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Officials in northwest China's Shaanxi Province are calling for more "green" investment and urging local governments not to sacrifice the environment on the altar of economic growth.

"Governments in north Shaanxi should carefully assess the environmental impact of investments, especially energy exploration projects, and should not give a green light to those which threaten the environment." said Shaanxi governor Yuan Chunqing.

Yuan made the remark at the 11th Investment and Trade Forum for Cooperation between East and West China which kicked off on April 6 in Xi'an, capital of Shaanxi.

The event has drawn more than 4,000 foreign investors from 30 countries. Organizers said a key feature of this year's event is the emphasis on environment-friendly investment projects.

According to Yuan, the underdeveloped west regions should be on the lookout for industries seeking to transfer pollution from the east.

"We have signed 157 contracts at this year's forum, but not one of them is a high energy-consuming or heavily-polluting venture." said Yan Ximin, director of the Xianyang City Investment Bureau in Shaanxi province.

Yan said Xianyang has signed contracts on exploring the city's geothermal resources and developing tourism, an example of "green investment".

"We prefer agricultural product processing, tourism and high-tech industries. Coal-burning, water-wasting industries will not get a look-in," Yan said.

Foreign capital has also spotted business opportunities in the western regions' "green investment" initiative.

The British investment bank Climate Change Capital (CCC), which is involved in clean energy and environmental protection, set up operations in China last year. It plans to pump 500 million U.S. dollars over the next five years into the Clean Development Mechanism (CDM) in the country.

"We are holding talks with western provinces including Shaanxi, Shanxi and Xinjiang on CDM projects. The 'recycle economy' in China's west offers huge business opportunities," said Lu Yuebing, CCC president in China.

China is already the world's largest CDM credit provider having approved more than 350 foreign-invested carbon reduction projects. Most of the projects are in the western regions.

China's western regions are a critical component in the country's energy structure. The region has 65 percent of the nation's mineral deposits and 76 percent of its water resources. The area bordering Shaanxi, Shanxi and Inner Mongolia has about 60 percent of China's verified coal reserves.

However, western regions are prone to natural disasters such as drought and sand storms. In some areas, where energy exploration projects have multiplied in recent years, the ecosystem has deteriorated.

China has invested 110 billion yuan (US$14.2 billion) on protecting the environment in the western regions since 2000 and has set a target of reduce energy consumption per unit of GDP by 20 percent between 2006 and 2010.

(Xinhua News Agency April 11, 2007)