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The Rise of Shenzhen and BYD – How a Chinese Corporate Pioneer is Leading Greener and More Sustainable Urban Transportation and Development

BUSINESS / ENVIRONMENT / INNOVATION / SPOTLIGHT / March 9, 2016

By Taylor Ogan and Xiangming Chen

While the world is focussing on if the Chinese government can be a trusted and reliable leader in dealing with global climate change, a Chinese company – BYD – has been leading the industrial and technological frontier of green energy transportation and contributing to more sustainable urban development in China.  

 

China has been a dominant factor in the global response to climate change as the world’s largest emitter of CO2. China got central attention and much praise at the 2015 United Nations Climate Change Conference held in Paris after President Xi Jinping had pledged to cap its rapidly growing carbon emissions by 2030 when he met with Obama in 2014. China also set an ambitious goal of raising the share of non-fossil fuels in its energy mix from 10% to 20% by 2030.

The success of BYD is a timely case for understanding what can be done to curb massive pollution in China’s major cities.

 

The success of BYD is a timely case for understanding what can be done to curb massive pollution in China’s major cities. This pollution is producing health hazards, slowing social and economic progress, and sustaining China’s status as the largest global emitter of CO2. Is it possible for one start-up in China with a vision for a sustainable future to help solve these problems? What can we learn from its success that has a positive impact on sustainable cities? Understanding how BYD has done it, in relation to its home city of Shenzhen in southern China, can teach us two important lessons. One is the critical importance of a bold corporate vision and its persistent execution. The other is how the pioneering role of a home-grown company, nurtured by its local government, can improve its urban environment and set it up as a model for other cities.

 

The Urbanisation-Pollution Nexus

Over the past three decades, China has experienced the most rapid urban expansion in human history. According to China’s government statistics, the permanent urban residents grew from 170 million in 1978 to 730 million in 2013, with the proportion of people living in cities rising from 17.9% to 53.7%. With only 193 cities in 1978, China has over 700 cities today. Larger cities have been growing faster. From 1978 to 2010, China’s cities with 10 million, 5-10 million, 3-5 million, 1-3 million, and 0.5-1 million people increased to 6, 2 to 10, 2 to 21, 25 to 103, and 35 to 138, respectively (see Table 1 below). Most of this urban growth has occurred through migration. In 1982, only 11.54 million people in China, or about 1% of the population, left their registered hometowns to work and live elsewhere. In 2012, 236 million people, or almost one out of every five people in China, were urban residents through in-migration.

 

table1

 

The massive influx of people into cities has pushed up energy demand considerably. In meeting this demand, China has had to rely on fossil fuels, with coal accounting for about two-thirds of its energy generation. The millions of factories, large and small, manned by tens of millions of migrant workers are powered by coal. The millions of new cars driven by millions of middle-class consumers in the large cities gobble up so much gas that they keep China’s oil consumption and imports sky high.1  

The massive influx of people into cities has pushed up energy demand considerably. In meeting this demand, China has had to rely on fossil fuels, with coal accounting for about two-thirds of its energy generation.

 

The release of this amount of carbon into the atmosphere is deadly. Heavy smog has become increasingly common over cities like Beijing. The blue sky that the second author remembers from growing up in Beijing is increasingly rare. One study found that “outdoor air pollution contributes to the deaths of an estimated 1.6 million people in China every year, or about 4,400 people a day.”2 On particularly bad days in many Chinese cities, pollution levels become so high that schools are advised to close, car use is drastically limited, construction sites are forced to shut down, and even flights are cancelled. Breathing Beijing’s air for one day is equivalent to smoking 36 cigarettes, according to a new study by Berkeley Earth.3

 
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About the Authors

taylorTaylor Ogan is currently a sophomore at Trinity College, Connecticut, majoring in Urban Studies. His focus is on the implementation and investment of sustainable energy and electric vehicles, specifically in China. He did research in Shenzhen, China in the summer of 2015 supported in part by the Henry Luce Foundation, as well as in New York City, Chicago, and Los Angeles.

xiangmenXiangming Chen is the Dean and Director of the Center for Urban and Global Studies and Paul E. Raether Distinguished Professor of Global Urban Studies and Sociology at Trinity College, Connecticut, and a distinguished guest professor at Fudan University, Shanghai. He has published extensively on urbanisation and globalisation with a focus on China and Asia. He is the main author of a dozen China-related articles published in The European Financial Review since 2012.

References

1. Xiangming Chen and Fakhmiddin Fazilov, “China and Central Asia: A Significant New Energy Nexus”, The European Financial Review (April 2013): 38-43.
2. Dan Levin, “Study Links Polluted Air in China to 1.6 Million Deaths a Year”. The New York Times, 13 August, 2015.
3. Richard A. Muller and Elizabeth A. Muller. Berkeley Earth, 16 December, 2015. Web. 1 January, 2016; accessed from: http://berkeleyearth.org/air-pollution-and-cigarette-equivalence/
4. Xiangming Chen and Tomas de’Medici, “From a Fishing Village via an Instant City to a Secondary Global City: The ‘Miracle’ and Growth Pains of Shenzhen Special Economic Zone in China”. Pp. 107-126 in Rethinking Global Urbanism: Comparative Insights from Secondary Cities, edited by Xiangming Chen and Ahmed Kanna. New York: Routledge, 2012.
5. BYD. About BYD: Company Profile at http://www.byd.com/aboutus/profile.html, accessed on 30 July, 2015.
6. Michael Austin, Vice President of BYD America, said in an interview on YouTube, “We discovered in China that one bus travels about 300 km (190 miles), but the average car only drives for two hours…it turned out to be a 30:1 ratio in emissions. So one diesel bus produces 30 times more emissions than a single private car. So if you electrify a bus, you actually would offset 30 times the carbon dioxide footprint”.
7. Steve Hanley, “BYD Unveils 200 Mile Electric Bus”. Gas 2, 30 January, 2015. Web. 10 January, 2016.
8. Clean Energy Institute, “Case Study – BYD Buses in Shenzhen, China”. A Case Study, Clean Energy Institute, 2015.
9. Ibid.
10. Tesla Motors, “Tesla Gigafactory”. Tesla Gigafactory. Web. 28 December, 2015; accessed from https://www.teslamotors.com/gigafactory
11. BYD Europe, “BYD Was “All-Electrified” at 2015 Shanghai Auto Show”, 23 April, 2015. Web. 3 January, 2016; accessed from: http://www.bydeurope.com/news/news.php?action=readnews&page=2&nid=200
12. This ranking of the pollution level for 190 Chinese cities was accessed from: http://mp.weixin.qq.com/s?__biz=MjM5ODA5OTE1MQ==&mid=203578819&idx=1&sn=70833b994bea2d3926de157833d2d1d9&scene=5&srcid=1222867Y9uIK5FDbqrKHC8Xl#rd.











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