Economic Development and Environmental Sustainability
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2014 9th Issue: Environmental protection industry to boom in Gansu

Time: 01/26/2013          Source: China Daily

The energy conservation and environmental protection industries in Northwest China's Gansu province are expected to boom in the next few years, as the local government starts to recognize the huge, pent-up demand in the field amid its green transformation.

"The output value of the energy-saving and environmental protection industries is predicted to hit 50 trillion yuan ($8.26 trillion) in 2015, and will grow at an annual rate of more than 15 percent in years to come," said Hao Yuan, vice governor of Gansu province, in a high-level meeting on Jan 18.

The meeting was initiated by International Energy Conservation Protection Environmental Association, or IEEPA, a non-profit international organization specializing in sustainable development between economy and environment.

Hao added that the government will further improve the policy mechanism tailored for the industries while investing significantly in research and development and technological upgrades in the field, in a bid to answer the growing call for a green and sustainable development.

The economic growth of Gansu province has been underpinned by heavy industry in the past few decades, with high energy consumption and massive emissions, leaving a polluted and fragile ecological system, according to Hao.

To date, Gansu is the only province that has been approved as a national pilot zone of the circular economic model in China, and building "an ecological security screen" that focuses on rebuilding forests, conserving wetlands and water resources, as the province faces land desertification, soil erosion and threats to deteriorating biodiversity.

"That's a huge opportunity for us, although the road ahead is bumpy," said Hao.

The energy conservation and environmental protection industries have been emerging as a new engine to spur the economic growth, as the sector is rapidly scaling out in recent years.

By 2012, the province counted more than a thousand firms -- five are listed companies -- that are engaged in the industries, with sales revenue approaching 4 trillion yuan that took up 0.8 percent of local GDP in the same period.

"However, they are mostly small and micro firms that lack R&D investment and high-tech innovations," said Liu Zhaohua, deputy director of Gansu Development and Reform Commission, who attended the Jan 18 meeting.

"There are various reasons behind this," he said. "A significant one is that these companies are not fully motivated, politically as well as financially."

Liu added that the current incentive mechanisms in the field have yet to be completed and still need improving.

"With the support of the government, we are very optimistic that these industries will take off in the near future," said Niu Yunfei, chairman of Gansu Hongxinyuan Energy-saving Environmental Protection Co Ltd, a local company that provides comprehensive energy-saving services.

"Green transformation in Gansu province is a huge undertaking with massive opportunities. All stakeholders, including the government and companies, need to learn and cooperate more often in order to embrace it," said Li Junyang, IEEPA's secretary general.

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