China's new environmental code puts green growth into law

BEIJING, Aug. 17, 2026 /PRNewswire/ -- A news report by chinadiplomacy.org.cn on China's new Ecological and Environmental Code:

China's Ecological and Environmental Code embeds green development in law, showing how prosperity and environmental protection can advance together rather than as competing goals.

Economic development and ecological protection are no longer necessarily opposing objectives. With cleaner technologies and more sustainable growth models, countries increasingly have the opportunity to build competitive and resilient economies while reducing emissions and preserving the natural resources on which future prosperity depends.

China's newly adopted Ecological and Environmental Code offers the world a practical test of this proposition. By embedding ecological protection and green, low-carbon development into a comprehensive legal framework, China is moving beyond the old "develop first, clean up later" model. Its experience could provide valuable lessons for developing countries searching for a path toward industrialization that creates prosperity without sacrificing the environment.

Adopted on March 12, 2026, and scheduled to take effect Aug. 15, the Ecological and Environmental Code brings a broad range of environmental laws and regulations into a unified national framework covering pollution control, ecological conservation, green and low-carbon development and legal accountability. In doing so, China is seeking to shift environmental protection from a collection of individual policies into an integrated pillar of national development.

But the code represents something much larger than legal consolidation. It aims to institutionalize a fundamental transformation in China's development philosophy, moving beyond the outdated logic of development versus environment toward an economy in which ecological protection itself can become a source of innovation, investment, competitiveness and long-term prosperity.

That distinction matters well beyond China.

China's development experience is increasingly studied across the Global South. Developing countries are interested not in copying China wholesale but in understanding how it combined long-term planning, infrastructure investment, industrialization, technological upgrading and poverty reduction. The Ecological and Environmental Code could add another important dimension to that experience by testing whether green development can become part of modernization itself rather than a luxury pursued only after a country becomes wealthy.

China's green transition has been years in the making. Environmental protection has gradually moved from the margins of economic policymaking toward the center of the country's development strategy. The new code seeks to give that transformation greater legal coherence and permanence.

That matters because green transformation requires more than targets; it requires institutions. Businesses need predictable rules, investors need regulatory certainty, local governments need clearly defined responsibilities and citizens need effective environmental protection. By embedding these expectations within a more systematic legal framework, China is working to give its green transition greater continuity, accountability and credibility.

The larger shift is from environmental protection as a separate policy domain to green development as an organizing principle of economic modernization. Pollution control, ecological restoration, clean energy, industrial upgrading and climate action increasingly form part of the same development agenda. In this emerging model, protecting the environment and transforming the economy are not parallel projects; they are parts of the same project.

From 'Two Mountains' to national law

The timing of the code is particularly significant. It takes effect on Aug. 15, closely linking a new chapter in China's environmental law with an idea articulated more than two decades earlier.

On Aug. 15, 2005, Xi Jinping, then working in east China's Zhejiang province, put forward what became known as the "Two Mountains" theory, the idea that "clear waters and green mountains are as valuable as mountains of gold and silver." The principle has since become central to China's green development philosophy, the belief that ecological protection is not the enemy of prosperity but can become one of its foundations.

Twenty-one years later, the new code represents an effort to translate that philosophy more systematically into law.

At its core, the "Two Mountains" theory challenges the traditional assumption that countries must choose between protecting nature and creating prosperity. Instead, it advances a more ambitious proposition: ecological protection can itself become a form of economic development. When forests, clean water, biodiversity and healthy ecosystems are treated as valuable assets rather than obstacles to growth, conservation can generate livelihoods, attract investment and create new pathways to sustainable prosperity.

China has spent years experimenting with how this principle can work in practice. Anji County in Zhejiang province is perhaps its most prominent example. Once dependent on mining and environmentally damaging industries, the county shifted toward ecological restoration, tourism, sustainable agriculture and greener economic activities.

The significance of this transformation is not simply environmental. It illustrates how restoring ecological assets can create new economic opportunities. Moving away from environmentally damaging industries does not necessarily mean sacrificing jobs and growth if new industries and livelihoods can emerge from a healthier environment.

