China has established renewable energy as a basic national policy and said a new law is being drafted to provide legal support to develop it.

A proposal of the draft has been completed by National Development and Reform Commission (NDRC) and is expected to be submitted to Environmental Protection and Resources Conservation Committee of National People's Congress - the country's top legislative body - for review later next month.

Renewable energy refers mainly to water, wind, solar, biomass, geo-thermal and marine-based energy sources.

According to the draft, development and utilization of renewable energy will be driven by the government but with strong encouragement of market forces. Capital, regardless of its source, will be encouraged to be injected into the industry, the proposal states.

Priority will be given to developing renewable energy in rural and remote areas to meet the lifestyle and work demands of local people.

Preferential loan and tax policies will also be implemented to attract enterprises to invest.

The draft highlights the importance of environmental protection, arguing that pollution and ecological damage must be prevented during the process of development and utilization.

After years of efforts, China has made substantial progress in the development of renewable energy, but still lags behind developed countries, and even some developing nations such as India and Brazil, said Xu Dingming, director of Energy Bureau of NDRC.

"Effective policies and legal systems must be formulated to identify the strategic status of the development of renewable energy in the growth of national economy and ensure the rapid development of related industries," Xu said.

Highlighting the significance of legislation on the development and utilization of renewable energy, he said legal support must promote the rapid growth of the nation's energy industries and help improve the energy structure and play an increasingly important role in the nation's sustainable economy.

Energy demands are rising on a yearly basis and may double after 2020.

However, China depends mainly on coal for its energy supply, which has caused severe environmental pollution.

Experts estimate that even if all the coal resources in the country are explored and exploited, it can only sustain another century's energy demand.

(HK Edition 05/17/2004 page1)