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Environmentally Sound Technology *in ChinaN e w s l e t t e
r
Centre for Environmentally Sound Technology Transfer ECO
Investment Forum for EST
for
the Taihu Basin The
Administrative Centre for China's Agenda 21 (ACCA21), through its
operating arm the Centre for Environmentally Sound Technology Transfer (CESTT)
and the local govemments of the Taihu Basin are proud to be organising the Eco Investment Forum for Environmentally Sound Technology for the
Taihu Basin from 26-28 May 1999 in
Huzhou City, Zhejiang Province. The Forum, and the promotion program
leading up to the Forum, is supported by the Chinese Ministry of Foreign
Trade and Economic Co-operation (MOFTEC), the Ministry of Science and
Technology (MOST), the Jiangsu and Zhejiang Provincial Govemments, and the
Shanghai Municipal Government. lt also receives the technical assistance
of the United Nations Industrial Development Organisation (UNIDO). Table
of Contents
This
forum is the result a joint effort by CESTT and UNIDO over the past 10
months. After the conclusion of the first phase, which focused capacity
building for eco investment & technology promotion, a team made up of
three foreign consultants and four national consultants was chosen to work
in the basin for one month. The team selected 138 enviromnentally sound,
economically beneficial and technical feasible investment projects.
Afterwards, a 36 member delegation was organised to attend the Terra Tec -
International Trade Fair for Environmental Technologies and Energy from 2-5
March, 1999 in Leipzig, Germany. Most of the delegation members were from
major cities in Taihu basin, chosen to promote the projects located in
their regions. The delegation also visited the UNIDO Headquarters Office
in Vienna and participated in two business senünars organised by the
UNIDO Investment Promotion Office in Italy. All of these activities have
proved to be important in the success of the upcoming Forum. The
Forum aims primarily at initiating direct contacts between Chinese
enterprises and investment project sponsors and potential foreign partners
to discuss selected industrial, tourist and infrastructure projects as
well as at bringing together local firms with foreign enterprises seeking
business opportunities in China. The Forum will centre on 138 UNIDO
screened eco investment projects as well as a number of other local
projects from around the Taihu Basin. UNIDO and CESTT have prepared
profiles on each of the screened projects and summaries of these project
profiles are available online. Attendees
will participate in panel discussions on local investment policies and
opportunities in Shanghai, Huzhou, Jiaxing, Wujin, Yixing, and Xishan
cities as well as have opportunities to personally visit project sites. Participants
will also have an opportunity to give their own industrial promotion
presentations and set up promotion booths at the forum. In conjunction
with the site visits, one of the main features of the Forum will be
individual business discussions and appointments organised between Chinese
investors and local firms and potential foreign partners and entrepreneurs
to discuss specific
projects. Foreign companies are also welcome to present their technologies
and proposals for co‑operation to Chinese business representatives
attending the Forum. On day two of the forum there will also be seminars
held on the possibilities for foreign participation in the development of
eco-tourism and the eco-industry in China. ECO Investment Promotion in Europe One
pillar of CESTT's strategy to effeetively promote ECO Investment for EST
in the Taihu Basin is to raise the interest of potential foreign partners
in their home countries. With this major objective in mind CESTT, together
with the China Science and Technology Exchange Centre, arranged an ECO
Investment Promotion Mission to Germany, Austria and Italy from 1 to 14
March, 1999. Interested companies and officials from the Taihu Basin were
invited to join the mission and finally a 36 member delegation was set up
under the leadership of Dr. Guo Risheng, deputy director general of The
Administrative Centre for China's Agenda 21 (ACCA2 1). The
first mission in Europe was this year's Terra Tee, one of Germany's most
important environmental trade shows, taking place from 2‑5 March in
Leipzig. Together with the Leipziger Messe GmbH at the Delegation Office
of German Industry and Commerce in Beijing, a comprehensive programme of
presentations and activities was designed to make best use of the time
invested at Terra Tee. Both
ACCA21 and CESTT were present with informative stands on their tasks and
projeets in the International Marketplace at Terra Tee, a separate
exhibition area for the general public concentrating on international
environmental and energy problems and requirements. Nearby, right opposite
