White Paper on Environmental Protection
(Xinhua)
Updated: 2006-06-05 10:27 VII. Economic Policy and Investment Concerning the
Environment
The last decade has seen the largest increase ever in China's investment in
its environmental protection. A pluralistic financing system based on government
support has taken initial shape after years of efforts.
-- Increasing
government input into environmental protection. During the Tenth Five-Year Plan
period, 111.9 billion yuan was earmarked from the central budget for
environmental protection, of which 108.3 billion yuan from the treasury bonds
was used mainly to control the duststorm sources threatening the Beijing-Tianjin
area, to protect natural forests, to turn cultivated farmland back into forests
or pastures, to control pollution around the Yangtze River's Three Gorges Dam
area and its upstream, as well as pollution on the Huaihe, Liaohe and Haihe
rivers, Taihu, Dianchi and Chaohu lakes, to industrialize the reuse and
recycling of sewage and garbage, and to reclaim waste water. Since 1998, the
State has focused treasury bond investment on environmental infrastructure
construction, bringing along a large amount of social investment. Between 1996
and 2004, China's investment into environmental pollution control reached 952.27
billion yuan, amounting to one percent of that period's GDP. In 2006,
expenditure on environmental protection has been formally itemized in the
State's financial budget.
-- Improving policies concerning
environment-related fee collection. The management and collection of discharge
fees have been strengthened by strict separation of their collection and use,
and channeling the fees exclusively into the prevention and control of
environmental pollution. The collection of sulfur dioxide discharge fees has
been expanded to include all related enterprises, public institutions and
private businesses, and the rate of such fees per kg has been raised from 0.2 to
0.63 yuan. The treatment of urban sewage, garbage and hazardous wastes is also
charged, so as to channel social capital in a variety of ways into the
environmental protection infrastructure construction and operation, and to
promote the marketization and industrialization of pollution control. A
concession operation system has been established and implemented for the
operation of urban sewage and garbage treatment. In some places, the operation
of sewage treatment plants and garbage treatment establishments set up by the
government has been transferred to enterprises through public bidding/tendering
and contracting. In this way, the government has strengthened its role of
supervision while the economic returns of the investment in environmental
protection have also been augmented.
-- Formulating price and tax policies favorable to environmental protection.
A mechanism to share fees for renewable energy resources has been established.
The part of the price of grid electricity generated by renewable energy higher
than that of the electricity generated by local desulfurized coal-burning
generators, the difference between the expenses for maintaining the independent
power system using renewable energy subsidized or funded by the government and
the average power price of local provincial power grids, as well as the expenses
involved in renewable-energy-generated electricity to be incorporated in power
grids, will be resolved by collecting extra fees from electricity consumers. The
tax rebate policies for exported products, including iron and steel,
electrolytic aluminum and iron alloy, have been annulled or reduced in group
form. Taxation policy has been formulated in favor of auto industry upgrading
and auto pollution alleviation. The consumption tax will be reduced by 30
percent for auto producers if they reach the low-pollution emission standard
ahead of schedule. Tax reduction or exemption are extended to enterprises
engaged in reclaiming renewable resources, making comprehensive use of resources
and producing equipment for environmental protection, as well as enterprises
using waste water, gas and residues as the main materials of production. The
policy of collecting tax on the occupation of cultivated land is observed
strictly, so as to promote the rational use of land resources, strengthen land
management and protect arable land. The standards of tax collected on the
production of coal, crude oil, and natural gas will be raised in steps in the
future in order to protect mineral resources and promote the rational
development and utilization of resources.
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