Chinese environmental companies tap Belt and Road markets

Smoke rises from a chimneys of a steel mill on a hazy day in Fengnan district of Tangshan, Hebei province on Feb 18, 2014.[Photo/Agencies]

China's 44 environmental companies have signed 149 contracts in 54 countries, 60 percent of which are involved in the Belt and Road Initiative, Economic Information Daily reported Monday, citing latest data of E20 Institute of Environmental Industry.

These contracts involve sewage treatment, solid trash treatment, air pollution, soil pollution and noise but half of these contracts are about sewage treatment.

However, in 2016, only 1.57 billion yuan ($238.8 million) were invested in Belt and Road countries, a marginal proportion of China's entire overseas direct investment. The E20 institute predicted that the global environmental market size is about 7.5 trillion yuan, while Chinese environment sector might account for less than 15 percent.

But in 2017, investment in Belt and Road countries have quickened as 4.27 billion yuan has been invested in these countries year-to-date.

Zhang Jieqing, vice-director of China-ASEAN Environmental Cooperation Center, said that two guidance documents issued during the Belt and Road Forum for International Cooperation held in May this year are both related to "going-global" Chinese environmental companies, according to the Economic Information Daily.

These two documents, which are How to Build a Green Belt and Road and Plan on Environmental Protection Cooperation among Belt and Road Countries, tell companies what to do and how to do, according to Zhang.

According to the E20 institute, Chinese environmental companies' "going global" move has evolved into the 3.0 era.

In the 1.0 era, Chinese companies sold equipment and in the 2.0 era, they sold services for projects.

However, in the 3.0 era, which dates back to 2013, Chinese companies have started to invest and manage via mergers& acquisitions or public-private partnership (PPP).

Currently, 60 percent of M&As have occurred in Europe and 70 percent of PPP business, 76 percent of service supplies and 63 percent of equipment supplies are in Belt and Road countries.

The E20 institute added that only in Belt and Road countries these four models of PPP, M&A, service supply and equipment supply all exist.