Shanghai at sunset as the sun reaches the smog line

China to boost investment in clean technology

China will accelerate investment in technology to save energy and tackle rampant pollution blamed for a series of health crises.

Social unrest caused by environmental disasters and threats to public health, often the result of the country's breakneck industrial expansion and mass migration to new cities, have been an increasing cause for alarm for the government.

Smog over northern cities in January generated a public outcry, as did the discovery in March of thousands of rotting pig carcasses in a river that supplies Shanghai's water.

The country's cabinet, the State Council, said yesterday that environmental protection would be elevated to a "pillar industry" that would receive government support in the form of tax breaks and subsidies.

It said it would accelerate research into environmentally friendly vehicles and develop technology and equipment for the control of air, water and soil pollution, suggesting China is accelerating efforts to become a world leader in clean technology.

China is already investing 2.3 trillion yuan (£243bn) in energy savings and emissions reduction in the five years through 2015, state media have said.

The State Council said the new plan would ensure the environmental protection industry grows by 15 per cent annually, generating turnover of 4.5 trillion yuan by 2015.

Past efforts to build such "pillar industries" have sometimes led to vast overcapacity and trade conflicts, with China's government accused of giving an unfair advantage to local companies, but the State Council said eligible foreign-funded firms would enjoy the same benefits from the environmental protection plan as their Chinese counterparts.

China has already announced a series of steps to curb pollution and reduce carbon emissions and the central government will direct more of its budget to fund environmental protection industries and encourage eligible companies to issue bonds, it said.

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