the marketplace, companies and representatives from the provinces of
Jiangsu, Zhejiang and Anhui and of an environmental company from Beijing
had their individual stands. During this time, from 2 to 4 March, the
delegation was mainly occupied in establishing contacts with interested German
companies which visited the stands or had been directly approached by
delegation members. The
highlight of the delegation's debut at Terra Tee was without a doubt the
"China Environment and Energy Day" on 5 March 1999, which was
attended by close to 80 persons. This event had been specially conceived
to inform interested German environmental companies on the ECO investment
opportunities in the Taihu Basin and to give them an idea about the
general climate for environmental business in China. Speeches were held on
China's policy and regulations on environmental protection and on EST
promotion followed by presentations from local officials and
representatives from the Taihu Basin conceming their projects. German
participants also talked about the interests and aetivities of their
particular companies and institutions and in the aftemoon there was room
for business meetings between potential German and Chinese partners. The
delegation left Leipzig knowing that it was too early to arrive at any
final conclusions on the outcome of its presence at Terra Tee. Besides the
many contacts that were established at Terra Tee, above all participation
in this trade show was an invaluable experience for all of the delegation
members. After
Terra Tee, the delegation moved on to Vienna. The group leader and other
seven representatives first paid a visit to the UNIDO Headquarters Office
and exchanged information about the progress of ecoinvestment project
promotion. UNIDO officials reiterated their support for this pilot project
for ECO investment. Afterwards, a seminar was held with the Association of
Australian Machinery Manufacturers. Close
to half of the delegation members panicipated. The seminar started with a
video presentation about the machinery manufacturing industry in Austria,
and followed with more presentations by representative Australian
companies and potential financing institutions. Mr. Shi Han, on behalf of
the Centre for Environmentally Sound Technology Transfer, gave an
introduction about the background and contents of the Eco‑investment
Promotion Programme for the Taihu Basin. The vice‑mayor of Huzhou
city, Mr. Tan Yueming, gave an introduction on the investment environment
in the Taihu region. The
last stop of this mission was Milan, Italy where a similar seminar was
held by the Investment Promotion Office of UNIDO in Italy. Representatives
of Italian companies and finaneing were institutions were invited to give
presentations. Both of these seminars proved to be a good opportunity to
make their respective cities better known, to establish contacts with
foreign companies and to effectively promote their projects. Because
the Eco-investment Promotion Tour was objective-oriented and the
delegation members came well prepared for their missions, good results
have already been achieved by the mission. For instance, the Jiangsu East
China Computer Room Group was invited by the Weiss Company for an
on‑site visit in Stugart. Hong Kong Jishi Building Materials Group
expressed their willingness to look for sales agents for Jiangsu East
China Computer Room Group. Wujin Hydraulie Hoist Plant agreed to co-operate
with EPA Power Plant Faeilities Company to develop silt clearing machine
for hydraulie power stations and the ESI International Environmental
Protection Service Company showed great
interest in waste disposal projects in Wujin city, Zhejiang Hongbo Group
established contacts with German Heurst Company and planned to have a
formal meeting in April. LIST Waste Water Treatment Company invited the
vice mayor and a company manager of Jiaxing to visit their projects and
expressed their interest for real co‑operation. These
activities were also a learning experience for the
delegation members. Although some of the members had worked for investment
promotion in their cities, they learned from this experience how to better
communicate with foreign investors from different cultural backgrounds. lt
was also a valuable experience for the mission organisers. More follow-up
activities will take place to guarantee the success of the Forum scheduled
from 26 to 28 of May in the Taihu Basin. We are expecting many interested
foreign investors to participate in this event. The Impact of Credit Reform on China's
SME's Experience
from both China and other countries show that SMEs perform an essential
role in economic development. Their healthy development is critical in
promoting economic growth, inereasing employment ratios, reducing the
risks of financial crisis and keeping vigor in the national economy.
