The Influences of China’s circular economy on Swedishcompanies

As the human ecological footprint is increasing and human consumption is disrupting thenatural ecosystem, the need for change towards sustainable development has never been more pressing. Due to globalisation, the impacts of consumption are not limited to a country’s border but rather an issue that influences the whole world. Historically have companies moved much of their production to countries with more financially beneficial conditions where China has been one of the main destinations. This has led to China becoming a major global player, where much of the world’s unsustainable manufacturing is happening. The companies that are contributing to this unsustainable development are now demanded by their stakeholders to take more responsibility for their impacts. A way to do this is to leave the traditional linear economy and work towards a circular economy instead. Circular economy has developed differently, depending on geographic location. It can be seen that within Europe, the concept has developed through a bottom-up approach where the market has been the main impeller for change. In China, circular economy has developed from a governmental direction, a top-down approach, where policies and regulations are the main drivers. Within this context, there are Swedish companies active in both the Chinese and European circular economy context and this could influence their work towards circular economy. Research on circular economy in China has mainly focused on macro and meso level, leaving the micro level less explored. Therefore, this study is conducted through a micro perspective and with the aim to gain a better understanding of how China’s approach towards circular economy is influencing Swedish companies in China and Hong Kong. This aim is met by conducting a qualitative, multiple case study on Swedish companies that are active in China and Hong Kong. The data is collected through semi-structured interviews and is analysed with the guidance of the theoretical framework based on perational drivers and barriers for companies to work with sustainability and circular economy. The study’s key findings are that sustainability and circular economy is complex and that the external factors; government, customer demand and public awareness seem to be more influential than the internal factors. The government is seen to be both a driver and a barrier, which can indicate that the government has an important role in the context of circular economy in China. The government has, through regulations, increased access to information and improved industries environmental performance. However, the government is not viewing circular economy through a holistic perspective which is seen to become a barrier for the companies’ sustainability work. The customer demand & public awareness are also external factors, identified by all companies to be influencing both their work but also the internal drivers and barriers to work with circular economy. The customer demand is mainly coming from the European market, whereas it is the low public awareness in China that still poses as a barrier for the companies. This further emphasis that these external factors importance when analysing the influences of Chinas circular economy approach on these companies. Furthermore, the study confirms the view that the concept circular economy is adaptive and changes depending on what context it is applied to. This is because it is seen that the companies are influenced by both the European and the Chinese context within their business practices and that the work towards circular economy differs between each company. Based on this, it can be seen that circular economy is a complex issue influenced by its context and in order for it to be further implemented, complex solutions are needed.