5 - Financial Resources and Mechanisms
5.1 The implementation of China's Agenda 21 and
its associated Priority Programmes is an important strategic step in implementing
the Chinese Government's policies of "focusing on economic development"
and facilitating the implementation of the "Two Steps to Development"
(viz., ensuring the provision of basic necessities for all by the year 2000,
and attaining the economic level of moderately developed nation by the year
2050), aimed at achieving the strategic objective of modernization. The
achievement of each of the goals of the "Two Steps" will also
contribute to rapid, healthy and sustainable national economic development.
Since implementing China's Agenda 21 is fully in line with the fundamental
interests of the present and future generations of the Chinese people, and
will contribute to the shared future of humankind, both the extensive participation
and strong support from all walks of life in this country and that of international
community are important. A practical approach for implementing China's Agenda
21 is to integrate sustainable development strategies into various plans
and programmes for national economic and social development and to encourage
the government, financial community, general society and overseas individuals
to invest in the sustainable development of the country.
5.2 The Chinese Government will be the principal
investor for implementing China's Agenda 21, through financing the plans
and programmes of various ministries and local governments and gradually
including the Priority Programmes of China's Agenda 21 into overall plans
for national economic and social development, so that a strong investment
flow can be stimulated, supplemented by other sources of investment from
home and abroad. More efforts are needed to seek additional sources of financing
and to gradually increase the proportion of investment for sustainable development
activities. Obviously, it is key to implementing the sustainable development
strategies of China's Agenda 21.
5.3 Financial resources and mechanisms:
- (a) Formulate action plans for integrating China's
Agenda 21 and its Priority Programmes into national economic plans and
social development plans; based on existing management systems, strengthen
the guiding role of strategies for sustainable development and steadily
expand financing for China's Agenda 21;
(b) Encourage the financial community (banks and
insurance companies) by providing them with the latest information on technologies,
enterprises and market developments; allow the financial community to pool
funds to offer loans and insurance policies for sustainable development
(c) Establish and improve financial and taxation
systems and formulate policies for enterprises which are favourable to
sustainable development; encourage enterprises to invest in strengthening
their own capacities for sustainability by offering preferential tax treatment
for those making such investments, by penalizing those who pollute on the
basis of "polluter clean up the pollutants", and by establishing
sustainable development awards;
(d) Encourage the participation of the whole society,
by encouraging work and labour investment in various forms; formulate associated
policies to safeguard the economic interests of the people who get involved
in sustainable development and make it a sustainable common cause for the
(e) Make use of extensive publicity and market
mechanisms to attract foreign funding (including those from bilateral or
multilateral agreements, from overseas Chinese and foreign entrepreneurs)
to finance important sustainable development programmes; encourage investment
in newly emerging environmental protection and tertiary industries, especially
in key sectors such as energy, transportation, science, technology and
agriculture; special efforts will be made to attract "additional funds"
from developed countries.
5.4 Financial management and operational mechanisms:
- (a) By managing sectoral planning and centralized
information processing, the national financial appropriation system will
link plans at different levels together under the principle of sustainable
development, which will in turn form a broad matrix management system;
advocate a funding system based on fees so as to enhance the re-investment
capabilities of the state financial system;
(b) Based on the functioning of economic levers
and market mechanisms and in accordance with the principle of "sharing
both responsibilities and benefits", encourage shareholding systems
and joint ventures; to improve the capacity for re-investment, policies
promoting low taxation and high accumulation will be proposed for those
industries which are in the public interest, but which have low economic
returns, such as the treatment of pollutants, the recycling of wastes and
activities associated with cleaner production technologies and the upgrading
(c) China will establish three Agenda 21 Development
Funds required for the implementation of China's Agenda 21. These funds
will include: a fund for building China's capacity for sustainable development,
a technology transfer fund and a technological cooperation fund, all of
which will fully absorb and effectively utilize the investments from both
at home and abroad.
5.5 There are three programme areas in this chapter:
A. Integrating China's Agenda 21 into National
Economic Development Plans
Basis for action
5.6 Financial investment by the Chinese Government
will be the primary source of funding for the implementation of China's
Agenda 21. It will guide other investments and will serve as a guarantor
for the investments.
5.7 Existing national economic plans will play
key roles in realizing the strategic objectives of China's Agenda 21 under
the macro-guidance of sustainable development strategies.
5.8 The objectives and essence of China's Agenda
21 which serves as the guide document for formulating the Ninth Five-Year
Plan and the Plan for 2010 are embodied in the Ninth Five-Year Plan for
national economic and social development, especially in important fields
such as clean energy, comprehensive utilization of mineral resources, cleaner
production, sustainable development of agriculture protection of ecosystem,
transportation, telecommunications and the environmental protection industries.
5.9 Improve public awareness of sustainable development
through education and training; decision makers, planners and management
people should utilize concepts of sustainable development throughout the
entire planning and implementation process.
5.10 Within the State Council, establish a joint
meeting and planning system involving appropriate ministries or commissions
to facilitate exchanging information and discussing developments, thereby
improving the linkages amongst various plans and consequently, their sustainability.
5.11 Improve planning and information systems for
the sustainable development of the national economy to enhance the capacity
for tracking, surveying and conducting cost-benefit analyses and assessments
for national sustainable economic development.
B. China's Agenda 21 Development Funds
Basis for action
5.12 China's Agenda 21 Development Funds will be
established with major donations from both at home and abroad. They will
play a critical role in channelling investments for sustainable development,
in carrying out important sustainable development activities such as formulating
policies, laws and regulations, and capacity building, and in financing
important scientific and technological activities.
5.13 Relevant departments of the State Council
will co-establish China's Agenda 21 Development Funds.
5.14 Formulate China's Agenda 21 Priority Programmes
and establish a programme management information system; widely publicize
these at home and abroad to generate greater understanding and support.
5.15 Gradually establish three funds: a Technology
Transfer Fund, a Technological Cooperation Fund and a Capacity Building
5.16 Formulate regulations, such as General Regulations
for China's Agenda 21 Development Funds, and establish associated management
mechanisms, in order to attract investment from home and abroad.
C. Financial, Taxation and Economic Legislation
for Sustainable Development
Basis for action
5.17 Establish healthy financial and taxation systems
and formulate associated economic laws and regulations, with sustainable
development as a fundamental consideration, to ensure the participation
of all segments of society in implementing Agenda 21. In order to fulfil
the needs of a socialist market economy, existing financial and taxation
systems, and economic legislation and associated policies are being reformed.
This provides a good opportunity for establishing financial and taxation
systems, and economic legislation and associated policies, which are oriented
towards sustainable development.
5.18 China possesses a large, powerful contingent
of economists, jurists and economic policy experts. Based on the abundant
knowledge and information acquired during the last decade's economic reform
activities, they are now in a good position to conduct appropriate detailed
studies and provide a reliable scientific basis for formulating financial,
taxation and economic legislation with Chinese characteristics.
5.19 Formulate and put into operation new financial
and taxation systems, and new economic legislation and technological policies
favourable to sustainable development.
5.20 Ministries or departments concerned should
organize studies on finance and taxation, economic legislation and technological
policies which focus on the compatibility of and consistency amongst different
policies and legislation and to regional and systemic differences which
can affect their implementation.
5.21 Start to improve the financial and taxation
systems and the legal system for the economy, within the context of sustainable
development in China. Establish demonstration sites or areas to gain experience
necessary for revising and promulgating the new laws.
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