China to Increase Investment in Environmental Protection

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China is expected to invest over 1,300 billion RMB (US $156.6 billion) in environmental protection between 2006 and 2010, more than 1.5 percent of the country’s GDP over this period, Xie Zhenhua, Director of China’s State Environmental Protection Administration (SEPA), said on Tuesday. Xie made the remark during a speech at the Woodrow Wilson Center for International Scholar's China Environment Forum. He was in Washington, D.C. to attend meetings at the U.S. Environmental Protection Agency.

Statistics from China’s State Information Center show that this investment is almost double that of the previous five years, if prices are kept constant.

The investments will fund nine major areas of environmental protection, including urban sewage treatment, water treatment in major river basins, ecosystem conservation, nuclear radiation safety, and environmental management, Xie said. While the bulk of the money will come from the national coffer, China will also draw from non-governmental sources, including the private sector and foreign investors.

Just before Xie departed for his U.S. visit, SEPA secured 50 billion RMB ($6 billion) in loans from China Development Bank for three projects that top the environmental protection agenda: urban sewage treatment, solid waste treatment, and hazardous waste treatment. Bank authorities promise to double the loans once there are additional well-planned projects in the pipeline.

China will utilize policy incentives and market instruments to attract investments from other sources. “We will hold to the principle that polluters pay, while people who provide treatment benefit,” Xie said. He believes China has a huge and lucrative market in pollution treatment, and the country is opening this opportunity to all interested parties.