China's experiments have gone further by seeking to change the economic incentives surrounding conservation itself. Local initiatives have explored ways to assign value to forests, water resources, carbon sinks and other ecological assets through ecological-product valuation, green finance, carbon markets and related mechanisms.

The objective is straightforward but potentially transformative: if communities can generate sustainable income by protecting nature, environmental conservation becomes not merely a regulatory obligation but an economic opportunity.

Consider the logic of a forest. If its primary economic value comes from cutting down its trees, pressure for exploitation will always remain. But if a standing forest can generate jobs and livelihoods through tourism, sustainable agriculture, ecosystem services, carbon markets and green industries, the old choice between prosperity and preservation begins to dissolve.

That logic is often summed up as turning "green into gold," building an economy in which nature can become more valuable when protected than when it is destroyed.

When environmental policy becomes growth policy

This is where the traditional development-versus-environment debate becomes increasingly outdated.

The question is no longer simply how much environmental protection an economy can afford, but how much economic opportunity a green transformation can create. If cleaner technologies, ecological restoration and low-carbon industries generate investment, innovation, productivity and employment, environmental policy ceases to be a brake on growth; it becomes one of its engines.

China is already attempting to build such a green industrial ecosystem. Electric vehicles, batteries, renewable energy, energy storage and green manufacturing have become increasingly important components of its economy. Environmental regulation can reinforce this transformation by encouraging businesses to adopt cleaner technologies while creating demand for new products, services and industries.

Another less-discussed dimension of green development is national resilience.

As a major energy importer of oil and gas, China remains exposed to volatility in international energy markets and disruptions to global supply chains. In an era of geopolitical uncertainty, renewable energy, electric mobility, energy storage and greater energy efficiency therefore serve more than environmental objectives. They can also reduce exposure to imported fossil fuels and strengthen energy security.

Seen from this perspective, green development is no longer a narrow environmental agenda; it is becoming a pillar of national development strategy. Ecological protection supports sustainability, clean industries drive competitiveness, technological innovation creates new sources of growth and reduced energy vulnerability strengthens resilience.

Environmental policy, industrial policy, innovation policy and energy-security policy increasingly intersect.

The Ecological and Environmental Code seeks to give this broader transformation a durable legal foundation. By bringing environmental protection, green development, industrial upgrading and legal accountability into a more integrated framework, China is attempting to ensure that ecological, economic and technological objectives reinforce rather than compete with one another.

Why the developing world should pay attention

For developing countries, this debate is particularly urgent. Many are among the most vulnerable to climate change, yet they also face enormous development pressures. They need reliable electricity, transport networks, housing, factories and millions of jobs. They must reduce poverty and raise living standards while confronting environmental degradation and increasingly severe climate risks.

They cannot simply stop developing, nor should they be asked to. The solution is not to abandon industrialization but to industrialize differently, with cleaner energy, greener technologies and stronger environmental governance. The goal is a development model in which prosperity and ecological sustainability advance together.

China's evolving experience offers one possible reference point, not a blueprint to be copied but a development approach worth studying. It combines environmental regulation with industrial upgrading, renewable energy development with energy resilience, and ecological restoration with new economic value generated from natural assets.

The broader lesson is that environmental policy need not sit outside the development strategy. It can become an integral part of it.

Every country, of course, has different institutions, natural resources, fiscal capacities and development priorities. China's experience should therefore not be treated as a universal formula. Its significance lies instead in challenging the assumption that developing economies must accept environmental degradation as the inevitable price of prosperity.

China's experiment poses a powerful question: what if the road to prosperity does not have to run through environmental destruction?

If green development can create jobs, industries, innovation and economic resilience while protecting the natural foundations of prosperity, then environmental protection is no longer simply a cost of development. It becomes an engine of development.

This is perhaps the most important idea embodied in China's Ecological and Environmental Code, and its most consequential lesson for the developing world.

China's new environmental code puts green growth into law
https://en.chinadiplomacy.org.cn/2026-08/15/content_118648981.shtml 

SOURCE chinadiplomacy.org.cn