Environmental technologies to China
(Last updated: 12 Sep 2013)
Trends and opportunities
Clean Energy and Environment - China
Be part of a unique initiative to encourage exports and two-way investment between Australia and China in clean energy, green-building, water and the environment.
Austrade China’s Clean Energy and Environment (CEE) team has developed a co-ordinated marketing platform to introduce capable Australian firms into eco-projects, opportunities and contacts in China.
Austrade has developed a Chinese language directory to showcase the capabilities of Australian water, environmental, clean energy and green-building companies. The directory has been marketed to Chinese organisations pursuing major projects in relevant industry sectors, such as urban and rural local authorities, state-owned conglomerates, energy generators and property managers.
Companies in this initiative are also able to connect via Austrade to CEE advisors working on-the-ground in China. These CEE advisors provide services ranging from legal, advisory, funding and business matching.
Apply to join our CEE China Directory
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 setting. It is estimated that environmental damage costs up to eight per cent of China's gross domestic product each year.
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 standards.
China is experiencing the fastest growth in demand for environmental products and services in the world.
China’s environmental protection priorities (2011-2015)
China aims to shift its investment focus from infrastructure to encourage the development of environment-friendly projects. The 'National 12th Five-year Plan on Environmental Protection' released by the State Council on 15 December 2011, complimented China’s achievement in pollution control over the past five years and set new goals for the future.
(Sources: www.china-briefing.com | news.xinhuanet.com)
It is estimated that total output of environmental protection and energy conservation industry will account for over seven per cent of GDP. The plan states there will be RMB3.4 trillion of investment demand in the China environment protection area from 2011 to 2015. RMB1.5 trillion of investment will be required for eight major prioritised projects:
- Major pollutants reduction, such as sewage treatment, sludge treatment, desulfurisation and de-nitrification
- Living environment improvement, such as water/air/soil quality improvement
- Environmental protection in rural areas, such as non-point source pollution control from agriculture
- Ecological preservation, such nature reserve development and biodiversity conservation
- Environment risk prevention, such as prevention and control of heavy metal/hazardous chemicals pollution and persistent organic pollutants
- Nuclear safety, such as nuclear safety systems/technology development and radiation monitoring
- Environmental infrastructure, such as waste treatment facilities development and projects on water supply security
- Environmental monitoring, such as environmental monitoring capability development and talent training
China will also increase science and technology research investment in the area of environment and resources protection. 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
In early August 2013, the Chinese State Council issued opinions on expediting the development of energy conservation and environmental protection industry. According to the State Council, the value of energy-saving industry’s output will reach RMB4.5 trillion by 2015 with an average annual growth of 15 per cent. The energy conservation and environmental protection industry will become a new pillar industry of China’s economic development.
Opportunities
Technical cooperation and joint ventures are of most interest to local environmental companies. Increasing investment in environmental protection is providing a range of opportunities for Australian companies:
Environmental protection
- Soil and water remediation (including heavy metal pollutant emission)
- Environmental monitoring instruments and automation control systems
Waste management
- Special waste, eg. electronic, magnetic, lead battery. management, recycling and disposal
Water
- Water monitoring and testing
- Water related training, education and consultancy
- Waste water/water treatment, including water environment protection
- Water efficiency/saving, including water saving for buildings
Air and noise
- Nitrogen oxide and ammonia nitrogen reduction and removal technologies
- Desulphurisation technologies
- Air pollution control equipment
- Noise control materials and equipment
Energy efficiency
- Green-building energy efficiency solutions
- Industrial energy conservation technologies
Tariffs, regulations and customs
Duties are imposed on the majority of imports to China. 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 in manufacturing for re-export. Low tariff rates are applied to certain products in sectors where the government encourages the development, 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.
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.
Having a local presence in the market, either via establishment of an office, working with a partner in China, or regular visits from Australia is fundamental to working effectively in China. Approaching the market with a long term strategy is also important.
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.
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
China Greentech Report 2011 - www.china-greentech.com
Government, business and trade resources for China
Ministry of Environmental Protection – http://english.sepa.gov.cn
Contact details
The Australian Trade Commission – Austrade – is the Australian Government’s trade, investment and education promotion agency.
Through a global network of offices, Austrade assists Australian companies to grow their international business, attracts productive foreign direct investment into Australia and promotes 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.