Economics – Regional Knowledge Sharing Initiative

Yellow River Ecological Corridor (YREC) Seminar Series: Institutions and Governance for a Water Secure and Resilient Yellow River Basin

The Yellow River Basin is one of People’s Republic of China’s (PRC) most important water sources, supplying water to more than 420 million people and supporting agriculture, hydropower, and industrial production. However, this precious resource is threatened by a range of factors, including population growth, urbanization, and climate change, requiring action to ensure sustainable, safe and resilient water resources management. It is important to understand the challenges facing the Yellow River Basin and the main drivers of water scarcity. For example, rapid urbanization has increased pressure on water resources, and climate change has led to changes in precipitation patterns and increased water variability. At the same time, increasing demand for water for agriculture and industry has led to overexploitation and pollution of water resources, contributing to a decline in water quality and quantity.

The Asian Development Bank (ADB) is supporting the PRC Government to strengthen the sustainable management of natural capital in the PRC’s second largest river basin. The Yellow River Ecological Corridor (YREC) Program was established in 2020 adopting a comprehensive ecosystem-based management approach for water resources and land management by considering the river basin as an ecological corridor. The program is being implemented with the support from the following PRC Government agencies involved with resource management and economic development of the Yellow River Basin: (i) the Yellow River Conservancy Commission (YRCC); (ii) the Ministry of Ecology and Environment (MEE); (iii) Foreign Economic Cooperation Center, Ministry of Agriculture and Rural Affairs; (iv) Ministry of Water Resources (MWR); National Development and Reform Commission (NDRC); (v) National Forest and Grassland Administration; (vi) Nine provinces in the Yellow River basins;(vii) Chinese Academy of Science and other academic institutes; and (viii) private sectors and NGOs.

Balancing economic growth and sustainable development in the Yellow River basin is a challenging task. Against this background, the YREC builds on three key principles: (i) protect the basin’s fragile ecological environment, (ii) address the severe condition of the water resources and natural capital (balancing use and preservation), and (iii) promote high-quality green development and sustainable livelihoods. The YREC includes a program of lending, non-lending, and policy interventions across four main thematic areas, including: (i) natural resources management and biodiversity conservation, (ii) climate-resilient and sustainable smart agriculture, (iii) climate change mitigation and adaptation, and (iv) integrated urban-rural green development.

The recent event during the United Nations Water Conference in New York (23 March 2023) on Resilient Rivers to Healthy Coasts for People and the Planet: An Integrated River Basin Management Approach saw ADB, development partners, and PRC government counterparts, such as the MWR, reaffirm their commitment to the global 2030 water agenda. Guoying Li, Minister of Water Resources, and Woochong Um, Managing Director General of the ADB, framed the session and jointly emphasized the importance of ADB’s technical assistance, continued collaboration on policy dialogue, joint knowledge work to address the pressing water challenges in the PRC and sharing solutions through south-south cooperation in the region with other ADB regional member countries.

YREC Seminar Series objectives

To provide a platform in which the PRC partners (ministries, administrations, provinces, etc.) socialize and discuss the issues in the Yellow River they jointly will have to solve.
To get ownership at PRC level of the YREC program.
To disseminate YREC results, in particular for technical assistance and loan projects.
For ADB, to learn from the PRC partners about the challenges in the basin.
South-south cooperation among PRC and other ADB regional developing member countries
To explore opportunities of cooperation, knowledge sharing and ADB financial support in the context of the current ADB-PRC Country Partnership Program (2021-2025).

Objectives of the Henan onsite hybrid seminar (3 days)

The onsite seminar is hosted by ADB and co-hosted by YRCC and MEE, with external participation of sector relevant PRC agencies and international experts. The objectives of this seminar are to:

Share different institutions technical and policy expertise on effective water management and adaptation practices in the Yellow River Basin and beyond.
Conduct site visits to assess the basin’s water security issues to discuss tailored solutions.
Promote South-South cooperation on institutional strengthening to address water security policy reform.
Explore opportunities to strengthen and expand cooperation between ADB and PRC in the context of the current country partnership program.

