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Environmental technologies to China

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(Last updated: 22 Mar 2011)

Trends and opportunities

Wanwu Initiative

Be part of a unique initiative to encourage exports and two-way investment between Australia and China in clean energy, green-building and environment.

The Wanwu Initiative has been developed by Austrade to provide a co-ordinated marketing platform to introduce capable Australian firms into Chinese eco-projects and funding opportunities.

Marketing of the initiative will benefit from a unique Chinese cultural branding, with the Taoist term Wanwu (万物 – myriad things or universe) used in the title to represent the traditional Chinese theme of the unity of man and nature and the importance of conservation.

Austrade has developed a Chinese language directory to showcase the capabilities of Australian environmental, clean energy and green-building companies. The directory has been marketed to Chinese organisations pursuing major projects in relevant industry sectors, organisations such as urban and rural local authorities, state-owned conglomerates, energy generators and property managers. The directory has also been disseminated through selected trade shows (including the 2010 Shanghai World Expo).

Companies in this initiative may also have the opportunity to be considered for investment funding under a proposal to establish and facilitate an independent international advisory panel of China-focused investment groups.

For further information, please visit Wanwu Initiative.

The market

As China has progressed along the economic reform path, its environment has suffered degradation from rapid urbanisation and industrial development. Pollution and resource misuse have resulted in environmental damage in both the rural and urban settings.

China's environmental protection industry has developed in response to growing environmental degradation over the past two decades. The industry produces the majority of its own goods and services for pollution control and environmental protection though in some areas, the technology levels are low and below international standard.

China is experiencing the fastest growth in demand for environmental products and services in the world. It is estimated that environmental damage costs up to eight per cent of China's gross domestic product each year.

China’s environmental protection priorities (2011-2015)

Acceding to the national work conference on environmental protection held recently, the 12th Five-Year Plan (2011-2015) will include broader environmental goals than ever before.

Nitrogen oxide and ammonia nitrogen will be included in the country's mandatory pollution control program between 2011 and 2015. The former is produced by cars, while the latter, a water pollutant. The current program only manages emissions of sulfur dioxide and chemical oxygen demand.

There will be an establishment of a sound prevention mechanism to tackle the increased outbreaks of heavy-metal pollution accidents. By 2015, the country will see an optimised industry structure for the heavy-metal sector, an emergency management system and an evaluation system on pollution and health risk. It's reported that about 75 billion yuan will be used in the next five years. (Source: Beijing Review, Market Watch No. 9, 2011)

In R&D, China will increase science and technology research investment in the area of environment and resources protection over the next five years. Five important focal areas for these increased efforts are:

  • Advanced environment monitoring
  • Technology for pollution emergencies
  • Regional clean air key technology
  • Contaminated soil/site remediation
  • Risk control technology for chemicals

Opportunities

China is primarily interested in importing technologies rather than equipment. It costs less to import technologies to upgrade its domestic equipment manufacturing.

Technical cooperation and joint ventures are therefore of most interest to local environmental companies. Increasing investment in environmental protection and China's World Trade Organization accession, are providing a range of opportunities for Australian companies:

  • Advanced sewerage treatment processes and biotechnology treatment technologies
  • Nitrogen oxide and ammonia nitrogen reduction and removal technologies
  • Heavy metal reduction and treatment technologies
  • Special waste (eg. electronic, magnetic, etc) management, recycling and disposal
  • Remediation: soil and water (include heavy metals recycling)
  • Domestic and industrial waste recycling and industrial waste stabilisation
  • Desulphurisation technologies
  • Noise control materials and equipment
  • Environmental emergency response systems
  • Consulting services (eg. water resource management planning, risk assessment, green and energy-saving design, etc)
  • Meters and instruments for environmental monitoring and automation control systems
  • Radioactive and electromagnetic wave pollution control
  • Carbon capture and treatment
  • Investment

Other sectors offering potential opportunities for Australian suppliers include:

  • Clean production processes
  • Energy-saving and efficient technologies in industry and public buildings
  • Renewable energy – IP transfer, management and maintenance
  • Industrial effluent treatment
  • Air pollution control equipment
  • Monitoring systems
  • Waste recovery, reuse and recycling
  • Green products
  • Urban environmental protection planning
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Tariffs, regulations and customs

Duties are imposed on the majority of imports to China. The accession of China to the World Trade Organization has meant that at present, tariffs are constantly under review. Tariff rates vary according to the type of material, the components and the intended use of the product.

Value added tax of 17 per cent is applied to all imports, except those specifically used for manufacturing for re-export. Low tariff rates are applied to certain products in sectors the government is trying to encourage (eg. hi-tech and energy savings products).

Potential exporters are advised to make direct contact with Austrade in order to obtain the most up-to-date information on the relevant sector tariffs and regulations.

Industry standards

The Standardization Administration of China and National Accreditation Centre for Environmental Conformity Assessment issue and monitor the relevant standards in China.

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Marketing your products and services

Market entry

There are a range of options for entering the China environment sector:

  • Establishing long-term relationships with local design institutes who can recommend your products to end users.
  • Approaching customers and selling products directly.
  • Appointing distributors or agents if you are looking at a long-term strategy.
  • Linking up with local or international companies with an established presence in the market to co-bid for projects.
  • Attending bidding directly for consulting service projects or projects with services to be procured directly by international funding organisations such as the World Bank and the Asian Development Bank.

Prepare yourself for the market by undertaking a range of market research, business development and promotional activities. Commission a market assessment by local experts for your products and services and visit the market regularly to build your business. The promotional aspects of your marketing strategy will be critical to success:

  • Develop a Chinese language product introduction or company profile.
  • Organise commercial and technical seminars for potential customers, architects and local authorities.
  • Participate in industry-specific tradeshows.
  • Provide promotional, technical and service support to distributors and customers.

Online trading is not commonly used in the environmental protection industry in China. Environmental protection projects and product procurements are published on websites of central and local environmental government authorities and industrial associations.

Distribution channels

Distribution channels vary depending on products and services. Products are commonly imported into China and distributed through local agents or distributors. The number of companies registered to import and export products is controlled in China, however, end users, local agents or distributors who don't have an import licence can import through a trading company with an import licence.

As China is a large country with varying levels of economic development across its regions, it is not recommended that you limit yourself to a single distributor. Multiple distributors and agents with geographically exclusive areas may be more effective.

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Links and industry contacts

Environmental–related resources

China Association of Environmental Protection Industry – www.cepi.com.cn/
China Environment – www.chinaenvironment.com (Chinese)
China Environmental Industry Network – www.cein.net
Cleaner Production in China – www.chinacp.com
Institute of Environment & Development – www.ied.org.cn

Government, business and trade resources for China

Ministry of Environmental Protection – http://english.sepa.gov.cn

Media

China Online – www.chinaonline.com

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Contact details

The Australian Trade Commission – Austrade – is the Australian Government’s trade and investment development agency.

Through Austrade’s network of offices in over 50 countries, we assist Australian companies to succeed in international business, attract productive foreign direct investment into Australia and promote Australia's education sector internationally.

For more information on how Austrade can assist you, contact us on:

Australia ph: 13 28 78 | Email: info@austrade.gov.au

A list of Austrade offices (in alphabetical order of country) is also available.

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Austrade China’s Clean Technology Newsletter – Wanwu

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