Renewables a risk for investors

'There is a huge amount of potential for foreign investment in renewable energy in China, but there is also a lot of hype, especially in London,' said Stephen Terry, the Beijing-based chief of investment house Azure International. 'Some investors are going to get fleeced.'

He reminded potential investors of the debacle over the utility industry in the late 1980s and early 1990s, when worries about over-investment resulted in the government declaring many power purchasing agreements (PPAs) illegal, and foreign investors left China with empty wallets.

'Look what happened in the traditional thermal industry, and ask whether it will happen again with renewables,' said Mr Terry. 'This doesn't mean it's not a great industry, but look who made the money the last time: it's much easier for local players.

'For foreign investors, the home run is to invest in Chinese exporters,' he said. He cites the success of Suntech Power, a solar photovoltaic cells manufacturer based in Wuxi , which is listed on the New York Stock Exchange and has had huge demand recently from the US, Germany and Japan.

Dr Shi Zhengrong, the founder of Suntech and a former lecturer at the University of New South Wales, is one of China's 10 richest men.