Solar panels on display at a recent environmental industry trade fair in Beijing

A wave of low-carbon opportunities is sweeping the Chinese mainland, according to a recent report by the international non-governmental organisation Climate Group. Tens of thousands of companies have been created to capitalise on the green movement, according to the report, and many of them have their origins in Hong Kong.

China's six largest photovoltaics manufacturers, most of which did not exist 10 years ago, had a total market value of more than US$15 billion in July 2008, the report noted. And the solar water-heater market, which employs 600,000 people in the mainland, is worth more than US$2 billion a year and growing at an annual rate of 20 per cent. The energy-efficient car market took in more than US$50 billion, while the electric bicycle market realised more than US$6 billion in 2007. China's leading wind turbine manufacturer has a market value of more than US$6 billion.

"For some mainland cities, the number of new buildings going up is far higher than in Hong Kong," said Edward Yau, Hong Kong's Secretary for the Environment. "It opens up the potential for a new inventory of energy-efficiency buildings, and I think Hong Kong could focus on this to help change the mainland's green landscape."

Green Buildings

	Hong Kong Environment Secretary Edward Yau says opportunities abound for Hong Kong environmental services to expand into the mainland

Mr Yau said that while "backyard factories" still thrive in parts of the mainland, modern cities are also sprouting up. "In some areas, they are adopting the latest in technology and setting standards for the mainland to help them gain recognition as green buildings."

Mr Yau said it was actually difficult to differentiate between Hong Kong and the mainland because many of the factories, especially in Guangdong, are owned by Hong Kong companies.

"That is why two years ago we spent money, Hong Kong money, in the Pearl River Delta to help Hong Kong-owned factories move into cleaner production," Mr Yau said. "I think you will begin to see greater demand from tenants for green buildings. People don't necessarily want to be in the tallest building or the most expensive building. Often, the tenants are asking if it's a green building."

Mr Yau also said Hong Kong companies have a number of opportunities to expand their services into the mainland. "I think Hong Kong companies can be the architects, the surveyors and the builders," he said. "I think Hong Kong companies can help companies on the mainland realise that going green and doing good business are two sides of the same coin."

Paving China

TioStone in Dongguan was set up by a Hong Kong group to serve the mainland market

One firm that sees opportunity on the mainland is Hong Kong's Laputa Eco Construction Material. The company's partners, according to Henry Chiu, a company consultant for Laputa, set up TioStone Environmental Ltd in Dongguan, Guangdong, to serve the mainland market.

"There are two main reasons we went to China," said Mr Chiu. "We did a market study and we found there was a demand because of all the building going on. We also set up a factory there, in part, because of the weight of the paving stones. It wasn't economically feasible to make them in Hong Kong and transport them to the mainland."

Mr Chiu said the factory has been open for the last three months. Because the labour requirements necessary to run the factory are low, there's no need to close the one in Hong Kong.

Mr Chiu said the Dongguan factory was serving a mix of public and private customers, including academic institutions, real estate developers and government entities.

"In China, the project size is bigger than in Hong Kong because of the extensive space," Mr Chiu said. "There's a lot of space to be filled with paving blocks. In Hong Kong, the typical size of a project is a few thousand square metres, but in China the basic size is 10,000 square metres easily."

Cracking the Market

	Henry Chiu, company consultant for Laputa Eco Construction Material

Clement Chen, Chairman of the Hong Kong Federation of Industries, agreed that opportunities are ripe in the mainland for Hong Kong companies.

"In the mainland, one of several obstacles we run into is that, Beijing wants to clean up all the polluting industries but it has few solutions," Mr Chen said. "They have the motive. But let's say an electroplater wants to go environmentally friendly. He has to ask, 'Where can I turn for technical support, for financial support?' That's where Hong Kong comes in."

Mr Chen said Hong Kong has the technical expertise to deal with polluting industries. He adds that Hong Kong also has experience in joint ventures that overseas companies, wanting to invest in the mainland, desire.

"These people want to get into the mainland market, but they don't know how to crack it. As a Hong Kong company, we have the potential because we know where the companies and customers are," Mr Chen said. "We have all kinds of factories, big and small. A good section of them need this help, and Hong Kong is in a very good position.

Then there's CEPA, Hong Kong's Closer Economic Partnership Arrangement with the mainland. "Any overseas company that sets up a joint venture with a Hong Kong company can also enjoy CEPA," said Mr Chen, "so this is an area that the federation is working hard to encourage."

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