The Chinese government has put out the welcome sign for foreign businesses prepared to help with a domestic headache -- sewage treatment.

According to the Ministry of Construction's blueprint, all cities are required to establish waste water treatment facilities that process 45 percent of sewage by 2005 and 60 percent by 2010.

This means the daily capacity of Chinese urban sewage treatment plants is expected to more than double, providing great business opportunities for international companies and financial institutions.

Since 1998, the Chinese government has invested 200 billion yuan (US$24 billion) annually in urban construction. However, domestic funding is far from enough and international capital is therefore badly needed.

Successful examples can be found with the World Bank and the United Nations Industrial Development Organization (UNIDO). Sources with the ministry say that both have carried out a number of sewage treatment projects in China.

The 15 projects financed by the World Bank involve US$2 billion. UNIDO has promised to allocate US$30 billion to help sewage treatment in major Chinese cities in the next decade.

To attract more international investors, the Chinese government has set up favorable conditions in this field during the past decade.

French water company Vivendi is among early investors. It has successfully participated in projects involving tap-water transportation as well as waste water treatment in the cities of Shanghai, Tianjin and Qingdao.

Water pollution has become increasingly alarming in China as the urban population booms and urbanization expands. Although the country has made a lot of progress in waste water treatment, it can hardly catch up with economic development due to the industry's outdated systems and lack of funds.

Insiders maintain that recycling is a must for sustainable development. However, China's water recycling rate is around 40 percent, as against 75-85 percent in developed countries.

Beijing, host of the 2008 summer Olympic Games, has listed a batch of new projects concerning water treatment and recycling to improve its urban infrastructure. These projects are open to both domestic and international investors.

Meanwhile, places other than Beijing are determined to better urban living conditions. Beijing's neighboring Hebei Province alone has so far utilized foreign funds of more than US$300 million every year in this industry.

( June 20, 2002)