STOCK MARKET WATCH -- Tuesday, 20 August 2013

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29. 'Liconomics': China's Green Revolution Arrives

http://www.spiegel.de/international/business/chinese-leadership-announces-new-focus-on-green-energy-a-917389.html

This August, China's leaders withdrew to Beidaihe, a bathing resort on the Bohai Sea where they have gone to calmly debate issues of power and personnel since the days of Mao. Politics, or so it seemed, had gone on a summer holiday.

But that's where, on Sunday, August 11, the government released a guideline with the modest title "Opinions of the State Council on Accelerating the Development of Energy-Saving and Environmental Protection Industries." According to the document, the government is upgrading the environmental sector to the rank of a "key industry," a title that had been reserved for the steel and pharmaceutical industries, as well as biotechnology. Under the new guideline, the sector is expected to earn a massive $728 billion (€545 billion) by 2015, and to grow at twice the rate of the rest of the economy.

Beijing wants to boost manufacturers of energy-efficient power plant equipment, significantly increase the number of cars and buses running on liquefied natural gas and further expand the number of wind and solar farms, as well as nuclear power plants.

The government plans to achieve all of this using investments, tax breaks and direct subsidies -- from which companies with foreign investors are expressly to benefit as well.