January 18, 2008 -- The National Development and Reform Commission and the Ministry of Commerce jointly issued a foreign investment guide in December, focusing on promoting foreign investment into recycling and renewable energy businesses.

However, the government also set limits on foreign investment in scarce and non-renewable mineral. In addition, the government said it will restrict foreigners from investing in projects that involve high material consumption, high energy consumption, or high degrees of pollution.

The central government isn't alone in promoting the environment.

In November, the city of Chongqing announced it will invest 50 billion yuan (US$ 6.7 billion) in recycling and environmental protection, with the bulk of the funds targeted towards technological innovations aimed at curbing pollutant discharge and saving energy.

The city also announced pilot projects involving the Chongqing Changshou Chemical Parks and the Chongqing Iron & Steel Group Co. Ltd.

"The recycling economy is still at the preliminary stage in China," Lihong Gao, deputy professor of law at the Zhongnan University of Economics and Law, told Emerging China.
"For now, the national economy is in the middle of transitional phase."

As part of the transition, regulators are currently working on new environmental legislation, experts said.

"The regulators are drafting the recycling economy law right now," Lilin Han, law professor at the Northwest University of Politics and Law, told Emerging China. "We still lag behind far away with the developed countries in recycling economy field, the incomplete law system is a main reason."

Earlier this August, the Environmental and Resources Protection Committee of the National People's Congress completed the first draft and handed it to the National People's Congress for approval.