Chinese consumers and the shifting status of private eco-labels in China
By Aline St-Laurent-Guérin
China’s economy has achieved stunning growth and progress towards sustainable development over the last decades. Annual GDP growth has averaged 9.63 percent since 20011, and the average GDP in 2007 (14.2) was twice that of 1999 (7.6)2.In the last two decades, rising incomes in China have lifted more than 800 million people out of poverty3 and created a huge influx into China’s middle class.
A key feature of a surging middle class is the development of an extensive domestic market to respond to the increasing demand4. Faced with the environmental consequences of two decades of unbridled production, China has already introduced policies such as public standards and Green Consumption Guidelines to steer Chinese consumers away from unsustainable lifestyles and industries.
As the Chinese consumer base continues developing, there is growing demand for higher quality, safer and healthier goods and services. In 2011, the International Trade Center (ITC) (the joint agency of the World Trade Organization and the United Nations) estimated that the global market for environmental goods and services had reached US $866 billion and projected that it would rise to US $1.9 trillion by 2020.5 This is particularly true in China, which was ranked in 2010 as the second biggest global exporter and importer of environmental goods, with a market for environmental goods was estimated at total value of 426,610 million £.6
China’s current standard and certification system is relatively new and has been built largely from scratch since China joined the World Trade Organization (WTO) in 2001. When it comes to production standards in China, there are several government bodies with a mandate to decide not only which standards to develop, but also the processes and fora used to develop them. Standards and eco-labels are typically developed using a top-down approach with directives coming from up high in the central government. This top-down approach has helped China’s standards and conformance systems develop quickly and has allowed for rapid advances in the sectors of renewable energy and clean technologies7, but has also created limits with little opportunities for independent and private stakeholder voices to be heard up until now. We are beginning to see slow shifts in the government’s stance with the recent involvement of various stakeholder groups in consultation processes to improve the China Environmental Label (CEL), China’s third party verified (Type 1) government-owned eco-label as per ISO 14024 requirements. The CEL covers 91 categories of products including automobile, electronics, building materials, textiles, packaging supplies, daily chemical articles and more. It is being solely managed by China Environmental United Certification Center (CEC) of the Ministry of Environmental Protection (MEP)8.
Unfortunately, China’s government standards continue to suffer from a lack of transparency and information on certification processes, as well as inconsistent implementation, which leads to serious problems of compliance and consumer confidence in certification.9 For instance, China has a reputation for significantly overusing pesticides in tea as well as other crops. Cases of cheating organic inspection by mixing with conventional product are common and consequently, consumer trust in Chinese organic certification is low.10
In China, a strong belief still prevails: that the government must solve important environment, health, safety and quality challenges. Many Chinese decision makers believe that the government is more reliable and capable than the private sector to carry out effective standards, enforcement and compliance, so the government often steps in to offer authoritative solutions.11 This may be why the Chinese government has, thus far, been reluctant to accept the introduction of private eco-labels in the consumer market. In fact, in China’s National Plan on Implementation of the 2030 Agenda for Sustainable Development adopted in September 2016, China’s actions on targets 12.1 and 12.7 mention:
- Advance legislation on sustainable consumption and green standards setting; (12.1)
- Encourage and guide consumers to make sustainable consumption through pricing, taxation, fees and other means; (12.1)
- By 2020, build preliminary standards and systems for green government procurement, which is environment-friendly, energy and water efficient, circular, low-carbon and renewable. Implement government procurement policies that promote the development of SMEs, support small and micro enterprises’ efforts to get government procurement contracts; (12.7)
- Strengthen their capacity to engage in government procurement processes. (12.7)
On one hand, it is very positive that the Chinese government chose to include the promotion of green standards into their action plan, but on other hand, private standards or voluntary standards have once again been left out of the picture. This means that Chinese consumers do not get to benefit as widely from some established certifications and private standards such as MSC and FSC.
However in recent years, China’s attitude towards private standards has given way to a more moderate stance to enable the addition of private label to products in certain sectors. The emergence of new types of private standards such as Rainforest Alliance or UTZ has broadened the use of standards to include considerations such as environmental protection, improving livelihoods, enhancing traceability, or differentiation from competitors.12 Less than four years ago, private certification organizations such as Rainforest Alliance and UTZ were not operational in China, and the Fairtrade Labelling Organisation (FLO) had only just begun the process of recruiting its first representative in China.13 As for sustainable seafood production, the first cases of certified fisheries and aquaculture products occurred in 2015.
