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Rosy Prospects for Environmental Protection Business
China's environmental protection industry can look forward to unprecedented development and its profits are expected to rise.

This is what experts who participated in a recent seminar on environmental protection science, technology and engineering in Tianjin believe.

Liu Hongliang, a member of the Chinese Academy of Engineering, said the environmental protection industry will become one of the powerhouses of the national economy with China's intensifying support for the environmental protection cause and effective supervision of the market.

Statistics show the annual output of the global environmental protection industry is 600 billion US dollars, far exceeding otheremerging industries such as tourism and computer software.

China's businesses involved in the manufacture of equipment andgoods for the industry, had an output valued at 95.47 billion yuan(about 11.5 billion US dollars) in 2000, or 0.77 percent of the national industrial total.

China's revenue from environmental protection in the same year was 168.99 billion yuan (about 20.36 billion US dollars), including a profit of 16.67 billion yuan (about 2.01 billion US dollars), with a profit just below 10 percent.

"That was not as high a profit as we expected, considering the environmental protection industry's bright prospects," said Wang Yangzu, head of the China Environmental Protection Industry Association.

The low profit era has existed since the 1970s and was caused by three major factors, a lack of finance, technology, advanced management expertise and large scale operations, inadequate policies and a disorganized market. These factors have restricted the development of environmental protection businesses.

Experts say positive factors such as China's entry into the World Trade Organization and Beijing's successful bid for the 2008Olympic Games have now injected vitality into the development of China's environmental protection industry.

The Beijing 2008 Olympic Games has spurred the government and of the general public to look at environmental protection and created a great market potential for environmental protection businesses.

Since China's entry into the WTO, the country is giving priority to opening up environment-related services and the marketin order to finance environmental protection. Taking this as a challenge, China is learning from the experience of developed countries, and working out policies to encourage the flow of overseas capital into the environmental protection sector, the experts say.

The "green barriers" set by different trading members of the WTO are helping Chinese exporting companies to put importance on authentification and environmental safety control, as well as in administration.

China has pumped more investments into the environmental protection industry in a bid to promote the growth of the potential market.

According to Wang Yangzu, China will undertake new environmental protection projects requiring a total investment of 700 billion yuan (about 84.34 billion US dollars) from 2002 to 2005, accounting for 1.3 percent of gross domestic product (GDP) for the same period, or accounting for 3.6 percent of the total investment for fixed assets.

This is one percent more than for the 1995-2000 period, said Wang, who announced the Chinese central government would give 65 billion yuan (about 7.83 billion US dollars) to subsidize 10 majorenvironmental protection projects.

In the meantime, the state will also work out favorable policies for the extension of subsidies and discount loans to major enterprises to carry out environmental projects and projectsto improve and demonstrate the use of technology in the field.

(Xinhua News Agency August 31, 2002)

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