Rapid urbanization has helped China transition from the “world’s factory” into an innovation powerhouse, driven by the world’s largest middle-class population. China’s cities now produce 82 percent of the country’s economic output and its population spends almost two and a half times more than it did a decade ago.
Alas, as incomes have grown, so too have waistlines. Diets high in protein and fat have taken hold in China, leading to a 10 percent urban-area obesity rate projected to increase to 25 percent by 2030 if left unchecked. Obesity is already costing the country more than $93 billion annually, or 1.1 percent of GDP.
The average Chinese person now eats 63 kilograms of meat a year, six times the meat-eating rate in 1978. This has made China the largest consumer of meat in the world. The meat-eating rate is not only taking a toll on people’s health, but on the environment, too. Direct manure discharge from China’s rapidly growing animal husbandry activities are polluting the country’s rivers and about 34 percent of food produced on China’s farms—enough to feed 500 million people—is never even eaten.
The case for the circular economy
Within the next decade, China’s ability to supply food for the growing and shifting appetites of its urban population will be tested. The government has signaled its intentions to increase productivity in its $1.7 trillion agricultural sector and reduce food losses to maintain a high degree of food security. Fortunately, decades’ worth of circular economy development can help. Since the 1990s, the circular economy concept—which aims to eliminate waste across sectors while creating economic, societal, and environmental benefits—has become an integral part of China’s national economic strategy and been incorporated in the country’s last three Five Year Plans. In that time, circular economy concepts have been deployed in over 2,300 pilot and demonstration projects focused on cleaner food production in China.
In a recent report (PDF), the Ellen MacArthur Foundation, with analytical support from McKinsey, mapped a vision for the future for China’s circular cities, including potential for advancement in living space, mobility, food, and consumer goods. The report found that in tackling the root causes of environmental and societal externalities in China’s food system, the public and private sector could use circular economy practices to:
- Regenerate soil with urban food waste and wastewater. An exemplary kitchen waste treatment project in Suzhou, a city of 10 million, collects household and restaurant food waste and reprocesses it to generate biogas and organic fertilizer. This could be replicated in other cities across China.
- Optimize food storage, transport, and processing. In China, the lack of cold chains—the uninterrupted series of temperature-controlled production, storage, and distribution activities for food—leads to 12 percent food loss for meat, compared to 1 to 2 percent food loss in developed countries in the EU and U.S. China could invest further in upstream and downstream cold chain infrastructure to stall and reverse additional food loss.
- Reinforce food consumption patterns beneficial to health and the environment. China’s pervasive “banquet culture”, which encourages lavish dining, is responsible for 30 to 40 percent of total food waste. Such habits, while deeply engrained, can be modified. An encouraging start was made by the “finish your plate” campaign launched in 2013, which aimed to address the trend of Chinese diners leaving 11 to 17 percent of their meals uneaten. New restaurant concepts could do away with large and inflexible portion sizes by promoting quality over quantity, and encouraging diners to take home leftover food.
Agriculture has served as the main driver of growth for the Chinese economy from the days of its first dynasty 4,000 years ago until the mid-nineteenth century. Now that the service and higher-value manufacturing industries have emerged, agriculture should be viewed as fundamental not only to economic growth but also to the well-being of its citizens and environment. Creating a regenerative urban food system in China could create a benefit of $64 billion by 2030 compared to the current development path. Capturing these opportunities while delivering a healthier future for China’s engine of growth—the urban middle class—will be worth it.