One would think China could care less about pollution when its slowing economy is a more pressing problem.
But a recent report on the gas industry shows otherwise.
Local governments are not easing up on emissions as a result of the economic downturn, CLSA said after talking to a group of industrial users in a survey.
Instead, authorities are conducting more frequent field visits, using improved monitoring methods and tightening emission standards, the brokerage said.
“If we fail to meet the environment protection mandate, the local government will shut us down,” CLSA quotes a Shandong ceramic maker as saying.
There has been fear among investors that regional governments will turn a blind eye to pollution as they focus on reviving growth, hence stalling the switch to cleaner fuel such as natural gas.
The survey dispelled some concerns over demand, citing other incentives that will continue to attract factories to convert to gas.
A paper manufacturer told the brokerage that natural gas cuts pollutant disposal costs and causes less damage to machines.
Amid a slowing economy, the prospect of notable increase in gas demand is unlikely.
But China’s anti-pollution policy will serve as a cushion for gas distributors.
An exceedingly bearish view on the sector may not be warranted.
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