Guangzhou, Guangdong -- (SBWire) -- 03/16/2011 -- On January 19, 2011, the Chinese central government proposed to continue intensifying the demand for "energy-saving and emission-reduction" in the Twelfth Five-Year (2011-2015) Plan. This act is expected to help create great commercial opportunity for the domestic bio-energy industry in 2011-2015.

The demand for "energy-saving and emission-reduction" can help lead more investments into the bio-energy industry, because the development of bio-energy industry is beneficial to "energy-saving and emission-reduction" in turn, typical cases of which are electricity generation from agricultural or forest residues instead of coal as feedstock and fuel-ethanol partially replacing gasoline.

Besides the bio-energy industry, "energy-saving and emission-reduction" also promotes the development of many other related industries. According to the report published on January 27, 2011, namely “2010 Development report of Chinese energy-saving and emission-reduction industries”, the industries concerning "energy-saving and emission-reduction" can be seen as a new economic growth point in 2011-2015.

The statistics from China Environment Service Industry Association showed that the growth rate of output value from these industries reached above 15% in 2010 over 2006, and it was estimated to reach 20% in 2015 over 2011. Based on the 20% growth rate, the output value from these industries could be almost USD796 billion, taking up 10% of GDP by 2015.

According to Industrial Biotechnologies China News, Published by CCM International, Ltd., the industries concerning energy-saving and emission-reduction have gradually developed under a series of governmental policies (like fiscal policies) since 2007. For example, aiming to promote the environmental-friendly industries, China canceled the export rebates of 553 products concerning high energy & resource consumption and high pollution-emission on July 1, 2007. After restoring some tax rebates in response to the global financial crisis in 2008, China canceled again the export rebates of 406 products (some of them maybe overlapped with the 553 products) on July 15, 2010.

Moreover, currently all the enterprises engaged in "energy-saving and environmental protection" are entitled to full deduction of income tax in the first three years upon company's establishment and half deduction in the fourth to sixth year upon company's establishment. On the investment side, China is estimated by insiders to invest about USD454 billion in environmental protection during 2011-2015, two times of that in 2006-2010. More related favorable governmental policies are expected to be released gradually in 2011.

All these favorable policies can help direct the domestic and foreign investment into the energy-saving and emission-reduction industries including bio-energy industry.

Besides Chinese enterprises, China also greatly encourages foreign enterprises to invest in "energy-saving and environmental protection" fields. In April 2010, a document from the State Council of PRC was officially issued to better the utilization of foreign investment. The document lists 20 favorable measures for foreign investors, which mandates that China should encourage foreign investors in some fields, such as new energy, energy saving & environmental protection, high-end manufacturing, high technology, etc. Meanwhile, all the investments in fields like high energy and resource consumption, high pollution-emission, etc., are strictly prohibited. China also encourages foreign investments in the Midwest areas.

In the aspect of fair competition, the document also mandates that any foreign investor in China is entitled to the same preferential policies as Chinese enterprises as long as the enterprises can live up to the corresponding conditions. Also, the products from foreign investors will be fairly treated when the governmental purchase is carried on. These commitments can make China win lots of credits from abroad and create a healthy investment environment. In fact, the foreign investment had been positively growing in 16 successive months by November 2010. By now, China is considered to be one of the most attracting host countries for investors.

Notes:
(1) The demand for "energy-saving and emission-reduction" originated from the outline of the Eleventh Five-Year (2006-2010) Plan for National Economic and Social Development and was seen as the fundamental steps for China to become the environment-friendly society.

(2) "Energy-saving and emission-reduction industries" are defined as all the related industries to "energy-saving and emission-reduction" work by this report. These industries include three categories: energy-saving industries, environmental protection industries and new energy industries (like solar energy, wind power, bio-energy).

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