Bigger green role for private firms

More sectors to be opened up to market competition, including petroleum, chemical engineering and natural gas

China has pledged greater support for private businesses in the energy saving and environmental protection sectors, with measures to level the playing field and offer more favorable industrial policies as the country ramps up efforts to meet its pollution fighting goals.

A guideline issued by the National Development and Reform Commission, the All-China Federation of Industry and Commerce and four other government departments on May 21 said the government will create a market environment that is fairer and more open for private businesses in the two sectors.

The country will open up more key sectors, including petroleum, chemical engineering, electricity and natural gas, to introduce market competition and enable greater involvement by third-party businesses in energy control and the treatment of pollutants, the guideline said.

Local authorities must offer equal treatment to private and State-owned businesses in the development of environmental protection infrastructure such as sewage and garbage treatment facilities, the disposal of medical and other hazardous waste, and the construction of recycling centers, it added.

The guideline also pledged continued efforts to refine bidding mechanisms, with authorities prohibited from setting up restrictive regulations that bar the entry of private businesses.

Local authorities should refrain from offering competitive advantages－in the form of strategic cooperation agreements－to businesses during bidding for projects.

An NDRC official said in a news release that most market players in the environmental protection and energy saving sectors are small, medium-or micro-sized businesses, which are more susceptible to the shocks of the COVID-19 pandemic.

The guideline is intended to solve problems faced by private businesses in the market environment, support policies and information requirements, the official said.

Local authorities must ensure the full enforcement of the guideline and extend more help to private businesses in the sectors so they can survive the pandemic and grow further, the official said.

The authorities also pledged in the guideline to offer better and more stable industry support policies, with measures to support the involvement of private businesses in the country's major projects.

Private businesses will receive support to take part in the campaigns to prevent and control air, water and soil pollution, and incentives to participate in the construction and renovation of infrastructure, treatment of polluted water bodies and seawater desalination projects.

The guideline urged local authorities to fully implement tax breaks offered to businesses, including favorable corporate tax and value-added tax policies.

The government will scale up support of green finance for private businesses. For businesses facing problems accessing capital, authorities will encourage capital management companies, investment funds and State-owned capital to help alleviate their financial difficulties, the guideline said.

It also highlighted the need to offer aid to struggling businesses equipped with core technologies and having good business prospects, and enabling more private businesses to innovate their business models.

Fan Yuansheng, president of the China Association of Environmental Protection Industry, said the challenges faced by private businesses include a market environment that is not open and fair enough and a lack of sound management and risk control measures.

Other challenges include a lack of innovative capacity, difficulties in obtaining funding and big debts, he said.

Fan said the guideline includes specific items to safeguard the interests of private businesses.

"Private businesses are never fearful of market competition, and they are good at thriving in competition," he said.

The guideline will promote the opening up of markets and prevent new monopolies, Fan said, with provisions barring practices that excluded private businesses during government bidding processes to further promote fair market competition.

He added that the COVID-19 pandemic has exposed deficiencies in the country's environmental protection infrastructure, and the involvement of private businesses will help bolster the development of projects for treating medical waste, sewage and other garbage.

The total output value of China's energy saving and environmental protection sectors reached 7 trillion yuan ($981.5 billion) in 2018, and is expected to exceed 8 trillion yuan this year, according to the association.