Foreword from the Chairman

paulson_0102_VerticalI believe that the U.S.-China relationship is the most important bilateral relationship in the world, and it is critical that we work together to solve the world’s most important problems. One of our greatest challenges is how to pursue a new economic growth model that takes environmental sustainability into account. In China in particular, air pollution is affecting health and quality of life today, while climate change threatens the nation’s future. These are not purely environmental challenges; they pose a critical threat to China’s economy and long-term prosperity.

The paper makes the case for a truly sustainable economic growth strategy for China.

That’s why I am so pleased to share the results of this Paulson Institute paper, “China’s Next Opportunity: Sustainable Economic Transition.” The paper makes the case for a truly sustainable economic growth strategy for China, one that takes air quality and climate change into account as part of a larger strategy aimed at diversifying China’s economy away from its historic dependence on heavy industry. We focus specifically on the Beijing-Tianjin-Hebei region (also known as Jing-Jin-Ji), which is home to growing cities, fast-urbanizing suburbs and rural areas, and core industrial strongholds like the steel powerhouse of Hebei Province. The paper presents an overview of this region and its need to move to a more sustainable economic growth strategy, with particular emphasis on those industries that are the largest current contributors to the region’s emissions profile.

Overall, this initial paper in our Jing-Jin-Ji series confirms that a sustainable economic transition is not only necessary, but also entirely achievable for this region. Just as China is now taking the lead in many areas of clean energy technology today, the Jing-Jin-Ji region has the potential to play a leadership role in showing how to help existing industries like those in Hebei become more efficient and cleaner, while also attracting new renewable and efficient energy technologies as tomorrow’s economic drivers.

We do not approach these issues through rose-colored glasses. We acknowledge that many aspects of China’s sustainable economic transition are challenging, especially for local leaders in cities currently powered by heavy industrial growth. But we also point to lessons from U.S. cities that have overcome industrial decline through economic development strategies that focus on a more diverse industry mix, including clean technology manufacturing and deployment.

This is just the beginning: in the coming year, the Paulson Institute will provide in-depth analysis of specific industry sectors in the Jing-Jin-Ji region, along with specific recommendations for transition strategies for these sectors. In doing so, we will continue to build on our strong relationships with Chinese and U.S. leaders and experts who are already developing real-world solutions to the particular challenges faced by leaders in the Jing-Jin-Ji region.

At the end of the day, we believe that this paper and its conclusions can serve as the basis for deeper understanding and cooperation between the U.S. and China. Nothing reinforces the benefits of cooperation more than jointly tackling the environmental and economic challenges that affect us both. With this paper, we invite you to join us in that journey, towards a more stable and prosperous future.


Henry M. Paulson, Jr.

The Paulson Institute