EIP.
Another difference is that MEP grouped the industrial parks into
three groups, namely, the sector-integrated group, the venous
group and the sector-specific industrial parks,3 according to their
characteristics and subsequently designed three sets of indicators,
respectively (Geng et al., 2009a). Generally, indicators for those
three types of EIP remain the same, while a few minor changes lie
3
Sector-integrated group refers to parks with multiple industrial sectors, espe-
cially the development zones, which are the main form of Chinese industrial parks.
The venous industrial park refers to those resource recovery parks where envi-
ronmental technology companies and firms making “green products” coexist. The
sector-specific group refers to parks with primarily one main sector or anchor
tenant. Since most of the indicators are the same, here we only present the list of
indicators for sector-integrated park in Table 3.
 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227 219

Table 2 Table 3
Evaluation indicator system for the CE by NDRC (at the meso level). Evaluation indicator system for the CE by the MEP (at the meso level).

Dimensions No. Indicators Dimensions No. Indicators

1.Resource 1.1 Output rate of main mineral resources Economic 1.1 Industrial value added per capita
output rate 1.2 Output rate of land development 1.2 Growth rate of industrial value added
1.3 Output rate of energy Material reducing 2.1 Energy consumption per industrial value added
1.4 Output rate of water and recycling 2.2 Fresh water consumption per unit of industrial
2.Resource 2.1 Energy consumption per unit of production value value added
consumption 2.2 Energy consumption per unit of production in the 2.3 Industrial wastewater generation per unit of
rate key industrial sectora industrial value added
2.3 Water consumption per unit of production value 2.4 Solid waste generation per unit of industrial
2.4 Water consumption per unit of production in the value added
key industrial sector 2.5 Reuse ratio of industrial water
3.Integrated 3.1 Utilization rate of industrial solid waste 2.6 Utilization rate of industrial solid waste
resource 3.2 Reuse ratio of industrial water 2.7 Reuse ratio of middle watera
utilization 3.3 Recycling rate of industrial wastewater Pollution control 3.1 Chemical oxygen demand loading per unit of
4.Reduction 4.1 Decreasing rate of industrial solid-waste industrial value added
in waste generation 3.2 SO2 emission per unit of industrial value added
generation 4.2 Decreasing rate of industrial wastewater 3.3 Disposal rate of dangerous solid waste
generation 3.4 Centrally provided treatment rate of domestic
wastewater
Note: In total 13 indicators are categorized into 4 groups.
a 3.5 Safe treatment rate of domestic rubbish
Key industrial sector: iron, copper, aluminium, cement, fertilizes, and paper.
3.6 Waste collection system
3.7 Centrally provided facilities for waste treatment
and disposal
in the second category of indicators: material reducing and recy- 3.8 Environmental management system
cling. In the cases of sector-integrated parks and sector-specific Administration 4.1 Extent of establishment of the information
parks the set contains indicators related to material reduction and management platform
4.2 Environmental report release
and recycling. However, for venous parks, this group contains more
4.3 Extent of public satisfaction with local
indicators related to resource recycling and reuse, providing a more environmental quality
accurate assessment for the temporal development of EIP. 4.4 Extent of public awareness degree with
On the other hand, very few scholars studied the building of eco-industrial development
a particular indicator system. But there is evidence that certain Note: In total 20 indicators are categorized in 4 groups.
a
efforts have been made to evaluate and assure the development of Middle water is a Chinese term for the recyclable treated wastewater from
EIP. Geng and Cote (2003) suggested that Environmental Manage- wastewater treatment plants.
ment Systems such as International Organization for Standardiza-
tion 14001 can be used as a tool in China by industrial park
managers to improve their environmental performance. Dai (2010) of the CE was, in itself, an improvement of eco-efficiency that was
applied biological theory to the development of two indexes by the ratio of GDP and consumption of natural resources. Zhu and
which the author evaluated an EIP. The first index is the eco- Zhu (2007) built the eco-efficiency indicators for Shanghai,
connectivity of an EIP that defines the degree of connectivity which included the productivity of land, water, energy, and raw
among the enterprises or factories in an EIP; while the second index materials, as well as the productivity of sulphur dioxide, waste-
defines the degree of by-product and waste recycling in an EIP. water, and solid waste. Then, he combined them with IPAT4
At the macro-level, more studied have been conducted by function (Ehrlich and Holdren, 1971) for the evaluation and
academia. For the indicator system developed by NDRC, no major further planning of future scenarios on energy consumption and
changes have been made from the one regarding the meso-level pollutants generation.
except that one more dimension has been added. Under this Another issue about assessing the CE related indicator system
added dimension, the importance of recycling at the regional level is how to decide the weight of each sub-indicator prior to an
has been highlighted and materials such as iron scrap, non-ferrous aggregation. The often used methods include average weighting
metal, waste paper, glass, plastic, and rubber are given prior (Li and Zhang, 2005), which takes the same weight for every
consideration, which indicates that China’s political commitment indicator; principal component analysis (Meng and Shen, 2006;
for promoting circular economy heavily emphasizes resource effi- Xiong et al., 2008; among others) that identifies patterns in data of
ciency and conservation. high dimensions, and expresses the data in reduced dimension in
In contrast, scholars have suggested that aside from indicators such a way as to highlight their similarities and differences;
evaluating 3R principles or the environmental aspect, a more analytic hierarchy process (Chen, 2006; Qian et al., 2008; among
systematic evaluation system should be established by adding others), which decomposes complex problems into several
indicators of economic development and social aspects (Geng et al., elements and then incorporates them into different levels in order
2009a; Jiang, 2010.). For economic development, there were indi- to form a multi-level structure; fuzzy synthesis appraisal (Hao
cators for the state of economy like GDP per capita, growth of et al., 2009; Jiang, 2010) and the grey correlation degree method
economy (Wang et al., 2006; Qin et al., 2009.); indicators for the (Zhang and Huang, 2005), which both avoid personnel subjective
potential of the economy like export share, technology develop- judgement, and the full permutation polygon synthetic indicator
ment, capital investment (Chen, 2006; Yang et al., 2011); and method (Li et al., 2009). More detailed information about these
indicators for the structure of the economy (Yang et al., 2011; Li and studies, the measurement methods and findings have been listed
Zhang, 2005). As for the social aspects, unemployment rate, living in Appendix A.
area, Engel’s coefficient, and resident’s disposable income were the
most chosen indicators (Qian et al., 2008; Wang, 2009).
While majority of the scholars designed the indicators based on 4
(I) stands for environmental impact, (P) stands for the product of population,
3R principles and the goals of the CE, some other scholars (Zhu (A) stands for GDP per capita and (T) stands for environment impact per unit of
and Zhu, 2007; Zhou et al., 2007) argued that, the development GDP.
220 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227

