China stops loans to environmentally unfriendly firms

China has ordered banks to stop new lending to companies that pollute excessively or consume too much energy, as part of a drive to make its economy more energy efficient, state media said Saturday.

Shao Fujun, director of the People’s Bank of China’s credit department, said the central bank had established a database to help banks review companies’ environmental records, the Shanghai Securities News reported.

More than 30,000 pieces of information regarding companies’ environmental violations are in the database, the report said.

Beijing has pledged to slash China’s energy consumption per unit of gross domestic product by 20 percent between 2006 and 2010, as the world’s biggest greenhouse gas emitter seeks to reduce pollution and clean up its environment.

Last month the central government ordered 2,087 firms producing steel, coal, cement, aluminium, glass and other materials to close old and obsolete plants by the end of September — or risk having bank loans frozen and power cut off.

Authorities in the eastern province of Anhui reportedly already cut off electricity to more than 500 factories for a month in mid-August after they failed to meet emission reduction targets.
Source: AFP