In reality, the central authorities inevitably look to local governments and foreign lenders to provide the lion's share of investment. Determining which projects will ultimately receive funding and necessary approvals is often a daunting task. Most large foreign environmental firms have looked to World Bank and Asian Development Bank projects for opportunities, and as of July 2001 the U.S. Trade Development Agency is again providing grants in China. The future may be brighter as affluent cities increase spending, multinational investors uncork new sources of demand, and municipalities experiment with new project financing models.
Air Pollution Control
China recently overhauled its Clean Air Act and now mandates desulfurization systems on all new power plants and industrial facilities located in designated sulfur dioxide and acid rain control zones. China is also embarking on an ambitious campaign to curb vehicle emissions in major cities by phasing out leaded gasoline, issuing new tailpipe standards, developing alternative fuel technologies, and investing in emissions control and inspection equipment.
Water and Wastewater Treatment
China and its foreign lenders still spend far more on the water sector than on air and solid waste, especially on the clean up of priority river basins and lakes. But domestic competition is also stiffest in this market. In November 2000, the State Council issued a notice requiring all cities with populations over 100,000 to build wastewater treatment facilities by 2005. To meet funding demands, water tariffs are set to rise, cities are starting to levy wastewater surcharges, and BOT type concession projects are emerging.
Solid Waste Management
China is slowly beginning to enforce its comprehensive solid and hazardous waste law. But investment remains low, despite a dire need for hazardous waste treatment technologies. Low cost resource recovery and refuse handling systems enjoy the best prospects.