4. Development of the CE in pilot cities
How has the CE been developed in China in recent years? We
answer this question by firstly assessing the performance in one
pilot city Dalian for the time period from 2006 to 2010. Thanks to its
geographic advantages, Dalian is one of China’s biggest industrial
centres and one of China’s most prosperous business areas. With
the aspiration to be a leading environmentally friendly city in
China, Dalian’s government has taken a series of initiatives to
implement the CE strategies.
Geng et al. (2009b) had comprehensively reviewed Dalian’s
focus and goals of the CE implementation for the period of 2006e
2010. Dalian had the objective that by 2010to: (i) further improve
land, water and energy use efficiency, and thus remove the
bottlenecks that restrict Dalian’s sustainable development; and (ii)
improve levels of reuse, recycling and recovery for solid wastes and
wastewater, and thus significantly reduce disposal amounts (Dalian
Municipality, 2007).
The data for 2005 and the goals by 2010 are derived from the
Dalian Municipality (2006). Thanks to the access to the consistent
statistical data for 2010, we are able to observe whether the stated
goals have been achieved and the appropriateness of CE practices in
Dalian. Ten indicators have been chosen to assess the close linkage
to Dalian’s industrial advantages and the prevalence regarding the
development of bottlenecks (Dalian Municipality, 2006). The indi-
cators are classified into four aspects: energy and water efficiency,
waste discharge, waste treatment and waste reclamation.
In 2007, the Dalian municipality decided to shut down small scale
facilities with high energy use rates; encourage advanced technol-
ogies and equipment for large manufactures, and regulate the
structure of industries by attracting services with low energy
intensity (Dalian Municipality, 2007). From Table 4 we can see that
energy consumption has been evaluated in terms of energy effi-
ciency with respect to the economic size and the produced industrial
value added. The results are impressive as the goals have been well
achieved. The increases of energy efficiency are 21% and 27% with
respect to GDP and industrial value added, respectively. As Fig. 1
shows, the economic growth rate of Dalian has been significantly
high and has fluctuated between 10% and 25% per year during recent
years. That is to say the reason behind the attained energy use effi-
ciency with respect to GDP would be ambiguous: it could either be
a reduction in the total consumption, or due to a greater expansion of
economic scale than that of the energy consumption. While the story
for other indicators is much clearer since the growth rate of the
industrial share are small varying from 4% to 3%, thus a rise in
efficiency is more likely to be caused by a reduction in energy
consumption. The results show a success of implementation of CE
policies in terms of energy use efficiency and could be set as an
example for other pilot areas with similar regional features.
A number of plans have been raised in order to improve the
efficiency of water use (See Geng et al., 2009b). As parts of these
plans, the Dalian municipality attempts to pursue both the supply
and demand-driven approaches to water management including
finding new water sources, minimizing water loss, and encouraging
water saving behaviour among residents through price incentives
and quota management. Apparently, those collaborations from
government, enterprises and citizens have been effective, leading
to a substantial rise in water use efficiency in the form of a 52%
reduction of water consumption per produced industrial value
added and a 67% reduction of water consumption per capita.
Waste management in Dalian focuses on reducing the quantity
of waste disposed and the safe disposal or reclamation of waste in
both industrial and residential sources (Geng et al., 2009b; Wang
and Geng, 2012). Enterprises are supported and encouraged by
government to initiate their CP efforts, pursue ISO14001 certifica-
tion, and embed the 3R principles set within the production
procedures. The municipality has established a waste reporting
system to trace and track all waste flows. For the residential side,
a demonstration project has been carried out in selected commu-
nities to improve the recycling rate of waste (Qu and Zhu, 2007;
Wang and Geng, 2012). From Table 4, we see a 17% decrease of
municipal waste generation per capita. The ability for wastewater
and solid-waste treatments has increased by 17% and 20%,
respectively. Moreover, performances of waste reclamation are
considerable and both exceed the set goals, implying a contribution
to reduce the consumption of virgin materials and waste disposal.
In sum, with the collaborative efforts from key stakeholders,
including government, enterprises and citizens, the implemented
CE policies have helped Dalian to accomplish the goals for resource
use efficiency and waste management. In the next part, we
compare Dalian’s performance with the other three CE pilot project
cities by using the same indicators.
Beijing, Shanghai and Tianjin are three economic developed
areas in China with different economic and demographic charac-
teristics (politically equal to one province). To have a more intuitive
view of CE’s development, we compare the percentage changes in
the individual indicators of the four cities (including Dalian) from
2005 to 2010 (See Table 5). And we also compute the relative
performance of each indicator in those four cities for the years of
2005 and 2010 (See Table 6).
From Table 5 we can see that all four cities have achieved fruitful
improvements in terms of energy and water efficiency. Compared
with the other three cities, the improvement of Dalian’s energy use
efficiency seemingly lags behind, but performs much better in
improving water use efficiency. Beijing has a large increase in
energy and water use efficiencies with respect to one unit of
produced GDP; Tianjin, with the largest share of industrial sectors
among the four cities (China City Statistical Yearbook, 2002e2010),

Table 4
Key CE indicators in Dalian in 2005 and 2010 and goals set in 2006.

Indicators Actual 2005 Goals by 2010 Actual 2010 Goals by 2010 Percent change
Resource Energy consumption per GDP (standard coal, tons/104RMB) 1.0 0.8 0.8 21% 21%
efficiency Energy consumption per unit of industrial value added 1.6 1.2 1.2 27% 27%
(standard coal, tons/104RMB)
Water consumption per unit of industrial value added 37.5 26.2 18.0 15% 52%
(tons/104RMB)
Water consumption per capita (m3/year) 186.9 e 62.1 e 67%
Waste Municipal waste generation per capita (kg/year) 163.7 e 136.4 e 17%
discharge
Waste Rate of municipal wastewater treatment 73% 90% 90% 17% 17%
treatment Rate of safe disposal of municipal solid wastes 80% 98% 100% 18% 20%
Waste Rate of treated wastewater recycling 10% 35% 42% 25% 32%
reclamation Rate of industrial solid waste reclamation 62% 75% 96% 13% 34%

Note: Municipal waste includes waste from both industrial and residential sources. Source: Dalian Municipality, 2006, 2011 and Liaoning Statistic Yearbook, 2006, 2011.
 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227 221

Fig. 1. Growth rate of GDP, industrial share and population of Dalian for the period of 2002e2009. Source: China City Statistical Yearbook, 2002e2010.

