Eco-industrial Park Initiative in China: A Case Study of By-products Exchange in Suzhou and Baotou State Model Eco-industrial Parks

Abstract

This paper aims to clarify how eco-industrial parks in China have tried to overcome impediments that deter firms from using by-products of other firms. For this purpose, we refer to five barriers shown in Heeres et al. (2004) and examine the case of the Kalundborg “eco-industrial park” from these viewpoints to illustrate the key impediments to be overcome. Then we take Suzhou and Baotou state model eco-industrial parks in China to examine how to overcome the impediments. We find that social networks and trust have not built up between the firms located in Suzhou Industrial Park. Exchange of by-products is supported by the park authority, but actual progress in this park is mostly dependent on foreign private-sector firms that have already established by-product exchange network in their home countries, or that have made intensive efforts to expand their network beyond the eco-industrial park. In Baotou there exist networks between the government and state firms, but central planning and implementation makes it difficult for firms to impose a quality requirement on business customers, which has further weakened their competitiveness in the market, There are also a few firms establishing joint ventures that utilize products of existing firms as raw materials. These findings imply the importance of government role in establishing an enabling environment, and of the existence of firms with sufficient technological and marketing capacity to create a by-product exchange network.