Wednesday, February 9, 2011

Green Investment Opportunities in China

Investments by the Chinese government are creating a wealth of green sector opportunities. China's huge business and consumer base is creating demand for everything from renewable energy to green buildings.

A good illustration of the profit potential afforded by China's green market comes from Chan Han Meng, executive director of Nature Elements Capital. According to Chan, Green buildings offer a 30 - 50 percent price premium while additional construction costs are only five per cent.

China is investing $736-billion in sectors like wind and solar. Targeting the best entry points to invest in the Chinese green market involves paying close attention to the sectors that, with government support, can compete with traditional sources of power.

Chinese Government incentives in the wind power sector have reduced the cost to between 0.5 RMB and 0.7 RMB per kilo watt hour. Renewable sources of energy like wind power will skyrocket once the cost per kilo watt hour matches coal, currently about 0.4 RMB per kilo watt hour.

China's green energy economy hinges on making clean energy competitive with coal. The Chinese government is waiting for the Parliament to approve measures that will provide loans, grants and tax breaks that will help make renewable energy cost competitive with coal. To help with this goal, China may even impose tariffs on energy derived from coal.

Up to half a trillion US dollars in clean energy investment capital will be required to meet China's proposed green targets over the next five years. This affords opportunities for investors who want to earn significant returns while helping to green the earth.

© 2011, Richard Matthews. All rights reserved.

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