China Environmental Law

A discussion of China’s environmental and energy laws, regulations, and policies

China Environmental Law header image 2

China’s Stimulus Package: Energy & the Environment

November 19th, 2008 · 1 Comment

Is there any money in China’s recently announced stimulus plan for energy and the environment?  Yes, quite a bit, but the details are still sketchy.  Much of what is reported below was gleaned from articles at China Stakes which has done a great job covering the details of the stimulus package.

General Package

Under the Plan at least RMB 4 trillion (US$585 billion) to be pumped into the economy through 2010.  The money will come from the central government (1.18 trillion of total), local government and state-owned enterprises.

Big winners will be China’s railroads (among other upgrades, money is destined for the construction of special lines for the transportation of coal between the major coal terminals of the country), and the cement, iron, steel, and glass industries. 

However, fully 25% of the total (US$146 billion) is reportedly earmarked for “environmental protection.”  A significant amount will also be spent on energy production and energy infrastructure, but it is harder to quantify the total amount destined for these projects.

Q4/Q1 Expenditures

100 billion RMB (US$14.6 billion) has been authorized by the central government for expenditure by 11 state departments (other departments, such as the Railroad Ministry, may spend additional sums) in the next 100 days or so (before the NPC sessions next spring).  The departments allocated the 100 billion include the Ministry of Water Resources (20 billion ) and the Ministry of Environmental Protection (± 25 billion).  This money will primarily be used to advance projects that were already in the pipeline.  It would be nearly impossible to get significant new projects started in that time frame.

There is some information about how this initial stimulus slug will be spent.  Set forth below are some of the energy and environment projects recipients.

Ministry of Water Resources (MWR)

The MWR’s 20 billion has been allocated as follows (as noted, many of these projects were already under construction, so I assume the plan is to quicken the pace of construction):

  • South-to- North water diversion project:  2 billion
  • Water Conservancy projects: 7 billion
  • Safe Drinking Water projects (covering 15.19 million rural residents): 5 billion
  • Irrigation projects (in main grain production areas): 3 billion
  • Repair of 320 large- and medium-sized dangerous dams: 3 billion 

Local governments are reportedly required to match these “investments.”

Ministry of Ministry of Environmental Protection

The initial expenditures will focus on:

  • Renewable energy developments (Nuclear, wind & solar were tagged as likely to emerge as top priorities), and
  • Water- and energy-saving technologies

No spending totals were given for either item.

Vice Premier Li Keqiang was quoted as saying “environmental protection and energy-saving industries should become new highlights of economic growth in this round of investment to boost domestic demand.”

Closing the gap between urban and rural environmental efforts is another top priority.  MEP Minister Zhou Shengxian said “The provision of safe drinking water and the treatment of pollution in the countryside must be given the same attention as in urban areas.”  A 280 billion yuan (US$41 billion) program to improve sewage treatment in 90 percent of China’s counties is being billed as part of the economic stimulus package, but this project was already in the works, so it seems unlikely that the majority of funds constitute new money.

Money will also be allocated to address regional environmental problems like the “Pearl River Delta haze situation”  Hey, I thought we were told ”haze” was a natural phenomenon, not to be confused with man-made smog.  Perhaps the definition of “haze” differs between Beijing and Guangdong Province.

With all the new or accelerated construction anticipated as a result of the stimulus plan, MEP has reportedly “accelerated the EIA approval process to insure that projects can begin quickly, but MEP Minister Zhou Shengxian insisted that “[w]e will not allow polluting companies which have been shut down to restart.”  [See our previous post, however, for questions surrounding MEP's EIA approval process].

National Energy Administration

The NEA announced a batch of new projects after the announcement of the stimulus package, but the extent to which they will be financed by new funds is unclear.

  • Eastern sector of the West-to-East Gas Pipeline II (destination Hong Kong): 93 billion
  • “Extension” [whatever that means] of nuclear projects in Yangjiang and Qinshan in Guangdong Province: 95.5 billion
  • 10 new nuclear power stations in Zhejiang, Fujian, and Guangdong Provinces (no cost figure given)
  • PetroChina Oil Refinery (1000 ton annual production capacity) in Pengzhou, Sichuan Province (no cost figure given)
  • Reinforcement of urban and rural area grids and construction of ultra-high-voltage DC transmission line between Sichuan and Jiangsu. (the State Grid Corporation allocated an extra 2.73 billion for these projects, but the total expenditure was not given)

As more details become available, we’ll update you.

Tags: Uncategorized

1 response so far ↓

  • 1 Greg // Nov 20, 2008 at 1:52 pm

    Cement, water saving technologies and safe drinking water projects…very interesting!

Leave a Comment