International Experience in Establishing Indicators for the Circular Economy and Considerations for China

The report provides a framework for China to move from the rhetoric of a circular economy (CE) to implementation by establishing a robust system of indicators. It argues that material flow analysis (MFA) is the most relevant tool for this purpose, as it allows for the monitoring of physical material and energy flows across macro, meso, and micro levels. The document details key MFA indicators—such as Direct Material Input (DMI) and Total Material Requirement (TMR)—and examines how the European Union, United States, and Japan have institutionalized these measures to track eco-efficiency and the decoupling of economic growth from environmental pressure. It concludes with recommendations for China to integrate CE indicators into national accounts and collaborate with international practitioners.

• China's approach to the circular economy (CE) is structured across three levels: the micro level focuses on firm-level cleaner production audits; the meso level emphasizes eco-industrial networks (EINs) and parks (EIPs); and the macro level focuses on city, municipality, or province-scale coordination of material and energy flows.
• Material flow analysis (MFA) is identified as the most direct tool for developing CE indicators, utilizing mass balancing and input-output analysis to monitor the throughput of process chains from extraction to disposal in physical units, typically tons.
• The report defines several core MFA indicators: Direct Material Input (DMI) combines materials with economic value used in production and consumption; Total Material Requirement (TMR) adds hidden flows to DMI; Domestic Processed Output (DPO) tracks outflows to air, water, and landfills; and Domestic Material Consumption (DMC) subtracts exports from DMI.
• Eco-efficiency measures alone are insufficient for fast-growing economies like China because the rate of economic growth may exceed the rate of efficiency improvement, leading to an overall increase in environmental pressures.
• The European Union has institutionalized MFA through Eurostat and the European Environment Agency, calculating indicators such as DMI, DMC, TMR, and physical trade balance to assess resource productivity and the relative decoupling of GDP growth from resource requirements.
• In the United States, MFA efforts are less institutionalized than in the EU, though the World Resources Institute has developed a pilot MFA database for over 160 primary material inputs to address data gaps in synthetic chemicals.
• Japan's MFA system is driven by its reliance on imported raw materials and limited waste disposal space, focusing on a 'sound material cycle' through indicators for material and energy flows, water cycles, and 15 priority environmental themes.
• The report recommends that China integrate its CE and MFA indicators with the System of National Accounts, specifically following the System of Integrated Economic and Environmental Accounts (SEEA) conventions to ensure data availability.

APA

Pintér, L. (2006). International Experience in Establishing Indicators for the Circular Economy and Considerations for China. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/measure_circular_economy_china.pdf

Chicago

Pintér, László. International Experience in Establishing Indicators for the Circular Economy and Considerations for China. International Institute for Sustainable Development, 2006. https://www.iisd.org/system/files/publications/measure_circular_economy_china.pdf.

Wikipedia

{{cite report |last1=Pintér |first1=László |title=International Experience in Establishing Indicators for the Circular Economy and Considerations for China |publisher=International Institute for Sustainable Development |date=27 November 2006 |url=https://www.iisd.org/system/files/publications/measure_circular_economy_china.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{pintr2006international, author = {Pintér, László}, title = {{International Experience in Establishing Indicators for the Circular Economy and Considerations for China}}, institution = {International Institute for Sustainable Development}, year = {2006}, month = nov, url = {https://www.iisd.org/system/files/publications/measure_circular_economy_china.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }