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Enhance Investment Force, Innovate Financing Mode

Date: Aug 10, 2010      Source: IEEPA      
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Chinese government has promulgated energy conservation emission-reduction technologies and product development direction, namely, to collect the investment through market means. Such capital has leverage and influential effect. Energy conservation emission—reduction work is closely linked with technology progress, which, to a great degree, needs investment. Therefore, it is imperative that how to establish sound investment mechanism, give play to the role of government finance, enterprise and social funds, and form common development mechanism. Here are some opinions shown in the following:

Gao Dongsheng, Deputy Director of Energy Conservation and Resources Utilization Department of the Ministry of Industry and Information Technology

1. Give play to support and guidance function of central government investment. In consideration of limited central finance, huge demand of environmental governance and emission-reduction, central government should focus on financing technology innovation, application and promotion during the 12th five-year plan.

2. Give priority to energy conservation emission-reduction through existing investment channel. At present, local governments have set special funds for emission-reduction, some of which have been input to small or medium-sized enterprises. Technology transformation investment, with high proportion in 2009, and will be added in 2010 to support enterprises to boost up existing capability by energy-conservation emission-reduction technology.

3. Give play to enterprises’ role as investment subject, and execute current policies conducive to technology development. Rules have been formulated for middle and long-term planning and policies to support enterprises’ energy-conservation emission-reduction, and preferential taxation policy have been given to technology development and product application.

4. Expand market financing, innovate financing mode, which is the most important and imperative.  At present, there are sufficient capital mobility in capital market. As for how to guide capital to energy conservation and emission reduction field, two aspects are concerned:

(1) establish investment fund for energy-conservation and environmental protection industry, which has been studied by the Ministry of Industry and Information Technology;

(2) encourage eligible enterprises to seek IPO, give top priority to help enterprise of resource-saving and environment-friendly type go public by offering them energy-conservation, environmental protection, emission-reduction and low carbon technologies.

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