According to statistics from 1996 there were a total of 506,445 industrial
enterprises with independent accounting systems in China. Medium and small‑sized
enterprises accounted for 16,780 and 482,518 respectively, a combined
98.6% of the total. Small and medium‑sized enterprises also
contributed 56% of industrial value added and absorbed 70% of the
employees for all industrial enterprises with independent accounting
systems in China during 1996. Confronted
with serious external competition, Chinese SMEs are simultaneously faced
with the need to outperform the competition, enlarge the share of their
products and services on the market and bring themselves to higher levels
of development. Scholars generally call this transition Second
Development. An effective approach to achieving these targets is to
select and adopt environmentally sound technology (EST) to improve
efficiency in the use of energy and materials, upgrade technology and
bring out new products. At present, lack of sufficient capital is one of
the prevailing obstacles to SME's Second
Development. Apart from private fundraising, SMEs mainly borrow loans
from Chinese commercial banks. Loans targeting SMEs from Chinese
commercial bariks are characterised by a large quantity of high risk and
small sum loans. Chinese SMEs have comparatively less access to business
loans due to the following obstacles:
The
State Council and the Peoples Bank of China (PBC) have issued a series of
financial policies focusing on the reform of commercial banks' lending
business since the end of 1997. Some of these are very important to
Chinese SMEs and include, for example: A
clear statement of support for the development of SMEs. The PBC has for
the first time required all types of commercial banks to set up small
business credit departments, and city commercial banks and eity and town
cooperatives will devote a major portion of credit to SMEs of all kinds of
ownership. In addition, commercial banks should cooperate with responsible
departments to support the establishment of collateral ageneies working on
behalf of SMEs. All types of commereial banks should increase the number
and sums of lending loans given out and provide guidance to SMEs to
improve their managernent and operations, upgrade technology, increase the
quality of their products and prevent environmental pollution; Beginning
in the second half of 1998 commercial banks began using a risk management
systern for evaluating loans. This new systern is used to classify löans
into one of five categories, normal, needing oversight, second class,
suspect and bad. This is quite different and much more manageable than
Chinese banks traditional loan classification system; Canceling quota control for state‑owned commercial bank loans. Now, under the guidance of the State's credit policies, all kinds of commercial banks are able to independently lend working eapital loans and fixed asset loans on the basis of their owned capital. These
policies will have the following impacts on SMEs' borrowing activities: Lending
loans for SMEs by commercial banks will increase at the macro level. This
will ensure that all commercial banks have a definite amount of loans
available for SMEs. For example, in July 1998 the Mingsheng Bank lent 500
nüllion yuan to 100 SMEs and the Agriculture Bank of China (ABC) has
decided to offer 25 billion yuan to TVEs in year 1998‑, The
relationship between banks and enterprises will change. In the past,
commercial banks offered loans strictly according to a credit plan worked
out by the govemment that was easily influenced by local govemments. In
this case banks operated more like an extension of a governmental
department. The newly issued evaluation systern urges commercial banks to
prioritise quality and econornic profitability in their lending business.
Commercial banks will have to put much more attention on the financial
situation of SMEs through such measures as a timely analysis of their
balance sheet, cash flow tables and income staternent, and fürthermore
will if necessary directly intervene in their management and operation.
