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Environmentalist Zhang has failed repeatedly in the past five years to build a chain of sewage treatment plants in China, because many local governors wanted quick-profit projects and many companies would rather be fined than invest in a sewage treatment plant.

 

"It's weird and hard to believe that many companies simply don't worry about pollution at all. I think the key reason is the absence of a genuine environmental protection legal system," said Zhang, who returned to China after studying in Canada.

 

Although the environmental protection industry in China is expected to maintain a 15-17 percent annual growth rate in the 2006-2010 period, according to estimates from the State Environmental Protection Administration (SEPA), legal loopholes and a lack of adequate systems and mechanisms are handicapping the emergent industry.

 

An array of unsuitable economic policies is one of the problems, said SEPA ex-deputy director Wang Yangzu.

 

Many power plants prefer to pay pollution fines rather than install desulphurizing equipment because desulphurizing equipment is expensive to build and operate, Wang said.

 

"The lack of coercive environmental protection regulations and protectionism from some local governments or departments are blocking environmentally-friendly products from gaining access to the Chinese market," he added.

 

The key reason why most sewage treatment plants fail to work and are left to bask in the sunshine is that industrial policies and the legal system lag behind market realities," said Mao Rubai, chairman of the Environment and Resources Protection Committee of the National People's Congress, China's top legislature.

 

The environmental protection industry in China has expanded significantly since the 1970s. It now offers the manufacture of environmentally-friendly products, the comprehensive utilization of resources, the supply of environmental protection services and the construction of ecology maintenance projects.

 

By the end of 2004, the industry had generated 457.21 billion yuan (US$57 billion) in revenue and 39.39 billion yuan (US$5 billion) in profits in China, according to the white paper titled "Environmental Protection in China (1996-2005)"issued by the Information Office of China's State Council in June.

 

A lack of product standards and technical specifications is also impeding the industry, said Meng Wei, president of the Chinese Research Academy of Environmental Sciences.

 

Classified A for its environmental protection technology by the SEPA, the Beijing Jing Puyuan Biotechnology Limited Company has to sell its organic fertilizer as chemical fertilizer because there is no strict definition of organic fertilizer in China.

 

"What we produce is non-polluting fertilizer, but we can't receive preferential treatment from the government unless we claim that it is chemical fertilizer which, as everybody knows, is noxious," said Wang Yongli, assistant to the general manager of Jing Puyuan.

 

The SEPA estimates that investment in environmental protection in China during the 2006-2010 period will reach 1.3 trillion yuan (US$162.5 billion), almost double the 700 billion yuan (US$75 billion) of the preceding five years.

 

The average annual investment of 260 billion yuan (US$32.5 billion) is more than 1 percent of China's annual GDP. The industry's revenue in 2010 will range between 800 and 1,000 billion yuan (US$100-125 billion), according to the SEPA.

 

A set of improved laws, policies, and systems is direly needed to ensure intelligent use of the funds and sustained development of the environmental protection industry, said Dong Jinshi, vice secretary general of the Beijing Research Academy of Environmental Sciences.

 

"The establishment of a public finance system, for instance, will guarantee the influx of government investment and also attract non-governmental capital to the industry," he said.

 

The merit system must be improved to make local government heads and relevant departments take the responsibility for harmonizing economic development and environmental protection, Mao suggested.

 

Mechanisms required include an environment-related litigant and supervisory system to which the public has easy access, a statistical environmental monitoring system and a system of product standards and technical specifications, experts say.

 

(Xinhua News Agency August 24, 2006)