Finding “Green” Profits in China
China Dialogue looks at the prospects for China’s environmental sector amid economic gloom and doom:
So far, China’s green sector has withstood the current financial crisis and continues to enjoy a steady stream of capital inflow. This resilience is in part thanks to the central government’s most recent 4 trillion yuan (US$586 billion) stimulus package, which includes 350 billion yuan (US$51 billion) earmarked for environmental projects such as waste-water treatment plants and renewable energy facilities.
The benefits of this government-backed spending spree are quickly becoming apparent, with a surge in government-solicited bids for environmental projects across the country. These developments, of course, have led to new investor optimism. CleanTech Group, a private consultancy, reported that investors at this month’s conference in Shanghai see no slowdown in the Chinese clean technology industry. Similarly, the National Development Reform Commission recently reported that for the fourth quarter alone, investments in the country’s rural water resources and energy facilities, such as biogas, topped over 22 billion yuan (US$3 billion).
While this is good news for China’s green industries and the country’s quest to improve its environmental performance, investors seeking to make a quick profit from this growth must beware. China’s green sector, while it has improved significantly, remains an extremely competitive industry that is fraught with obstacles, allowing only the strongest companies to survive.