China needs to make greater efforts in implementing its environmentally-friendly loan policy, or "green credit policy", to tackle pollution, the country's environmental watchdog said on Wednesday.
The green credit policy has "helped curb pollution and energy wasting to certain extent, but has not yet achieved its full purpose so far", said Pan Yue, State Environmental Protection Administration (SEPA) vice director, at a press conference.
The policy was launched last July instructing banks to stop making loans to high-energy consuming and polluting industries.
According to the policy, not only companies causing heavy pollution and wasting energy are disqualified from getting loans, companies that already have loans, but are later discovered to have violated environmental protection regulations will also have their loans called in.
Pan said among the 38 companies blacklisted by SEPA for high-energy consumption and pollution since last July, 12 have been banned from obtaining loans.
In the eastern Jiangsu Province alone, more than one billion yuan (US$137 million) in loans have been called in from companies who failed to pass environmental assessment or to implement China's environmental protection regulations, he said.
He added the policy had achieved far less than hoped.
"Many of the high-energy consuming and polluting industries are at the same time the most lucrative industries in some areas, and some local governments refuse to order to cut off loans.
"Moreover, a number of these companies are turning from banks to social groups for financing, which is not within the jurisdiction of our policy."
Pan said the government will continue to mount efforts in implementing the green loan policy by setting up economic incentives for those environmentally-friendly companies, and improving interaction between banks in the loan business.
The government would also draft more environmentally-friendly policies concerning taxes and insurance to curb environmental pollution, he said.
(Xinhua News Agency February 14, 2008)