has improved its energy use efficiency mainly in the industrial
sector, which is much higher than its energy use efficiency at the
GDP level; Shanghai acts moderately to improve the energy use
efficiency while it has better performance in terms of per capita
water consumption.
As for waste management, Dalian reduces municipal waste by
17%, which is the highest among all cities. In contrast, Shanghai and
Tianjin, fail to reduce their waste generation levels in 2010 compared
with those of 2005. The reason may be that the economic develop-
ment in those cities drastically affects the total amount of production
and consumption, resulting in an increase in waste generation. For
the rate of wastewater treatment, Tianjin has a substantial
improvement, which is almost double higher than the others.
Shanghai is the only city that has a decreasing rate of wastewater
treatment. It happens when speed of wastewater generation
increases faster than the speed of technological development for
wastewater treatment. As for the rate of safe disposal of municipal
solid wastes, all cities have experienced a similar process and the
variations between them are relatively small. Last, for the waste
reclamation aspect, Shanghai again shows evidence of inability in its
goal achievement, with a figure of 5%change in the rate of treated
wastewater recycling, while such a figure in Beijing is 45%. For the
rate of industrial solid waste reclamation, Dalian’s progress (34%) is
better than that of Tianjin (27%), Shanghai (21%) and Beijing (16%).
Table 6 shows the relative performance of the four cities in 2005
and 2010. Since the best performance has been chosen as the
benchmark during calculation, thus the ratio “1” represents a fine
example and a reference point, and for other numbers, the smaller
the gap from “1”, the better the performance is suggested to be and
vice versa.
It is obvious that the CE has been developed over time, for all the
“1” cases have been found in the year of 2010. In general, Tianjin
performs the best since it has four “1”s out of nine, two in the
energy efficiency aspect and two in the waste management aspect.
Only for the indicator of water consumption per added industrial
value, the result is slightly lower than the other corresponding
cities. Beijing performs well in improving energy use efficiency and
treated water recycling but needs to improve the rate of municipal
wastewater treatment. The main reason is that several large energy
intensive companies (such as the famous Capital Steel and Yanshan
Petrochemicals) have been relocated out of the city during this
period. Dalian reduces waste generation and improves the rate of
safe disposal for municipal solid waste significantly while energy
use efficiency needs to be further improved. The challenge that
Dalian is facing is that more energy intensive companies (especially
chemical and petrochemical firms) have been recruited during this
period. Shanghai, with the highest rate of economic growth among
those four cities performed the worst. Though it has cut the water
consumption per added industrial value largely, the per capita
water consumption is the highest among others. That is to say, the
consumption of water for the industrial sector may be reduced but
not the total water consumption. Additionally, Shanghai scores the
lowest in three out of the four indicators, which evaluate the extent
of waste reusing and recycling, suggesting a poor performance in its
waste management.
In sum, the implementation of the CE in China has been carried
on effectively in Dalian and the other three pilot cities since the goals
set for Dalian have been fully realized in 2010 and the performances
regarding the other 3 pilot cities are impressive, especially in terms
of resource use efficiency. The primary reason behind the potential
success of the improvement would be the government’s decision to
focus its efforts on those sectors, which will yield the greatest short-
term impact, such as heavy industry relocation and applying
instrument regulations which are likely to be the most effective
sectors. Second, those four pilot cities are more modernized, richer
and have more advanced energy efficient technologies and equip-
ment than other regions in China, thus it is relatively easier for these
four cities to raise their energy use efficiency. However, data credi-
bility makes our study uncertain. A lack of trust in China’s economic
statistics persists, and data on economic growth and energy
consumption could be messaged to produce the required energy
intensity estimates (Andrews-Speed, 2009).
The clear disparity among these four cities does exist. In general,
Tianjin performs the best while Shanghai needs more work, espe-
cially in the area of waste management. The reasons are manifold
such as different natural, social, economic, and environmental
conditions, as well as different policy enforcement level by local
government.

Table 5
A comparison of key CE indicator in four cities during 2005e2010.

Indicators Beijing Shanghai Tianjin Dalian

Resource efficiency Energy consumption per GDP (standard coal, tons) 62% 31% 21% 21%
Energy consumption per unit of industrial value added(standard coal) 66% 36% 76% 27%
Water consumption per unit of industrial value added 69% 58% 43% 52%
Water consumption per capita 45% 71% 30% 67%
Waste discharge Municipal waste generation per capita 11% 4% 1% 17%
Waste treatment Rate of municipal wastewater treatment 3% 8% 31% 17%
Rate of safe disposal of municipal solid wastes 15% 10% 14% 20%
Waste reclamation Rate of treated wastewater recycling 45% 5% 5% 32%
Rate of industrial solid waste reclamation 16% 21% 27% 34%

Source: Data are collected from Statistical Yearbook of Liaoning, Beijing, Shanghai, Tianjin, and Dalian in 2006 and 2011.
222 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227

Table 6
The relative performance of four cities in 2005 and 2010 for each indicator.

Indicators Beijing Shanghai Tianjin Dalian

2005 2010 2005 2010 2005 2010 2005 2010

Resource efficiency Energy consumption per GDP (standard coal) 2.58 1.00 2.06 1.42 1.88 1.48 2.02 1.60
Energy consumption per unit of industrial value added(standard coal) 3.03 1.03 1.67 1.06 4.09 1.00 1.82 1.33
Water consumption per unit of industrial value added 3.59 1.11 2.35 1.00 2.06 1.18 2.21 1.06
Water consumption per capita 2.39 1.32 4.50 1.33 1.42 1.00 3.88 1.29
Waste discharge Municipal waste generation per capita 2.66 2.37 2.71 2.83 1.03 1.04 1.20 1.00
Waste treatment Rate of municipal wastewater treatment 0.78 0.81 0.90 0.82 0.69 1.00 0.73 0.90
Rate of safe disposal of municipal solid wastes 0.82 0.97 0.81 0.90 0.85 0.99 0.80 1.00
Waste reclamation Rate of treated wastewater recycling 0.25 1.00 0.33 0.24 0.55 0.63 0.17 0.71
Rate of industrial solid waste reclamation 0.83 0.99 0.76 0.97 0.73 1.00 0.63 0.98

Note: The numbers are obtained by dividing each row data by the best performance for each indicator respectively.

