SHANGHAI Nov 15 China will open its energy
conservation and environment protection industries to foreign
and private investment, state media reported Friday, quoting
comments by premier Li Keqiang made at a meeting in Beijing.
Li's remarks may signal a change in China's approach to the
clean energy sector, which has used government subsidies to
create national champions and been criticised as protectionist
He told foreign members of the China Council for
International Cooperation on Environment and Development on
Thursday that China is willing to work with the international
community to strengthen technology and other forms of
cooperation to improve the environment.
"We encourage private capital to enter the field," the
official China Daily quoted Li as saying.
At present foreign companies can invest in equipment
manufacturing, but can only have limited stakes in clean energy
projects like wind farms.
The comments come as central and provincial governments
remain stymied in their attempts to get runaway air and water
pollution under control, with air quality levels in major cities
often far exceeding recommended healthy limits.
At the same time the country's rising energy costs, which
are aggravated by hastily built energy-inefficient buildings
thrown up during the country's real estate investment spree, are
putting its wider economic competitiveness at risk.
The shale gas revolution in the United States has made
average U.S. energy prices far cheaper than in China and
economists say this development, in tandem with rising costs for
labour and industrial land, means China risks losing its price
advantage over U.S. manufacturers.
The government's strategy of using subsidies to create
national champions in wind and solar energy was partly
successful in that it spawned some of the world's largest
manufacturers of solar panels and wind turbines. But it also
created an investment glut as local governments rushed to jump
on the investment bandwagon.
Many solar power and wind farms remain disconnected from the
main power grid and the country still remains overwhelmingly
dependent on domestic coal and imported fossil fuels to drive
The strategy has also caused significant tensions with
trading partners who have complained that Chinese clean energy
companies were dumping product in their markets, prompting some
to apply tariffs to Chinese companies.
In his speech Li signalled he wanted a less contentious
"We also hope China's energy conservation and environmental
protection products will enter the overseas market, and we will
open the industry to the international market."
(Reporting by Pete Sweeney and Fayen Wong; Editing by Edwina