Location: Onsite – Henan Province (Zhengzhou city), hybrid (online participation for Day 1 and Day 3)

Join via Zoom: https://adb-org.zoom.us/j/93414545175?pwd=QjJvU21tcS82eEFDTHFyVUFHc0UwZz09

Meeting ID: 934 1454 5175
Passcode: YREC230524

Day 1, Planning for Integrated River Basin Management: The Yellow River Protection Law and the Yellow River Basin’s Master Plan

International examples have demonstrated that a holistic approach to water resources management within an appropriate political, institutional, and regulatory environment can ensure safe, resilient, and sustainable water resources management for all stakeholders in a basin.

With the right approach and continued efforts, it is possible to ensure a future where the Yellow River Basin continues to provide water security to the millions of people who depend on it. This requires strengthening institutional cooperation among various stakeholders, including government agencies, businesses, and communities, to ensure safe, resilient, and sustainable water resources management for the basin’s people and its natural resources. This can be achieved through effective policies and strategies that generate institutional momentum, streamline processes, and encourage data sharing, with the support of multilateral financial institutions such as ADB.

To ensure safe, resilient, and sustainable water resources management in the basin, adaptive policies and regulations must be developed within this cooperative environment, including the adoption of innovative water-saving technologies, best practices, and nature-positive investments.

The Yellow River Protection Law, drafted by different line ministries and several departments is a crucial cornerstone to achieve water security across the basin. It covers all county-administrative regions within the seven provinces and two autonomous regions within the catchment area and aims to protect the environment and water resources, prevent water disasters, and promote sustainable development. While the Yellow River Protection Law puts forward important components to achieve safe, resilient, sustainable, and integrated water resources management in the Yellow River Basin, stakeholders continue facing leadership, technical capacity, investment, and coordination gaps. To help overcome these limitations, the Ministry of Water Resources and the Ministry of Ecology and the Environment have put forward planning instruments for the = development and management of the Yellow River’s water resources. Such plans aim to improve the basin’s management, including water conservation and disaster risk management, significantly through an integrated approach and proper coordination among provincial governments and local agencies by 2030.

Day 2, Site Visits

Including the hydraulic laboratory downstream of the Yellow River, the Yellow River basin museum, the embankment to protect the river from floods, and Xinshan city along the Yellow River.

Day 3, South-South Learning and Building Climate Resilience through Adaptation Planning in the Yellow River Basin

Adaptation and resilience play a key role in reducing exposure and vulnerability to climate change. Climate responses and adaptation options, along with their enabling conditions and synergies with mitigation, can contribute to achieving climate resilient development. 7 Use of integrated and multisector solutions help differentiate responses based on climate risks, increases the feasibility and effectiveness of adaptation options in multiple sectors, while addressing social inequalities. The PRC’s Ministry of Ecology and Environment (MEE) drafted the National Strategy for Climate Adaptation (NSCA) 2035. The strategy will strengthen policy coordination, improve governance mechanisms for decision-making processes, advance knowledge, and tools for climate impact analysis risk assessment, and promote adoption of nature-based solutions. Implementing national adaptation targets in the Yellow River basin is listed as a government priority under PRC’s NSCA 2035. Yet, three main fundamental challenges remain unaddressed to achieve this goal: (i) a science-based and comprehensive climate impact analysis to assess climate risks across sectors for the entire basin was not conducted; (ii) a strategic adaptation plan to help achieve national adaptation targets at basin level has not yet been developed; and (iii) lack of adequate knowledge and capacity among agencies and regional stakeholders for assessing climate risks, and identifying and selecting adaptation measures.

Agenda:

ADB-PRC Policy Dialogue: Macroeconomic Policies for Transition to Net Zero

As the world’s largest emitter, the PRC has committed to peaking carbon emissions before 2030 and achieving carbon neutrality before 2060. Transition finance, which provides financing to high carbon-emitting industries, provides an important financing option for the PRC to support its decarbonization activities. Asian Development Bank PRC Resident Mission is organizing a seminar on this topic and the objective of the discussion is to obtain deep understanding of macroeconomic policies supporting transition to net zero.

