As one of the large emitters of greenhouse gases, China is dealing with mounting pollution.
"In China, it's more visible that there's a problem," said Ellen Carberry, a partner with Beijing-based private equity firm HAO Capital. "You walk out your door, and the problem is staring you in the face. And it affects everyone, everywhere, no matter where they live."
The good news, for both the Chinese people and American companies involved in the alternative energy sector, is that China has made resolving the issue a top priority, setting a goal to get 15 percent of its total energy from renewable sources by 2020.
To reach that goal, the Chinese National Development and Reform Commission estimates the country needs $251 billion of investment, and HSBC Global Research in Hong Kong has estimated that about 40 percent of China's $586 billion stimulus package – or $221 billion – will be directed to renewable energy spending.
With the government dedicating such significant funds to addressing the problem, prime business opportunities are blooming for American firms in the alternative energy market.
GE, perhaps the biggest us company in China working across a range of renewable energy sectors, is involved in nine wind farms nationwide.
At its assembly plant in Shenyang, it makes turbines for the Shangyi Manjing wind farm in Hebei Province, which will be the largest in China with 215 turbines producing enough energy to power more than 3,000 average Chinese homes.
Additionally, GE began working with the Sichuan Coal Group this year to use GE-built engines to run a power plant using methane-rich greenhouse gases that escape from coal mines.
Chinese government policy can help companies that develop renewable energies. One, for example, that may benefit GE is China's goal to have 10 gigawatts of installed wind energy capacity by 2010.
"It's the policy from the central level to the provincial level, and all the government officials in China have been mobilized to develop renewable energy and new energy," said Jing Su, director of the US-China program with the American Council on Renewable Energy, which assists US companies in developing renewable energy projects in China.
One firm that has already reaped the rewards of China's pro-environment policies is Mammoth China, part of a Minnesota-based company that makes energy-saving air conditioners for commercial and residential buildings. According to its president and chief executive officer, Alfred Ng, the company has completed close to 10 million square meters of projects in China since 2002.
"Our business has grown 30 percent each year due to the Chinese government's energy law and measures of using renewable energy," Ng said. According to the CEO, the Chinese government is happy to welcome US-based companies to the country to develop projects and provide incentives for them.
"If you set up a business in China, you're contributing to the Chinese economy," Ng said.
Of course, not all US companies have been as successful as GE and Mammoth China in entering the market, and many have struggled to navigate the Chinese bureaucracy. Nonetheless, Su agreed with Ng that it can be done and the Chinese government wants to help.
"It all depends on whether you know what you are doing," Su said. "You need to get a good financial management team and partner with local organizations to get permits. It's really very coordinated, the job that needs to get done."
Recognizing the potential obstacles American environmental companies face in doing business in China, Carberry of HAO Capital formed the China Greentech Initiative with her colleague Randall Hancock.
The organization is meant to help companies around the world take advantage of the enormous opportunity to develop renewable energy projects in China, and currently has partnerships with GE, Duke Energy, Dow Corning, Dell, Cisco Systems and Nike.
"In reality, no one company can move forward on its own," Carberry said. "The initiative started through a conversation with the chief executive officer of one of the major US multinational corporations, who said, 'In China, the greentech market opportunity is too big, the problem is too urgent and the market too complex to go it alone.' Thus, the platform of bringing companies together became the solution."
Already, the organization's efforts have begun to bear fruit. The Wall Street Journal reported in June that Duke Energy is in talks with Chinese companies to create joint ventures to develop alternative energy projects like clean coal and wind power. And last month, Suntech Power Holdings Co Ltd reached agreements with China to develop four solar power plants with a total capacity of 1.8 gigawatts.
Given the sizable sum the Chinese government has reserved for tackling its green energy issues, more American firms are likely to follow.