Central directive suggest investors should look beyond consumer signs
Just a few feet away from flashy offerings by Ferrari and Maserati, mainland carmaker Chery's showcase at last month's Shanghai Auto Show tried to create a buzz with a greener touch.
Nearly a dozen Chery models displayed stickers touting them as eco-friendly, with prototypes of fuel-cell, biodiesel and hybrid saloon cars all competing for attention with the sporty numbers nearby. Chery was by no means alone in touting its green credentials at the show. Everyone from General Motors to growing mainland producers like SAIC and Chang'an prominently featured alternative-fuels vehicles.
The excitement created by alternative-fuel vehicles in Shanghai - nearly all of which are still in the concept stage - reflects a broader hope that growing environmental awareness in the mainland, combined with expanding purchasing power, will lead consumers to flock to green options. But environmentalists, analysts and the companies themselves say that despite the promise, it could take years for so-called 'green consumption' in everything from vehicles to appliances to have a major impact on the country.
For investors looking for environmental opportunities in the mainland, the key may be to look beyond individual consumers. Spurred by a new central government directive, 'green purchasing' has taken hold among many agencies throughout China. Jun Ma, an economist at Deutsche Bank, estimated last year that environmental investment would grow as much as 16 per cent through 2010, with sectors like wastewater and air treatment, natural gas and solar energy reaping much of the windfall.
By contrast, Ma Jun, director of the Institute of Public and Environmental Affairs, a Beijing-based NGO, says that building a culture of 'green consumption' among individuals will take time - requiring more awareness, better information and greater confidence that products labelled as environmentally friendly live up to their claims.