Meeting venue: ADB PRC Resident Mission, 17th Floor, Tower A, China World Tower, 1 Jian Guo Men Wai Avenue, Beijing (Please bring your ID to register and enter the building)

Join via Zoom: https://adb-org.zoom.us/j/94539091441?pwd=Uy9wdXNrbzF2azY0NVZ6SU9XbmVFZz09

Meeting ID: 945 3909 1441
Passcode: ADBC2023

Contact: Wen Qi, wenqi@adb.org

Agenda:

Agenda

Time	Program
9:00 – 9:25	Welcoming Remarks and Context Setting Moderator: Akiko Terada-Hagiwara, Principal Country Specialist, People’s Republic of China Resident Mission (PRCM), Asian Development Bank (ADB) Welcoming Remarks: Aiming Zhou, Deputy Country Director, PRCM, ADB (5 min) Context Setting: Cui Ying, Deputy Dean, International Research Institute of Green Finance, Central University of Finance and Economics (15 min) Q and A (5 min)
9:25 – 10:15	Panel Discussion Moderator: Tang Min, Counsellor, State Council, PRC Panelists: (40 min) Lei Yao, Deputy Director, Financial Research Institute, People’s Bank of China Zhao Gangzhu, Senior Researcher, Institute of Finance and Sustainability Sun Tianyin, Deputy Director, Green Finance Research Center of the National Institute of Finance, Tsinghua University Chen Yaqin, Assistant of General Manager of Green Finance Department, Industrial Bank Open Floor Discussion (10 min)
10:15 – 10:30	Discussion Summary and Next Steps Moderator: Akiko Terada-Hagiwara, Principal Country Specialist, PRCM, ADB Discussion Summary (15 min): Tang Min, Counsellor, State Council, PRC Albert Park, Chief Economist and Director General of Economic and Research and Regional Cooperation Department, ADB

Asia’s Climate Challenge: Trade, Investment, and the Global Net-Zero Transition

The Asian Development Bank (ADB), in partnership with the Tsinghua University’s School of Economics and Management, is pleased to invite you to an in-person event to discuss the key points and highlights of the two reports ADB published recently: Asian Economic Integration Report (AEIR) 2023: Trade, Investment, and Climate Change in Asia and the Pacific, and the Asian Development Outlook (ADO) Thematic Report 2023: Asia in the Global Transition to Net Zero, on Tuesday, 16 May 2023 at 4:00 p.m. Beijing Time. This event will take place at A508 of Jianhua Building in Tsinghua University in Beijing.

One of ADB’s flagship reports, AEIR 2023 features a theme chapter, Trade, Investment, and Climate Change in Asia and the Pacific, which examines how trade and investment have played a key role in the region’s development, but at a cost to the environment. The chapter discusses how trade and investment contribute to climate change and explores ways in which governments can mitigate the impact.

Asia in the Global Transition to Net Zero explores what a global transition to net zero could mean for Asia and the Pacific under a range of climate policy scenarios and provides recommendations. The report is part of the ADO 2023 published on 4 April, which provides analyses and insights about developing Asia’s growth and inflation outlooks for 2023 and 2024.

Register here.

Agenda:

Agenda

Time	Program
	Modetator: Akiko Terada-Hagiwara, Head of Economics and Strategy Unit, ADB Resident Mission in the PRC
16:00 – 16:05	Opening Remarks Zhou Aiming, Deputy Country Director, ADB Resident Mission in the PRC
16:05 – 16:10	Welcome Remarks He Ping, Deputy Dean, School of Economics and Management, Tsinghua University
16:10 – 16:35	Presentation on Asia in the Global Transition to Net Zero: ADO 2023 Thematic Report David Anthony Raitzer, Economist, Economic Research and Regional Cooperation Department, ADB
16:35 – 17:00	Presentation on highlights of Asian Economic Integration Report 2023 Jong Woo Kang, Principal Economist, Economic Research and Regional Cooperation Department, ADB
17:00 – 17:40	Panel discussion Moderator: Albert Park, Chief Economist and Director General of Economic and Research and Regional Cooperation Department, ADB Panelists: Gao Yuning, Associate Professor, School of Public Policy & Management, Tsinghua University Shi Xinzheng, Associate Professor, School of Economics and Management, Tsinghua University Teng Fei, Professor and Deputy Director of the Institute of Energy, Environment and Economy, Tsinghua University.
17:40 – 18:00	Open Floor Discussion

The PRC’s Road to Recovery and Resilience

With the lifting of COVID-19 restrictions, the PRC’s economy looks set for a recovery in 2023 — even as global economic growth is projected to slow down amid tightened monetary policies in several advanced economies in response to high inflation.