This recent change, while welcomed by environmental specialists, poses a challenge for both producers and consumers as the capacity to recognize and understand the implications of private labels is still relatively low in the country. Furthermore, trust in standards, whether they are public or private, remains to this day minimal. “The apparent lack of green consumers in China may have to do with the fact that consumers do not trust the environmental claims of the products that are available, and that there is a wide perception that the government and businesses—rather than consumers—should be more responsible.”14
This is why awareness-raising campaigns on private eco-labels will be a crucial part of changing China’s consumption patterns and achieving the targets set out by the China Green Consumption Guidelines launched jointly by 10 Chinese Ministries. This year’s China Sustainable Consumption Week mobilized consumers to help build their awareness and confidence in private eco-labels. Furthermore, it was of particular importance for the topic of sustainable fisheries since the Marine Stewardship Council (MSC) had opted to simultaneously host a Sustainable Seafood Week to capitalize on the consumer mobilization of the event. The Sustainable Seafood Week informed consumers about the MSC logo, including the guaranties it provides and its role in preserving life-sustaining marine ecosystems. Another new participant in this year’s edition of China Sustainable Consumption Week was the Roundtable on Sustainable Palm Oil (RSPO). This event marked their first public awareness awareness campaign in China. RSPO is currently facing the challenges of not being able to add their logo onto products, but also that the effects of Palm Oil deforestation are not being felt directly in the Chinese environment and thus are of less concern to the Chinese consumer.
The addition of private eco-labels to the Chinese domestic market has the potential to foster real changes in consumption patterns in China. “A survey of relatively wealthy and well-educated middle-class consumers in urban China found that “protecting the environment” was an important factor affecting consumption decisions, even more important than variables such as price, brand and fashion.”15 Such eco-labels will help guide these willing consumers towards the right products.
Thus, the China Sustainable Consumption Week was pivotal for private labels in all sectors, not just seafood, but also organic farming, renewable energy, palm oil, deforestation and more, as once consumers start trusting private labels and recognizing their value added, they will begin asking for their use in other sectors. By fostering the demand for food produced sustainably and accountable companies, private labels are pushing China’s consumption and production towards a greener economy.
Alejandro Guarín& Peter Knorringa (2014) New Middle-Class Consumers in Rising Powers: Responsible Consumption and Private Standards, Oxford Development Studies, 42:2,196-216, DOI: 10.1080/13600818.2013.864757
 China environmental labeling consists of two types, based on criteria of ISO 14020 and ISO14024. Type I (third party verified) labeling applies to products in the scope of existing technical standards issued by MEP. For products without existing standards, applicants can apply for type II labeling, where self-declaration is verified by CEC.
Blackmore, E. and Keeley, J. with Pyburn, R., Mangus, E., Chen, L. and Yuhui, Q. (2012) Pro-poor certification: assessing the benefits of sustainability certification for small-scale farmers in Asia, Natural Resource Issues No. 25. IIED, London.
Elise Owen (2010) Standards in China: Behind the Headlines. Available at: http://www.chinabusinessreview.com/standards-in-china-behind-the-headlines/
Chan, R. (1999) Environmental attitudes and behavior of consumers in china, Journal of International Consumer
Marketing, 11(4), pp. 25–52:Alejandro Guarín& Peter Knorringa (2014) New Middle-Class Consumers inRising Powers: Responsible Consumption and Private Standards, Oxford Development Studies, 42:2,196-216, DOI: 10.1080/13600818.2013.864757
MasterCard Worldwide Insights (2007) Dynamic drivers of China’s consumer market – the middle class, modernwomen and DINKs (MasterCard and HSBC). Available at: http://www.mastercard.com/us/company/en/insights/pdfs/2007/ChinaConsumerDrivers-S.pdf: Alejandro Guarín& Peter Knorringa (2014) New Middle-Class Consumers inRising Powers: Responsible Consumption and Private Standards, Oxford Development Studies, 42:2,196-216, DOI: 10.1080/13600818.2013.864757