Barriers to the implementation of cleaner production in Chinese SMEs: government, industry and expert stakeholders' perspectives
Introduction
Chinese industrial small- and medium-sized enterprises (SMEs) have been growing rapidly in terms of the total number and their contribution to the gross industrial output values. This is due to the booming of township and village enterprises (TVEs) since the early 1980s. According to the Provisional Regulation on Small and Medium Enterprises in China (2003), SMEs are the enterprises that have either less than 2000 employees, or 300 million RMB1 annual sales, or 400 million RMB fixed assets. SMEs generally accounted for 99.88% of the total number of manufacturing establishments in China on 2002, and they contribute significantly to Chinese social, economic and industrial development [1].
However, most SMEs are currently confronted with difficulties such as obsolete equipment and technology, untrained and inexperienced laborers, and insufficient financial resources. Their production has caused significant negative environmental impacts [2]. SMEs in the printing and dying, foundry, tannery, food processing, pulp and paper, electroplating and chemical industries are the most energy-intensive and polluting industries in China, and have impacted the surrounding environment and harmed the neighbouring residents' health [3], [4].
In order to reverse the worrisome trends of heavy energy consumption and environmental pollution, the Chinese government has had more than 150,000 small polluting enterprises closed, suspended, merged or transformed since 1996 [5]. However, these tough measures only temporarily mitigate the problem of industrial pollution caused by SMEs without removing the root cause. Since 1990s, China's environmental protection strategy has embarked on a gradual transition from end-of-pipe (EOP) pollution treatment to pollution prevention. Cleaner production (CP) has been recognized and promoted by the Chinese government because it prevents pollution at the source and may prove a more cost-effective alternative to a conventional EOP control approach [2]. On 1 January 2003, the Cleaner Production Promotion Law (CPPL) of China took effect. The new law is the highlight of a number of initiatives that the Chinese government has taken to establish CP as one of China's strategies for sustainable development. It is also unprecedented as the first national law specializing in promotion of CP in developing countries. This law became an indication of normative and legal management for CP and the milestone for a new pathway to industrialisation in China [6].
However, the CP Promotion Law is only newly adopted. The widespread adoption of CP on the ground is far from satisfactory [7]. A number of barriers exist in the introduction, development and application of CP in Chinese SMEs. Shortly after CP was first introduced in China in 1993, some prominent barriers were identified in relation to awareness, financial and managerial aspects [8], [9], [10]. With the gradual improvement of policy and institution of CP, some barriers have been removed, but many others continue to exist and some new barriers have emerged.
To effectively reduce existing barriers and to create a favourable environment for CP adoption in SMEs, the research was designed to quantitatively identify, rank and prioritize the barriers. There are a number of features that differentiate this research from the previous studies of CP barriers. First, the research was designed to prioritize the barriers in a quantitative way based on a questionnaire survey while previous ones were primarily based on qualitative case studies. Previous studies of CP barriers tended to take stock of a range of barriers without prioritizing and ranking them.
Secondly, the research was focused on SMEs while the previous ones targeted all scales of industry. According to Shi [11], SMEs face special challenges in adopting CP because they are mostly confronted with punitive measures rather than supportive and inducing policies.
Thirdly, this research focused upon comparing and contrasting the perspectives of government, industry and experts on the same issue – CP barriers. Any substantial difference in stakeholders' perspectives may shed some new light on the underlying reasons for ineffective CP policies and on the possible improvements in future policy improvements.
Fourthly, this research utilized the analytic hierarchy process (AHP) methodology for prioritizing the barriers to CP implementation for the first time. AHP is a quantitative and normative analytic method, which can significantly reduce inherent subjectivity for both the interviewees who participate in the survey and the researchers who conduct the research.
The remainder of this paper is structured as follows. Section 2 examines the barriers to implementation of CP in Chinese SMEs. Section 3 explains the AHP methodology for prioritizing CP barriers. Section 4 presents the quantitative results from AHP analysis. Section 5 concludes the paper with the top three barriers for CP implementation in Chinese SMEs and also sheds some new light on priorities for future policy development to promote CP in SMEs.
Section snippets
Barriers to the implementation of CP in Chinese SMEs
Successful implementation of CP needs not only internal cooperation among managerial, technical, and operating staffs of industrial enterprises, but also external supports and incentives of finance, policy and the marketplace [11]. It is essential to reduce the major internal and external barriers for enterprises which prevent them from effectively adopting CP. Properly identifying critical barriers to implementation of CP in Chinese SMEs is prerequisite to formulating appropriate public
Methodology for prioritizing the CP barriers – analytic hierarchy process
The AHP devised by Saaty [20], [21], [22] is a powerful and flexible decisionmaking tool to help people in setting priorities and making the best decision when both qualitative and quantitative aspects of a decision need to be considered. By reducing complex decisions to a series of one-on-one comparisons, and then synthesizing the results, AHP not only helps decisionmakers arrive at the best decision, but also provides a clear rationale why it is the best. It can be used to predict likely
Results and analysis
The research team made great effort to increase the response rate of the questionnaire survey by improving the understandability of the questionnaire, conducting relevant methodology training, and maintaining follow-up discussions. As a result, altogether 119 finished questionnaires were returned. However, the problem with the questionnaire responses in terms of poor consistency prevailed. In the end, only 65 questionnaires satisfying the consistency test were used to analyze the weights of CP
Focusing on the prioritized barriers
By integrating the perspectives of government, enterprise and expert stakeholders, the study suggests that the dominant barriers hindering CP implementation come from the policy and finance arenas, which are mostly external to SMEs. More specifically, the absence of economic incentive policies (AEI), lax environmental enforcement (LEE), high initial capital cost (HIC), poor financial performance of CP (PFP) and difficulty in accessing finance/capital (DAC) are the five most prominent
Acknowledgements
This research was partly funded by the Swedish International Development Cooperation Agency (Sida) through the project entitled “Small and Medium Scale Industries in Asia: Energy, Environment and Climate Interrelations” of the Asian Regional Research Programme in Energy, Environment and Climate – Phase III (ARRPEEC-III) coordinated by the Asian Institute of Technology (AIT). The authors would like to thank S. Kumar, C. Visvanathan and C. Ma for their advice on the research methodology, and
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