Changes in China for Foreign Investment: Energy Consumption and Pollution

Filed in archive Law on December 3, 2007

China wants green investors. Not "green" as is new, inexperienced investor. China is looking for investors whose ideas don't consume much energy and don't create much pollution.



The Royal Society of Chemistry has an informative piece online at the moment that looks at changes in the Catalogue for the Guidance of Foreign Invested Enterprises. They give more technical insights than I've seen elsewhere. They say, for example:

For the petrochemical industries, the most notable change is that foreign investment in high energy- and raw material consuming products - such as ethylene tetrafluoroethylene, aluminium fluoride and hydrofluoric acid production - will now be restricted.

Meanwhile, engineering plastics, for example, and environmentally friendly fertilizers or pesticides will join a list of 'encouraged' sectors that will enjoy faster approval and, in many cases, preferential tax treatment. Coal chemical manufacturing too is on the list of approved industries.

A huge number of policy directions were changed with the release of the new Catalogue for the Guidance. The China Law Blog sums it up well: "The message is that there will be no more dumping of outmoded or wasteful production in China. Whether China can successfully implement this policy at the local level remains an open question."