Environment and water management to China
After several decades of rapid economic growth and urbanisation, China
faces a range of environmental challenges around the remediation and
ongoing management of water and soil pollution, as well as challenges
maintaining acceptable air quality.
Statistics from the Chinese Government highlight the scale of the problem.
With 6 per cent of the world’s fresh water and 19 per cent of the world’s
population, China faces a situation whereby 60 per cent of groundwater is
severely contaminated and unsuitable for both agricultural and human use (Source: Chinese Ministry of Land and Resources, 2015).
According to the Ministry of Environmental Protection and the Ministry of
Land and Resources (2014), 19 per cent of arable land is contaminated by
As China’s per capita income continues to rise, the demand for better
environmental outcomes and a more sustainable approach to economic
development has led the Chinese Government to adopt a number of important
China’s 13th 5 Year Plan, a high-level blue print for China’s
development from 2016 to 2020, emphasised environmental issues with
dedicated chapters on the conservation of resources, improving China’s
ecological environment and strengthening remediation efforts.
In addition, China’s State Council has released three action plans aimed at
tackling water, soil and air pollution:
The action plans lay out a series of ambitious pollution reduction targets,
encourages the use of market mechanisms and new technologies and promises
greater supervision and enforcement of regulations.
A revision of the Environmental Law came into force on 1 January 2015. This
revision makes it one of the strictest environmental laws in Chinese
history because it expands the scope of liability and increases the
severity of punishment for enterprises that pollute.
These coordinated actions on air, water and land pollution reflect the
Chinese Government’s commitment to improve its seriously damaged
environment, and are reflected in national, provincial and local government
budgets for the implementation of environmental remediation measures and
Action Plan for Water
The Water Action Plan covers 7 key river basins, 36 major cities, more
than 4,000 underground water monitoring points and 9 river estuaries.
Through a joint central and provincial government initiative, the Ministry
of Environmental Protection (MEP) has established a water project database.
In August 2016, the MEP and the Ministry of Finance (MOF) announced that
over 4,800 projects with an estimated investment of RMB430 billion (A$86
billion) have been listed in the database and are eligible for central
government funding. The MOF has recently allocated RMB13 billion (A$2.6
billion) from the central budget to support projects from this central
To lessen the reliance on government funding sources, the Chinese
government and research institutions are investigating alternate project
funding models, such as public-private partnerships and green bonds, to
further open up the environmental industry to sources of private capital.
Examples of water-related projects underway around China include river
basin pollution prevention (82 cities), lake and river pollution prevention
and remediation (49 cities), and groundwater pollution prevention and
remediation (19 cities).
China is experiencing rapid growth in demand for environmental products and
services. While the bulk of this demand is met by China’s domestic
industry, there are specific areas where technology levels are low and
below international standards.
Sub-sectors identified with Australian comparative advantage include:
- Remediation technologies for polluted lakes, rivers and other water
- industrial wastewater treatment solutions
- soil remediation
- zero liquid discharge technologies
- environmental testing and monitoring technologies
- river basin management
- integrated water planning
Chinese Government and industry have displayed interest in collaborating
with Australian institutions in scientific research and technical transfers
to enhance Chinese industry capacity.
With one of the fastest growth rates for any sector in China, ever greater
numbers of domestic and international entrants are seeking opportunities in
environmental protection and remediation.
Some progress has been made towards a market-led approach, however
government still plays a key role in most projects. Major players include
state-owned enterprises (SOEs), private companies, research institutes and
Key challenges for Australian companies include:
competition from local and international companies
- sometimes opaque procurement processes
- diverse markets and sub-sectors across China
- intellectual property protection (see IP Australia’s
IP Protection in China
for more information)
- ongoing relationship management with clients and stakeholders in the
- China’s business environment.
There are several common approaches for Australian companies seeking to
enter the Chinese water market, including:
- appointing in-market distributors or agents
setting up wholly-owned foreign entity or representative office in China
and engaging local staff
- co-bid for projects in China with local or international companies with
an existing market presence
- participate in tenders from international organisations such as the World
Australian water companies interested in opportunities in China should
consider the following strategies to market entry and ongoing opportunity
- Develop Chinese language marketing materials that clearly demonstrate the
environmental and financial benefits of the technology or service.
- Consider technical seminars and trade shows as avenues to build
connections with key decision makers, understand emerging market trends and
communicate complex value propositions.
- Understand the project pipeline relevant to your industry, as early
engagement with a project proponent is often important.
- Provide ongoing promotional, technical and service support to
distributors and customers.
- Maintain a local presence either through frequent visits to the market,
an in-country office or through a Chinese partner.
Austrade can provide further advice on these strategies.
Austrade’s 3iPET Initiative
Austrade’s Infrastructure and Energy team is supporting a platform to
introduce capable Australian firms to environmental protection projects,
opportunities and contacts in China. Austrade is working with the Chinese
Foreign Economic Cooperation Office (FECO) under the Chinese Ministry of
Environmental Protection on its 3iPET Platform
(the International Platform for Environmental Technology) to introduce
leading Australian technologies to match Chinese requirements in air, water
and soil pollution control and management.
Standardization Administration of China
and National Accreditation Centre for Environmental Conformity Assessment
issue and monitor the relevant standards in China.
Tariffs, regulations and customs
A Value Added Tax (VAT) of 17 per cent is applied to all imports, except to
those specifically used in manufacturing for re-export. Low tariff rates
are applied to certain products in sectors where the government encourages
The implementation of the China Australia Free Trade Agreement (ChAFTA) is
reducing and eliminating tariffs on Australia’s environmental exports and
reducing barriers to business for services providers. Fact sheets and the
full text of the agreement can be found on the
Department of Foreign Affairs and Trade website
, and a
Free Trade Agreement Portal
allows companies to search for products by name of Harmonized System (HS)
code to determine the preferential tariff rate.
Links and industry contacts
Chinese Government departments and agencies:
Foreign Economic Cooperation Office under the Chinese Ministry of
Chinese Ministry of Environmental Protection
Chinese Ministry of Water Resources
Chinese National Development and Reform Commission
Chinese industry associations:
China Association of Environmental Protection Industry
China Environment Chamber of Commerce
China Urban Water Association
China Water Enterprises Confederation
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