As one of the world’s largest economies, China has a major role in enhancing global trade and fighting climate change. To do this, the country has to work on making its supply chains more environmentally and socially sustainable, writes WRI’s Manish Bapna.

As we approach the Year of the Rat and begin a new 12-year cycle of the Chinese zodiac, three profound challenges face the world: how to build a more stable and efficient trading system, tackle climate change, and protect biodiversity.

China has a pivotal role to play in all three. As the world’s second-largest economy, China’s evolving trade relations, especially with the United States, have huge global economic implications.

As one of the world’s largest greenhouse gas emitters, China’s actions will be carefully monitored as countries are scheduled to meet in Glasgow, Scotland, in November for the next major international climate conference. And as host of the most important international conference on biodiversity in decades, China is expected to make concrete commitments to move this agenda forward. What may be less apparent is that the three challenges are interlinked.

One bold response to all three is for China to make its supply chains more environmentally and socially sustainable, especially for agricultural commodities such as soy, beef, palm oil and timber.

Why is this important?

Global demand for these commodities, often sourced from tropical countries, is surging as population and affluence increase. This is causing significant forest loss and degradation: roughly 40 per cent of tropical deforestation over the past decade is a result of expansion in agriculture. This loss of forest cover, along with the impact of other agriculture production and land use, in turn, contributes about 23 per cent to global greenhouse gas emissions.

A stable climate is not the only casualty. One million animal and plant species are now threatened with extinction, more than ever before in human history, according to a 2019 UN report. The climate and Earth’s living web of nature are the planet’s “operating systems,” and their disruption poses massive threats to human well-being and development.

Sustainable production of commodities depends on the ecosystem services that a healthy environment provides, including soil formation and retention, water quantity and quality, and natural pest controls. Deforestation can disrupt these vital processes and impede production.

So it is in China’s interest to invest in commodity supply chains that are stable and sustainable over the long run, and China’s government agencies and businesses are currently considering how to move in this direction.

Why China?

Nearly two years ago, China integrated the concepts of “ecological civilisation” and “a community of shared future for mankind” into its Constitution. It can now bring these concepts to life by focusing on its supply chains. As the world’s largest importer of soybeans, timber and beef, China’s motivation to shift decisively toward greening its supply chains is both economic and political.