5. Challenges and barriers towards the successful CE
implementation
The performance in four pilot cities demonstrates a promising
future for developing the CE in China. Several challenges that may
slow down or prevent the implementation of the CE have been
recognized and repeatedly stressed by a number of scholars,
including lack of reliable information, shortage of advanced tech-
nology, weak economic incentives, poor enforcement ability of
legislation, poor leadership and management, lack of public aware-
ness, and lack of a standard system for performance assessment.
Geng and Doberstein (2008a) raised the importance of infor-
mation for enterprises to be able to plan and design firm-specific
scenarios for their optimal reduction, reuse and recycle activities.
For each enterprise, not only internal information would be needed,
but also, the need to be a part of a larger economic system or web.
Thus, the inter-linked relationship with other firms or areas should
be also considered. Therefore, an efficient information system is
crucial if decision-makers are to find more environmentally and
financially beneficial ways to plan and manage their resources and
structures. However, such systematic information systems are rare
in China. In most cases, accurate information is not available to
decision-makers, or is not conveyed in a timely manner. Moreover,
due to fragmented management frameworks, different kinds of
information often belong to different agencies, which further
decrease the efficiency in information exchange.
Secondly, technology is a key factor in the development of
a circular economy. Each of the three CE principles requires
advanced technology and development and the updating of facili-
ties and equipment. However, the overall technology level in China
is characterized as backward and due to insufficient financial and
technology support, the development within the area of environ-
mental technology is not satisfactory. SMEs, generally accounted
for 99.88% of the total number of manufacturing establishments in
China, are the key players in this respect (Shi et al., 2008). Most of
them have no or just a few incentives to carry on “greener activi-
ties” in terms of waste reduction and reclamation, since changing
or updating equipment is usually both time- and money-
consuming while the potential economic benefit is limited. An
alternative way is to transfer the technologies from developed
countries, but it also appears to be risky due to the “locked-in
effect”, which implies a strong dependence on exporter’s supports
when technique failures occur (Xing et al., 2011).
The third constraint is the apparent continued unwillingness
for the government to use suitable economic and financial
instruments to complement the preferred administrative
approach (Wang et al., 2008). On the one hand, insufficient
financial support from banks and inadequate public tax incentives
prevent enterprises from innovating more environmental friendly
technologies. On the other hand, producers see little economic
incentives to save energy, material and water because the price
increase for these resources have been tightly constrained, and
even if the price has gone up, producers can easily transfer the
cost to consumers in the form of higher sale prices. Andrews-
Speed (2009) further traced underlying reasons for this unwill-
ingness regarding price regulation by combining the current
policies in other sectors. He pointed out that China’s economic and
industrial policies had been devoted to promoting heavy industry,
infrastructure and manufacturing, which were closely associated
with the price of energy and materials. Additionally, the govern-
ment’s insistence on keeping tight control on end-user energy
prices is derived from the desire to protect poor consumers as well
as constraining inflation.
Another prevailing problem in China is the poor enforcement of
legislation. This deficiency remains because: enforcement is
superficial; excessive time exists between noncompliance and
enforcement; available punishment for noncompliance is inade-
quate; injured parties are not properly compensated and some
environmental crimes receive administrative instead of criminal
punishment (Wang, 2007).
Fifth, government’s management system has been questioned in
China due to the complex structure of government agencies, poor
accountability of local governments and straight-forward corrup-
tion. The implementation of the CE over a sustained period
required integrated management efforts, including the top leader-
ship, pro-active participation from major actors at all levels of
government, and transparency and predictability in both the
administrative and economic policy instruments (Ma and Ortolano,
2000). As a result, failures in the management of energy, materials
and environment in China to a greater extent can be attributed to
deficiencies in these respects.
Sixth, practices in Germany and Japan indicate that public
participation is indispensable to the development of a CE program. It
could be more important for China due to both the complex nature of
the concept, and the array of potential contributions that more than
one billion Chinese consumers can make (Geng and Doberstein,
2008a). In fact China lacks the human and institutional capabilities
to encourage public participation in a CE. Also, environmental
management programs and facilities at many Chinese academic
institutions are limited. Even in a well-performed pilot city like
Tianjin, residents have limited awareness and a poor understanding
about the CE program (Liu et al., 2009). A more surprising survey
result has been given by Xue et al. (2010) whereby 16.70% of the
interviewed officials (252 in total) had just heard of CE, indicating
that there is still a need for government officials to acquire a more
sophisticated understanding of CE.
Last but not least, the Chinese government needs to build a more
complete system for performance assessment with concerns
covering areas such as standardizing the process of data collection,
calculation and submission, adding prevention-oriented and
 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227
absolute energy/material consumption reduction indicators, to
setting specific and quantitative goals in each local government
(Geng et al., 2012). Given the autonomy, local governments are fully
in charge with developing their own way to collect, evaluate and
submit their data to the central government. Without a transparent
monitoring and auditing mechanism, the validity and accuracy of
the provincial data collected are brought into question. Further, no
specific goals and values that consider development guidelines are
provided by the central government to the local governments. Such
a reality may discourage the eagerness of local governments as they
do not know to what extent they need to improve or what goals
they should achieve. Due to imbalanced economic development,
resource endowment, technology level and public awareness on CE,
the national government should consider setting up region-specific
indicators, rather than using the same national standards, so that
even poor western regions have incentives to pursue such targets
(Geng, 2011). Otherwise, the statistical departments in such regions
may simply provide statistical data to fit different political purposes
(in this case gaining access to national financial subsidies) since
they are not politically independent agencies and are often pres-
surized by other governmental agencies.
6. Conclusion and policy suggestions
Various studies on CE have been conducted during the last
decade, especially in China where both resource depletion and
environmental issues are severe. Those studies are not organized for
unified effort and progress. Development research grants in this field
are allocated in a fragmented way, with lack of a visible integrative
effort. Therefore, the aim of this paper is to provide an overall review
on CE in China. It is clear that CE provides a way to ease the tension
between economic development and carbon dioxide emission;
addresses the urgent pollution and resource scarcity problems; and
helps China’s enterprises and industries to improve their competi-
tiveness and remove green barriers in the international trade.
Our review results show that current practices are being carried
out at the micro, meso and macro levels simultaneously and cover
the areas of production, consumption, and waste management.
Other supports, from government and non-governmental organiza-
tions, help to promote, regulate and monitor the CE implementation.
We also find that appropriate performance indicators can help
identify the key issues. At the enterprise level, indicators are
tailored to individual firms or an industry’s characteristics. At the
EIP level, two governmental agencies NDRC and MEP have issued
two different indicator evaluation systems. The former one focuses
exclusively on the realization of 3R principles and the latter addi-
tionally considers EIP’s impact on economic, environmental and
social aspects. At the regional level, where the research studies are
the most abundant, the indicator systems are generally based on
CE’s ultimate goals and 3R principles (Wang et al., 2006; Yang et al.,
2011; Geng, 2011), but few scholars developed the indicator system
based on the ecological efficiency theory (Zhu and Zhu, 2007; Zhou
et al., 2007). As for the weight of each sub-indicator prior to an
aggregation, different methods have been used, such as principal
component analysis, average weighting, analytic hierarchy process,
fuzzy synthesis appraisal.
In the empirical section, we conducted a case study in Dalian
and compare the changes with the other three pilot cities, Beijing,
Shanghai, and Tianjin. The results show that the Dalian munici-
pality has well achieved its goal for developing the CE in 2010.
Compared with the other three pilot cities, Dalian does fairly well in
waste management but lags behind in terms of energy efficiency
due to recently recruited energy intensive firms. In general, Tianjin
performs the best while Shanghai needs more work especially, in
the area of waste management. Accompanying the other scholarly
223
efforts of estimating CE’s implementation at the macro level (see in
the Appendix A), it is obvious that local governments have had
some success in turning their local economies into circular ones.
With regards to where China as a whole stands in the CE adoption
process, it is difficult to gauge due to the lack of clear, standardized
quantitative measurements and goals.
Other challenges that impede the successful implementation of
the CE in China are: lack of reliable information, shortage of
advanced technology, poor enforceability of legislation, weak
economic incentives, poor leadership and management, and lack of
public awareness.
The recent issued 12th five-year plan (2011e2015) has put
forward the implementation of the CE to a deeper and wider extent
in China. It is evident that CE presents a unique policy strategy for
the systemic consideration of resource depletion, energy conser-
vation and waste reduction. The question is whether this trend of
improvements can be sustained, or whether the country reverts to
the old practice and standards considering the complexity, diver-
sity and great regional discrepancy of this economy.
In order to adopt the CE as future economic model, immense
efforts are required to perfect the existing measures as well as to
deploy a wider range of policies to overcome these challenges.
As international practices reveal that economic measures
remain one of the most effective means of conserving the envi-
ronment and resources, China’s government should promote
economic incentives through policies to stimulate the behaviours
of both enterprises and residents under the principles of the CE.
The current measures, for example pricing reforms, and prefer-
ential tax policies should be developed continuously and accord-
ingly. New measures, say environmental taxes, insurance for
liability resulting from environmental damage, cap and trade
system, and environmental labelling, should be explored and be
included in legislation.
The government needs to continue its support for the major
technologies necessary for the CE. This requires that the govern-
ment accurately identifies key technological areas and projects in
line with current and long-term requirements for the economy and
supports research efforts in the field of energy savings, alternatives,
and recycling, and eventually boosts the nation’s capacity in
proprietary technological innovation through R&D investment at
both enterprise and academic levels.
In order to improve public awareness and participation, activi-
ties related to the CE concept such as TV promotions, newsletters,
achievement exhibitions and workshops should be carried out
periodically. Such initiatives can provide platforms at which
experiences from different parts of the world and from different
institutions could be objectively reviewed. Moreover, enterprises
could strengthen their mutual understanding and friendship
through information exchanges, which will be the solid foundation
for further collaboration on promoting the CE.
Improvements regarding the enforceability of legislation as well
as the management system within the government are also
impressive. It calls for a reform in judicial management mecha-
nisms, a more transparent monitoring and auditing mechanism. On
the other hand, the government should seek standardized methods
for data collection, calculation and submission procedures so as to
ensure a more accurate assessment of CE’s development.
Acknowledgement
The third and fourth authors were supported by the Natural
Science Foundation of China (71033004), the Chinese Academy of
Sciences (2008-318), and the Ministry of Science and technology
(2011BAJ06B01).
 224
Appendix. A. Summary table of the empirical literature on circular economy in China

Author(s) Topic of research Study period Dimensions (number of indicators) Estimation/computation method Summary of findings and conclusion
Wang et al. (2006) Evaluating regional CE: a case study 1986e2003 Economic development; Resource Analytic hierarchy process The analysis showed that the CE is developing
of Jiangsu Province reduction; Recycling, Pollution (16) at a steady speed. According to the trend of
development from 1986 to 2003, the official
goal will not be achieved until 2022.
Wang et al. (2006) Evaluation and diagnosis of obstacle 1985e2003 Social and economic development; Analytic hierarchy process and The results showed 10 obstacles that are
for CE in Jiangsu’s industry sector Resource reduction; Obstacle analysis impeding the CE’s development in Jiangsu’s
Recycle and reuse; industrial sector. Among which energy
Waste reduction; efficiency was the biggest obstacle. The
Safety of resources and average growth of CE indicators: in general
environment(35) (10.21%), waste reduction (17.63%), resource
reduction (9.56%), recycle and reuse (3%).
Chen (2006) Evaluation of CE for 3 different Experience and Economic development; Analytic hierarchy process Shanghai(metropolitan) scored 93, Yinchuan
economic-scale cities Shanghai, consulting Living environment; (big city in the west) scored 76, Rizhao
Yinchuan, Rizhao, Structure feature; (medium sized city in the east)scored 65
Resource utilization
Social Development (38)

