Between November 5, 2008, when the government announced the stimulus package, and December 20, the MEP rejected six highly polluting or energy-consuming projects worth 39 billion yuan ($5.7 billion), Wu said.

Pollution treatment

While preventing the revival of energy-consuming and polluting projects, the government is increasing its investment in pollution treatment. A significant portion of the 4-trillion-yuan package includes 5 billion yuan ($732 million) for urban sewage works and waste treatment and recycling facilities; 1 billion yuan ($146.4 million) for water pollution control in major river valleys; and 2.5 billion yuan ($ 366 million) for energy conservation projects, the development of the circular economy and industrial pollution treatment in major river valleys, according to Mu Hong, NDRC Vice Minister. The Central Government's investments in pollution treatment will reach 1.18 trillion yuan ($172.8 billion) by the end of 2010, he said.

China has been increasing its investment in environment protection during the past few years. Between 1986 and 1990, environment protection-related investments totaled only 47.64 billion yuan ($7 billion), while from 2000 to 2005, related investments exceeded 700 billion yuan ($102.5 billion). Environment protection investments have accounted for a higher proportion of GDP, from 1 percent in 1999 to 1.4 percent in 2004.

In its Five-Year Plan 2005-2010, the MEP said it aims to invest a total of 1.375 trillion yuan ($203.1 billion) in environment protection projects, or about 1.35 percent of the country's GDP each year. These investments will focus on water, air and solid waste pollution treatment, nuclear security and radioactive waste treatment, rural pollution treatment and ecological protection, as well as developing environment protection technologies and the industry's capacity.

Major banks in China, which will provide most of the money for the stimulus plan, also will favor environment protection projects in issuing loans. The China Development Bank pledged a further 40 billion yuan ($5.86 billion) in loans last December to support four major areas to spur domestic demand, one of which is promoting energy conservation, emission reduction and the development of a circular economy. Last December, China Construction Bank also increased its loans of some 50 billion yuan ($7.3 billion) for major infrastructure projects, with the majority of which going to environment protection projects.

Sewage treatment will be another important focus for China's environment watchdog in the coming years. Jiang Weixin, Minister of Housing and Urban-Rural Development, outlined the ministry's goals for sewage treatment at a November 11 meeting in Beijing. He said the ministry would speed up the construction of urban sewage works and invest a total of 75.3 billion yuan ($11 billion) in such facilities by the end of 2010. The ministry expects that 36 large and medium-sized cities nationwide will be able to collect and treat all their wastewater by the end of 2009, and that more than 90 percent of the county towns nationwide will have built sewage treatment facilities by the end of 2010, he added.