Is China Going Green? -- Part VI -- So Green It Is Going To Hurt

Interesting article today in the China Economic Review, entitled
"Environmental Crackdown Could Raise Prices."   According to the article, the Chinese government's increasingly tough environmental standards will likely soon cause price increases: 

Stringent new environmental laws affecting the petrochemicals sector could result in price rises for clothes, household goods and other plastic products.  The [Chinese] State Environmental Protection Agency is expected to introduce a more stringent approval process for new industrial projects after it last week outlined the results of a two-month nationwide audit of 127 chemical producers in which it rejected or suspended approval for 44 projects across a range of heavy industries, and published a "name-and-shame" list of 20 projects that fell short of environmental standards.  Analysts said the crackdown has effectively frozen new petrochemical projects and would limit capacity in a sector already squeezed by record oil prices and widespread overinvestment. As a result, petrochemical firms may start charging more for the raw materials they sell to manufacturers of everything from toys to textiles, which would likely be passed on to consumers.

Bottom Line:  The Chinese government strongly favors environmentally sound companies.