China faces a fundamental challenge: How to balance environment protection with economic growth? Environmental protection can yield huge social benefits in terms of health and natural resources. But there is often an accompanying price to pay - in terms of jobs as well as the costs of compliance with tighter regulations. Achieving the right balance means addressing a complex set of factors causing environmental degradation.

The efficiency of the China's industrial sector is low in terms of carbon emissions, pollution and resource intensities. Take carbon emissions for instance. China's carbon emissions per dollar of GDP are more than three times that of Japan. Why is this the case? Clearly, a major factor is the fact that there is still huge reliance on coal to meet energy needs. And the rapid urbanization is not being planned in a "green" manner. Overall, there needs to be a concerted effort to promote a new industrial base and a shift away from a fossil fuel-intensive heavy industry toward a low-carbon model. The result will otherwise be low efficiency and rising pollution.

The Chinese government recognizes these challenges and is mobilizing public and private resources. On June 30, Premier Li Keqiang said China has submitted to the United Nations a detailed set of measures and targets to achieve a low-carbon economy. For example, the government has committed itself to cutting by 2030 carbon dioxide emissions per GDP between 60 to 65 percent of their 2005 level. It has also pledged that by 2030 non-fossil sources of energy will account for 20 percent of the primary energy mix from 11.2 percent last year, and forest stock will be increased by 4.5 billion cubic meters compared with 2005 levels.