Environmental protection faced an unprecedented challenge in China last year, as this country of 1.3 billion people worked to balance social economic development with its resource and environmental limitations. With international awareness a growing concern and Beijing readying itself to host the 2008 Summer Olympics, advancing a culture of conversation was advocated by the 17th National Conference of the Communist Party of China. China’s State Environmental Protection Administration and State Development & Reform Commission issued the 11th National Five-Year Plan for Environmental Protection (the Plan) on Nov. 22, 2007.

This is the first time that the State Council has required provincial- and ministerial-level governments to put greater emphasis on pollution control and contamination treatment, and required local governments to include environmental protection goals, task measures and demonstration projects in their local economic and social development plans.

An assessment system on environmental protection was developed to evaluate local governments’ achievement above and beyond GDP numbers, previously the only criterion for evaluation.

In a strategic move not typical of the Chinese government, the Plan encourages cooperation with foreign countries, businesses and international organizations to introduce foreign capital, technologies and management experience.

Soil Remediation Goals
One of the main goals of the Plan is to prevent soil contamination. To achieve this, a nationwide soil pollution survey is ongoing while a system for environmental soil monitoring and quality assessment is developed. Pollution-generating factories that move out of cities will be required to conduct soil remediation after the facility is demolished.

At China’s first national soil pollution control meeting held in Beijing on Jan. 8, Zhou Shengxian, minister of the State Environmental Protection Administration (SEPA), announced a new national initiative to inspect soil on farmlands and new construction sites for pollution.

To move these goals quickly forward, the Plan includes measures to set up key labs and engineering technology centers to increase capacity for environmental monitoring. The priority objective for environmental science innovation in China is the development of land pollution controls and soil contamination remediation technology. The environmental industry will also concentrate on soil remediation issues, especially chemical contamination remediation and mine reclamation.

Investment Demand
The total investment on environmental protection will reach 1.35 percent of GDP in the 11th Five-Year period. It is estimated that the investment in nationwide soil investigation, contamination remediation and ecological conservation zone construction during this same period will reach RMB 30 billion Yuan, of which the government will contribute 55 percent through special environmental funds drawn from all levels of local governments, as well as government subsidies.

Guarantee Measures
The Chinese government is advocating a recycling economy that promotes environmental protection, energy efficiency and pollution discharge reduction. The government is creating demonstration projects and developing industrial parks related to environmental protection and waste treatment that serve as examples.

But the current financing system can’t meet the demand for environmental industry development. This requires policy innovations that combine government adjustment and market systems that encourage policies to help capture investment from the private sector and utilize market resources.

For example, the government has considered creating an independent environmental tax to improve the current pollution discharge pricing system. Banks, especially policy-oriented institutions, will strengthen loan support to environmental infrastructure construction projects and enterprises’ pollution treatment projects.

It is necessary to accelerate the amendment and improvement of the current standards of environmental laws and regulations in China, including technology regulations and environmental standard systems. Local governments are encouraged to establish much stricter local pollution discharge standards. Juristic departments will guarantee enforcement of environmental laws and monitoring by creating procedures that enhance their effectiveness and identify legal liability.

In another first, the nation announced the establishment of the Sino-U.S. Technology Center for Land Remediation at Beijing Jiaotong University.

It is expected that the environmental protection industry will enter a new era during the 11th Five-Year period, and land remediation will soon form its own sector within China’s industrial base.

Diana Bao is vice president of Beijing Honde Land Redevelopment LLC, in Beijing, China.