In addition to governmental investment, the major source of environmental funds, China will encourage enterprises, the private sector and overseas capital to invest in environmental infrastructure construction, management and industrial pollution control, said Wang Yaoxian, vice director of the planning and financing department under the State Environmental Protection Administration.

Speaking at a workshop on China's environmental financing policy, Wang said that China is working on the 10th Five-Year Plan (2001-05) for the environment. Increasing environmental investment is an important measure to realize China's future goal of environmental protection.

A lack of funds has been a long-term problem restricting China' s development of environmental protection. China's environmental investment only accounted for 0.72 percent of GDP from 1986 to 1990, and 0.8 percent of GDP from 1991 to 1995. The ratio increased to around 1 percent from 1996 to 1999.

Experts predict that China's environment could not be radically improved unless the ratio is above 1.3 percent, which means a huge investment in pollution control.

China will face a sharp contradiction between supply and demand of environmental funds. A multi-channel environmental financing system needs to be set up in China to meet the demands of environmental protection and economic development, Wang stressed.

The three-day workshop was jointly sponsored by the State Environmental Protection Administration and the Organization for Economic Cooperation and Development, aiming to offer the Chinese government advice on environmental financing.

(21dnn.com 11/24/2000)