B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227

Qian et al. (2008) Assessment of development level
of CE and the countermeasure in
Qingdao City
Meng and Shen Research on the CE evaluation of
(2006) Central Plain cities
Xiong et al. (2008) Comprehensive evaluation of circular
economy development in Shaanxi
Wang (2009) Evaluation of CE on 29 Chinese cities
Yang et al. (2011) Integrative evaluation on the
development of CE of Shaanxi
Zhang and Huang Research on CE indicator system
(2005) and demonstrable assessment for
Nantong city
Hao et al. (2009) Design of CE index at the city level
Jiang (2010) Empirical Analysis of Regional CE
development of Jiangsu, Heilongjiang,
Qinghai Provinces
Recent year data Resource efficiency; Analytic hierarchy process The comprehensive index of CE development
Environmental impacts; of Qiandao is 0.733, i.e. the mid-circular state;
Social development (28) identify the bottlenecks in the development of
CE. Development countermeasures are put
forward to the existing problem in the
development of CE in Qingdao.
2003 Economic development; Principal component analysis Economic development has proposed the most
Green development; influence on CE, followed by reduction of
Social development (25) resource usage and social development.
1998e2004 Resource reduction; Principal component analysis From 1998 to 2004, the performance of CE has
Resource efficiency; been gradually improved. Waste per produced
Waste generation; unit of GDP decreased and utilization of solid-
Resource reuse and recycle; waste improved.
Economic aspects (19)
2006 Economic development; Principal component analysis 16 cities’ comprehensive score had been over
Reuse and recycle; Resource reduction; zero, and it indicates that these cities’ CE
Emission reduction; development is more balanced than others in
Social development (10) all aspects; 12 cities’ comprehensive score had
been below zero and there is a huge gap in the
goal of CE for them. Also pilot cities scored
lower than the non-pilot cities.
2004e2008 Economic development; Resource Principal component analysis The results showed that CE’s development in
efficiency; Resource recycling and and Analytic hierarchy process this province is in steady upward developing.
reuse; Environment protection; Pollution Different indicators have different trends.
reduction (59)
Data of 2002 and Economic development; Grey correlation degree method In 2002e2007 the goal is to focus on reducing
goals in 2020 Resource reduction; pollution and resource consumption; In
Waste reduction; 2008e2010 the goal is to focus on
Resource recycle; eco-environment protection, reducing pollution
Eco-environment (12) and management; in 2011e2020 the goal is to
control for a balanced development among all
aspects.
e Economic development; Fuzzy synthesis appraisal The indicator system should be built according
Social stability; to the features of the city. The index system
Resource consumption; can be classified into main index system and
Environmental Protection (16) assistant index system.
e Resources consumption; Fuzzy synthesis appraisal; Jiangsu had higher development in CE than other
Environmental disturbance; Comparison evaluation method two provinces. Helongjiang needed to adopt
Recycling; energy conservation. The CE development and
Social development (16) efficiency in recycling need powerful economic
strength security.
Qin et al. (2009) Integrative evaluation and case study
on the development level of CE in
Guangdong
Zhu and Qiu (2007) Analytical tool for urban CE planning
and its preliminary application for
Shanghai
Zhu and Qiu (2008) Eco-efficiency indicators and their
demonstration as the CE measurement
in China
Li et al. (2009) Measurement indicators and an evaluation Plan of 2004e2020 Economic growth and efficiency;
approach for assessing urban sustainable
development: case for Jining
Li and Zhang CE evaluation index system in resource
(2005) based cities
Du and Cheng Evaluating CE efficiency of 47 iron and
(2009) steel industry establishments in China
Peng et al. (2005) Studies on barriers for promotion of
clean technology in SMEs of China
Li and Su (2012) Evaluation of the circular economy
development level of Chinese chemical
enterprises
2005 Resource usage reduction; Resource
recycling and reuse;
Resource and environment protection;
Economy and social development (23)
1990e2004 Productivity of resource and waste (7)
1990e2005 Productivity of resource and waste (7)
Ecological and infrastructural construction;
Environmental protection;
Social and welfare progress (52)
Recent data in Resource factors; Economic factors;
two cities Eco-environmental factors;
Social factors (21)
2003e2006 Input: water, energy, labour productivity,
financial support.
Output: wastewater, waste gas and solid
waste.
(9 for inputs, and 4 for outputs)
2002 20 barriers are grouped into four major
categories: Policy and market barriers,
Financial and economic barriers, Technical
and information barriers and Managerial
and organizational barriers.
Enterprises’ Economic development, resources exploiting, Weighted sum model
confidential pollution reducing, ecological efficiency,
data development potential (18)
Obstacle analysis
Eco-efficiency and IPAT
Eco-efficiency
Full permutation polygon
synthetic indicator method
Same weight
Data envelopment analysis and
Malmquist productivity index
The Analytic Hierarchy Process
(AHP)
Different status of development in 21 cities in
Guangdong owing to the dissimilarities of
natural and environment condition as well as
social and economic basis.
It lists three most serious problems in the case
of Shanghai: energy supply, management of
waste gas and solid waste.
The eco-efficiency of natural resource input in
China has increased from 1990 to 2005. But it is
not enough for China to decouple the economic
growth from natural resources.
Value of a synthetic indicator for sustainable
development of Jining was 0.24 in 2004, which
indicates a low level of sustainable development.
According to the ecological plan of 2004e2020,
the indicator will improve to 0.45 in 2007, 0.62
in 2010, and 0.90 in 2020.
Strategies for developing CE should be made
according to the features of the different cities
and external restricting factors to promote
B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227
sustainable and all-round development of CE.
The circular economy efficiency of iron and steel
industry on the whole is not high, but has
a fluctuated upward trend. The main factor that
affects the enhancing of CE efficiency of iron and
steel industry is pure technical efficiency.
The exterior barriers of policy and financial
barriers should be stressed rather than the
inner barriers of technical and managerial
barriers. Absence of incentives, lax enforcement
of regulations and high initial capital cost were
the most important barriers to adoption of clean
technologies in China.
The analysis on the CE development of Beijing
Petrochemical New Material Base indicates that
the CE development in this base is in a transitional
stage from the transitional development to the
circular mode. In the future more importance
should be attached to the efficiency of resources-
exploiting and its potential development to raise
the level of CE development
225
226 B.W. Su et al. / Journal of Cleaner Production 42 (2013) 215e227

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