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

This 2006 report, prepared for the World Bank, provides a framework for establishing a Circular Economy (CE) indicator system in China. It advocates for the use of Material Flow Analysis (MFA) to monitor resource efficiency and decoupling of economic growth from environmental pressure, drawing on experiences from the European Union, the United States, and Japan.

• The National Development and Reform Commission (NDRC) of China defines the Circular Economy (CE) as a system of interlinked businesses that enhance economic and environmental performance through the exchange of materials, where one facility's waste (including energy, water, and materials) becomes another's input, effectively practicing industrial symbiosis.
• China has implemented CE initiatives across three levels: the micro level (firm-level CP audits and performance ratings), the meso level (development of eco-industrial networks and parks), and the macro level (city, municipality, or province-scale coordination of material and energy flows).
• Material Flow Analysis (MFA) is identified as the most relevant approach for CE indicators, utilizing mass balancing and input-output analysis to monitor the throughput of process chains, including extraction, manufacturing, consumption, recycling, and disposal.
• Key MFA indicators for measuring a national economy's metabolism include Direct Material Input (DMI), Total Material Requirement (TMR), Domestic Processed Output (DPO), Domestic Material Consumption (DMC), Total Material Consumption (TMC), Physical Trade Balance (PTB), and Net Addition to Stock (NAS).
• 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 pressure. Therefore, absolute material use measures tied to specific targets are necessary.
• In the European Union, MFA is institutionalized through Eurostat and the European Environment Agency, with some countries like Germany publishing physical input-output tables (PIOTs). The EU uses indices such as GDP/TMR to measure the relative decoupling of GDP growth and resource requirements.
• The United States lacks a fully institutionalized comprehensive MFA framework, though the World Resources Institute (WRI) has produced detailed reports and a pilot MFA database. US findings suggest that dematerialization has not progressed significantly, as small improvements are often offset by absolute increases in resource consumption.
• Japan's MFA system is driven by its reliance on imported raw materials and limited waste disposal space. Its 'sound material cycle' objective is monitored through indicators for material and energy flows, water cycles, and Driving force – State – Response (DSR) indicators for 15 priority environmental themes.
• The report recommends that China integrate CE indicators with the System of National Accounts (SNA) and the System of Integrated Environmental and Economic Accounts (SEEA) to ensure data availability and institutional stability.

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} }