Economic conditions in many less developed economies are also challenging. Fiscal balance sheets are stretched due to spending on anti-COVID-19 measures, steep rises in public debt, and headwinds from difficult external conditions. Against this backdrop, a stronger Chinese economy is not only beneficial to the country, but also supports global economic recovery.

Reviving consumer demand is key to recovery and growth in the PRC. Pent-up demand from the past three years — when households cut spending during lockdowns — must be unleashed to stimulate new demand for goods and services. A complete revival of consumption might take time as households readjust to post-COVID-19 opening, and there’s always the risk of further surges in infections. But a revival must be pursued nonetheless, as consumption is key to sustainable long-term economic growth in the PRC.

Higher consumption will benefit the services sector amid a structural economic shift that will see this sector replace infrastructure investment and manufacturing as the fulcrum of the PRC’s economic growth in the coming decades. This shift will drive growth across a host of business sectors including wholesale and retail trade, transportation, travel and logistics, as well as in education, eldercare, health, information technology and hospitality.

This is not to say that continued public and private investments in infrastructure and manufacturing are not needed; they are, particularly to support growth in the immediate and the short term. The government’s efforts to loosen housing market policies, and the intent to streamline regulations for private businesses and reform State-owned enterprises, are also critical to recovery prospects.

But only a vibrant services sector can drive longer-term growth. It’s also important from a perspective of combating climate change, as service businesses are generally less energy-intensive than construction and industry. Consequently, a greater policy emphasis on developing services can help the PRC make progress on sustainable growth while achieving its decarbonization and climate change targets.

Three specific policy interventions can instigate sustainable longer-term growth in the PRC that will benefit the Chinese people while helping spur global prosperity.

The first step is to introduce policies that strengthen the demand side of the economy, especially household consumption. In line with the PRC’s vision of “common prosperity,” we suggest a focus on redistribution through progressive taxation and social transfers. This will not only boost household demand, particularly among lower-income groups with higher propensities to consume, but also reduce income inequality.

Households will also consume more if they have better access to better quality public services for health emergencies, social protection for the aging population and the unemployed, and education for their children. All these public goods will ease the perceived need to shore up money for a rainy day.

The second entry point is to provide public policy support for the services sector on the same level as industry, including through tax incentives, access to credit, and competition.

While State-owned enterprise reforms have expanded the role of the private sector in manufacturing, many services are still provided by these enterprises, which are sometimes protected from private competition. Supporting the service sector’s development will also mean opening more sectors to foreign direct investment to diversify the scope and quality of services provided.

Finally, the PRC needs to prepare for rapid demographic aging that will increasingly curb economic growth. For the first time in 60 years, the PRC’s population fell in 2022 as the birth rate dropped to a record low. Though economic uncertainties might have contributed to this, the underlying causes include rising per capita incomes, high housing prices in cities, and insufficient support for families facing high child-rearing costs.

An aging population can inhibit growth and demand higher social expenditure and pension payments, which limit fiscal space for other important public expenditure. Policy measures are also needed to mitigate the impact of demographic aging on the labor force.

These measures could include increasing the retirement age, improving occupational healthcare so people can work longer, raising the female workforce participation rate through accessible childcare and flexible work hours, and increasing labor mobility by further relaxing the hukou (household registration) system.

The end of the lockdowns is an opportunity to consolidate consumption and services as the prime movers of the Chinese economy. By seizing this moment, the PRC’s economic recovery can deliver long-term prosperity and resilience at home and abroad.