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China's Booming Energy Efficiency Industry

China’s energy efficiency industry is emerging as a high growth sector with the country projected to spend as much as Rmb2.1 trillion (USD300 billion) over the next five years on products and services that cut energy use. The key drivers of this development are the Chinese government's determination to curb the country's expanding energy appetite as well as higher production and energy costs. Firms that develop cost-effective energy-saving technologies, particularly for the most energy-intensive industries, are poised to capture the opportunities. If successful, these enterprises will not only become profitable, but will also help lead China to a more sustainable energy future.

Executive Summary

The recent energy efficiency advances are due to a combination of more aggressive government policies, higher energy and production costs as well as an increasingly competitive environment for Chinese energy-intensive fi rms. As a result, many firms are facing tightening profit margins and must find ways to cut costs. One desirable option - generate savings from decreased energy consumption. It is this need that is driving the current demand for energy efficiency technologies and services.

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