Major economies have latched onto low-carbon bandwagon to spur growth

TIANJIN - China needs to compile an investment guide to rope foreign investment into its green projects, an adviser to the People's Bank of China said on Wednesday.

"When the world's capital is seeking investment opportunities in China, we should be more selective, focusing on their expertise, management and talent to fuel the development of the green economy," said Xia Bin, an academic member of the monetary policy committee of the People's Bank of China, the country's central bank.

"An investment guide is needed to show which projects are supported by the government."

China has set up a green finance framework for green financing but it is still at the initial stage, Xia said. Green finance refers to credit, insurance and securities aimed at supporting low-carbon sectors. Major economies have jumped onto the bandwagon of low-carbon development as the traditional way of production has become unsustainable.

Shanghai's banking regulatory bureau said on Wednesday that the city's banking industry offered 48.4 billion yuan ($7.12 billion) to the low-carbon industry at the end of June, an increase of 2.52 percent year-on-year.

According to Gao Cailin, director general of the Office of Financial Affairs of Jilin Province, demand for financing to China's new energy industry, emission reduction and environmental protection could amount to 8 trillion yuan in the coming decade.

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Such huge potential has attracted many international venture capital (VC) and private equity firms into China.

Cai Wei, associate of VantagePoint Investment Management Consultancy Co Ltd, said the company has set up a $1 million yuan-denominated fund with the Tianjin municipal government, eyeing China's clean-tech industry. The US-based VC firm reportedly has $4.5 billion assets under management, with $1 billion going to the clean-tech sector.

"The fast economic growth, high efficiency of local government and rich talent pool in Tianjin has made the city an attractive investment location for us," Cai said.

The Sino-Singapore Tianjin Eco-City, a flagship joint project between China and Singapore, recently signed deals valued at 1.5 billion yuan with nine enterprises, increasing its total industrial investment this year to 2.5 billion yuan.

These enterprises, including Hitachi, Philips and ST Engineering, will set up their R&D, eco-technology and regional distribution centers in the eco-city.

Chinese enterprises are also attaching great importance to developing business in a green way. Feng Lun, chairman of Beijing Vantone Industrial Co Ltd, said green strategies will form part of Chinese companies' core competitiveness in the following three to five years and Vantone would like to take a "deep green" approach to survive the cyclical turbulence of the real estate industry.

Vantone Tianzhu Legacy Homes, for instance, is China's first residential project that meets the LEED's green community standard. More than 20 types of green technology have been used in the project to make it environmentally sound.