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Green initiatives attracting investments

By Lara Farrar (China Daily)
Updated: 2009-09-10 08:32

A new blueprint for investing in China's fast-growing green technology sector is being released today, with the authors projecting a market with a potential value of $1 trillion annually.

The report examines 125 market opportunities across seven sectors, including renewable energy, green building and clean water.

The China Greentech Report, sponsored by the China Greentech Initiative, a commercial collaboration of clean technology companies, will be unveiled at the 2009 Summer Davos in Dalian.

The 2,500-page study is the result of an 18-month open source collaborative research project between 80 foreign and domestic companies involved in China's green-tech industry. It will be available for free online in both English and Chinese.

It also details market, financial, technological and regulatory challenges in the industry, outlining a framework through which stakeholders can address them.

Authors said they hope the study will provide an "actionable roadmap" for companies trying to navigate what investors say is a complex Chinese green-tech market. The investments are often complicated by intellectual property rights with technology transfers from abroad and unevenly enforced government policies.

"Our hope is that the report becomes part of a platform that enables more discussion and provides greater transparency as to what happens in China's marketplaces," said Randall Hancock, co-founder of the China Greentech Initiative.

"Business must play a key role in developing and providing green technology solutions that are affordable to help China and the rest of the world solve environmental issues," he said.

The report also aims to forge more collaborative partnerships between foreign investors and Chinese companies, said Randall.

Over the past couple of years, a growing number of investors, particularly from the United States, have been trying to tap into China's exploding clean-energy sector. Beijing's allocation of more than $220 billion of its $586 billion stimulus package to green projects has only amplified this interest.

At a conference held in Shanghai on Monday and Tuesday aimed at developing an eight-step program to move China's green-tech markets forward, US Senator Maria Cantwell, a Democrat from Washington, emphasized the important role companies play in combating climate change.

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"The collaboration is happening at a business-to-business level and that is going to give us all the confidence that we can tackle this very tough issue," Cantwell said. "There is a lot that government can do and there is a lot that government can't do."

Gary Rieschel, whose Shanghai-based venture capital firm Qiming Venture took part in compiling the study, said the report has helped his company identify attractive investment areas in the market.

"Part of the struggle has always been getting good information," Rieschel said.

"The scale of the market and how that intersects with government policy, who the main actors are on both the Chinese and multinational side - it is a great deal of work to take it down to some basic building blocks and reconstruct it," he said. "That will be one of the lasting legacies of this report."

Others say they are skeptical of how much of an impact the study will have.

"At the end of the day, what is the change that results from these studies?" said Irving Steel, a business manager with Shanghai-based sustainable consulting design firm Arc8X.