Don’t we all simply love to read about rapid economic growth and industrialization? However, how many times do we actually think about the environmental consequences of this progress? China’s rapid industrial development and solid pace of economic growth have seriously damaging implications for the environment. According to the World Bank, 2 of the world’s 10 most polluted cities are in China.
The nation is dealing with dangerous levels of air and water pollution. When in 2006 China shockingly witnessed 842 pollution accidents, the State Environmental Protection Administration (SEPA) set an aggressive national target of reducing major pollutant emissions by 10% through 2010, or 2% per annum. Not surprisingly, the Chinese government has made controlling China’s pollution problem as one of its top priorities. There are predominantly 2 ways in which the government can control pollution. The first is via a regulatory path, whereby the government sets limits to emission and similar regulations. Secondly, the government is investing billions of dollars into “clean tech” companies.
The 1970s and 1980s witnessed the popularization of “green tech.” The latest “clean tech” concept is green tech and more. From an investor’s point of view, clean tech (or cleantech) offers attractive returns. Clean tech is economically viable and, therefore, sustainable.
With both regulation and government initiative supporting the development of clean tech, various companies, venture capitalists and private investors are targeting this new arena to pad their coffers. China’s wind turbine manufacturing industry has grown exponentially over the past couple of years. The National Development and Reform Commission (NDRC) had earlier set a target of 5GW of cumulative wind installations by 2010. China has already exceeded this and the target has been revised to reach 30 GW by 2012.
Qingdao Land of State Power Environment Engineering Co Ltd (QGLD) is one of the first Chinese companies to jump onto the clean tech bandwagon. The company manufactures wind energy turbines and equipment used to clean water and gas emissions from power stations. QGLD produced its initial large scale turbines (capacity of 1.5 MW) in October 2006. These were produced for use in a wind farm in Inner Mongolia and were developed based on the company’s proprietary technology. QGLD also took massive strides in the power plant water-recycling and gas desulphurization sectors and become one of the leaders in terms of sales.
In April this year, Aureos China Fund (ACF) invested US$5 million in QGLD. ACF is a fund established by Mauritius-based Aureos Capital, which is a leading private equity fund management company specializing in investing expansion and buyout capital in small- to mid-cap businesses.
Despite all the development, China’s clean tech sector is still in its nascent stages. However, with the Asian Dragon’s continued strong growth, this sector is likely to remain attractive for investors and entrepreneurs for some time to come.
* For series, references are published in the last installment of the series.
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