This development will bring the relationship between the two closer than
ever before in the past. Overall, the econonlic profitability of lending
loans is the most essential factor in deciding whether or not to offer a
loan. Also important, investments by SMEs are required to meet national
industrial and environmental standards to ensure the safety of loans
throughout the ensuing stages of development. This lesson was driven home
in 1996 when a number of enterprises falling under the "15
Small" polluting category were closed down by the State. The
Agricultural Bank of China, which was heavily involved in these industries,
lost a great deal on loans made to this sector; and the difficulty of
guaranteeing loans for SMEs will be alleviated. A new mechanism for risk
guarantee funds will be established and brought into practiee. The
operating method for this kind of fund is predicted to be sirriilar to the
Shanghai model in which the risk
guarantee fund is made up of financial revenue collected from all levels
of local govemment. With this guarantee as a basis, commereial banks can
offer special loans to those SMEs that have high technology, good
potential market growth and meet the requirements of national and local
industrial and environmental policies but are unable to provide adequate
loan guarantees on their own. Investment projects, which are highly
polluting and low in efficiency for energy and materials use are less
likely to enjoy the support of these funds. When
looking to commercial banks for financial support in pursuing
opportunities for continued development technology selection and adoption
by SMEs is a decisive factor in their success or failure in obtaining a
loan. EST has a number of economic and environmental benefits that cover
almost all aspects of SMEs' operation, production and management. In
addition, many provenly effective ESTs are recognized and accepted by
financial institutions. For this reasons it is predieted that SMEs which
move first in adopting environmentally sound technology will enjoy
priority status in receiving loans from commercial banks, assuring them
greater opportunities for future development. The
Second National Workshop on Acid Rain and
Emissions Reduetion The
Second National Workshop on Acid Rain and Emissions Reduction was held in
Beijing from 19-20b March 1999, jointly sponsored by the ADB, UNEP
Environmental Assessment Programme for Asia and the Pacific,
and ACCA21. Undertaken by CESTT, this workshop raised topics concerning:
the application and modification
of the RAINS-ASIA model, applied research of the model in China, trans-boundary
conveyance of acid deposits, and policies and lechnologies for the control
and reduction of acid rain and carbon dioxide enüssions. More than 30
experts specializing in the field of acid rain and carbon dioxide attended
the workshop. Also present were Guo Risheng, deputy director general of
ACCA21, and Dr. Ouano, senior environmental specialist at ADB. At the
workshop, Mr. Shi Han, director of CESTT briefed the participants on the
progress of the Acid Rain and Emissions Reduction in Asia" Phase 11
project, which received technical assistance from the ADB. Other major
speeches ineluded: Major Activities and Achievements of the ADB Acid Rain
Project, given by Dr. Sunil Malla from the UNEP Environmental Assessment
Programme for Asia and the Pacific Case Study of the RAINS ASIA Model in
China, given by Dr. Flu Yifen from the Institute of Atmospheric Physics
under the Chinese Academy of Science Influence of the RAINS ASIA Model
Applied in Eleetric Power Planning and Suggestions, given by Liu Simei,
general engineer of the Environmental Protection Institute of Electric
Power in Nanjing Countermeasures for Controlling China's Atmospheric
Pollution, given by Dr. Xu Xuchang from the State Laboratory of Clean Coal
Combustion under Qinghua University Applied Research of the RAINS ASIA
Model in Guizhou Province, given by Prof. Zhao Dianwu Environmentally
Sound Technology in China is the newsletter of the Centre for
Environmentally Sound Technology Transfer (CESTT), located in Beijing,
China. CESIT's mission is to promote the transfer and adoption of
environmentally sound technology (EST) by forming a bridge between policy
makers, technology suppliers, technology developers and Chinese industry,
in particular small and medium-sized enterprises (SMEs). CESTT
serves to: provide EST-related
inforrnation to both Chinese and international elients; introduce
appropriate foreign environmental technologies into China; present the
needs of Chinese SMEs to the international community; and facilitate the
commercialisation of Chinese environmental technologies. This
bimonthly publication aims to disseminate information related to the
promotion of EST transfer and its adoption. If you would like to join our
mailing list and thus receive this newsletter and other important
publications, please fill out the form below and fax/mail it to the
address given. If you have questions about CESTT or EST in general, or
would like to subnüt articles for the next edition of the newsletter,
please feel free to contact us via phone, fax, or email. Centre
for Environmentally Sound Technology Transfer 109
Wanquanhe Road Haidian
District Beijing,
100089 P.
R. China Phone:
+86-10-6262-6057, 6256-8803 Fax:
+86-10-6256-8628, 6258-8127 Email:
cestt@info.acca21.edu.cn
Copyright © 2000 |
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