Investment, Trade, and Environment Main Topics Report

The report analyzes the complex relationship between China's foreign direct investment (FDI), outward direct investment (ODI), and international trade with the environment. It identifies a historical trend of 'exchanging environment for economy' and argues that China must transition from a passive recipient of green technology to a proactive leader in global green transformation. Key recommendations include reforming FDI policies to prioritize high-tech and low-carbon sectors, enhancing the corporate social responsibility (CSR) of Chinese enterprises operating abroad, and actively participating in the formulation of international trade and investment rules to safeguard developing countries' interests while combating climate change.

• China's foreign trade has historically resulted in a significant 'embedded' pollution surplus, where the country shoulders the environmental costs of production for goods consumed abroad. In 2007, the CO2 surplus embedded in China's foreign trade was 1.381 billion tons, with embedded CO2 in exports being 3.29 times higher than in imports.
• Foreign Direct Investment (FDI) in China has historically been concentrated in environmentally sensitive, high-energy-consumption sectors. In 2009, manufacturing accounted for 51.95% of total FDI, and many of these investments were in 'environmentally sensitive industries featuring high energy consumption and high emissions'.
• China's Outward Direct Investment (ODI) is geographically uneven, with the vast majority concentrated in Asia, Latin America, and Africa. By the end of 2009, investment in Asia accounted for 75.5% of the total volume, while Africa accounted for 3.8%.
• Chinese ODI enterprises often face challenges regarding their international image and social performance, particularly concerning the employment of local workers and adherence to environmental standards. While state-owned enterprises (SOEs) generally perform better, small and medium enterprises (SMEs) are sometimes accused of 'transfering high-polluting industries in order to avoid domestic regulations'.
• There is a documented gap in the environmental information disclosure practices of transnational corporations operating in China compared to their home countries. For example, Shell China's sustainable development reports were found to be 'simpler, without global vision' compared to reports from Shell's US and Holland branches.
• The report identifies a 'lock-in' effect where early investments in backward production capacity and high-emission technologies can hinder future technical upgrading and innovation in Chinese industry.
• China's energy intensity is significantly higher than that of developed nations. In 2008, China's energy intensity was 3.9 times that of the U.S., 6.3 times that of the U.K., 4.2 times that of France, 7.5 times that of Japan, and 4.7 times that of Germany.
• The report argues that China should transition from a 'rule-taker' to a 'rule-maker' in international trade and investment. It suggests China should actively participate in WTO negotiations on Environmental Goods and Services (EGS) to ensure its interests and those of other developing countries are protected.
• To facilitate green transformation, the report recommends that China formulate a 'green trade list', reduce export tax rebates for high-pollution products, and encourage the import of green technologies through subsidies and administrative support.
• The report suggests establishing a 'sustainable development fund' for ODI projects, particularly in natural resource extraction, to provide alternative development programs for local populations after resources are exhausted.

APA

International Institute for Sustainable Development (2012). Investment, Trade, and Environment Main Topics Report. https://www.iisd.org/system/files/publications/cciced_main_topics_report.pdf

Chicago

International Institute for Sustainable Development. Investment, Trade, and Environment Main Topics Report. 2012. https://www.iisd.org/system/files/publications/cciced_main_topics_report.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Investment, Trade, and Environment Main Topics Report |date=2012 |url=https://www.iisd.org/system/files/publications/cciced_main_topics_report.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2012investment, author = {{International Institute for Sustainable Development}}, title = {{Investment, Trade, and Environment Main Topics Report}}, institution = {International Institute for Sustainable Development}, year = {2012}, url = {https://www.iisd.org/system/files/publications/cciced_main_topics_report.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }