Analysis of the Emerging China Green Era and Its Influence on Small and Medium-Sized Enterprises Development: Review and Perspectives

Abstract

Small and Medium-sized Enterprises (SMEs) play a vital role in China’s economy as generators of employment, revenue and innovation. With the unprecedented economic development of China, the increase of small and medium-sized enterprises (SMEs) number has resulted in a massive resources and energy consumption that produces significant generation of waste by-products. The purpose of this study is to demonstrate that China is facing an emerging green era. The raise of Chinese environmentalism is strongly correlated with the economic development of middle class, which involves not only environmental activists, but also social stakeholders and the media. Responding to the country’s pollution and the increasing public pressure, the government has started to enforce its environmental laws with the 12th Five-Year Program. New environmental regulations and standards are issued every day, and the number of environmental inspection is increasing to insure firms’ compliance. The study also reveals that government legislation and financial support are mandatory to support improvement of SMEs environmental performances. Similarly, stakeholders have started to play an increasing role in firms’ adoption of greener strategies and practices into their management systems. Customers demand for green products, non-governmental organizations campaigns and pollution scandal revealed by the media are starting to pressure SMEs to be greener. However, Chinese SMEs are still facing numerous challenges that limit their efforts in implementing environmental management system: difficulties to comply with the changing government legislation, inequity in allocation of government subsidies, lack of managers engagement to reduce firms environmental impact, lack of technological absorptive capacity, lack of financial resources, lack of knowledge regarding environmental management and channel to connect with universities or others institutions.