However, in the following decades, one major barrier to the promotion of energy efficient buildings was the business sector, which took a defensive stance against the government policy, as it had failed in providing incentives to encourage businesses to take energy-saving precautions.

"With the public still to be educated on the importance of energy efficiency of buildings, the popularization of energy-efficient buildings has seen unbalanced development between big cities and small ones. Lack of a functioning management system still affects the effective promotion of this cause," Qiu said.

2005 is an important year for landmark energy efficiency events. Two national standards on building energy consumption, one on civil residences and the other on public buildings, came out that year. Also in 2005, the Chinese Government drafted a strategic goal of reducing new urban buildings' unit energy consumption by half by 2010.

In the second half of 2007, a series of regulations on energy-saving architecture were launched. According to these regulations, developers or architects who ignore energy consumption standards will face fines or a ban on selling their property.

Of all Chinese cities, Beijing has become a pioneer in adopting new building energy consumption regulations. Since July 2005, the Beijing Municipal Government has regulated that the purchasing contract between developers and homeowners must include energy-saving standards adopted in the property and compensation clauses. Another regulation, enacted on September 1, 2005, states that construction companies must have their designs approved by government agencies when they apply for construction permits. Projects that fail to meet energy saving design standards do not receive the construction permit.

According to a new standard of energy saving in public buildings issued by Guangdong Provincial Government, starting from April 15 public buildings, including hotels and office towers, are forbidden from using large glass-curtain walls.

Qiu said local governments should conduct regular checkups on the energy use of public buildings, including government office buildings, and those that that fail to meet energy saving standards should be publicized.

The last two years have also witnessed the launch of new programs offering incentives to companies that save energy. In September, the Chinese Government decided to allocate 7 billion yuan from central finances to support the technical upgrade of companies to raise energy efficiency. The government has listed 10 key projects to receive financing at the first stage, including upgrading coal-fired industrial boilers, technologies to raise petroleum efficiency and produce oil substitutes, energy-saving technologies in architecture and energy saving lighting technologies.

Subsidies from the government will be used as impetus to encourage companies to upgrade in these areas. The government will entrust professional energy consumption organizations to audit company reports on energy saving and then decide whether they have been faithful to the claimed amount.

In order to further activate companies, the government may prepay part of the subsidies for technical upgrade projects. After these projects are finished, the government will calculate the exact amount of financial reward based on the energy saving effects.

Social investment

Enshi is a backward region in central Hubei Province. In the past, the primary and junior middle schools in rural areas of Enshi could not afford the energy to heat water. Some boarding schools in the region even raised pigs to subsidize their expenditure.

Sponsored by a cooperative program with an international non-government organization, two primary schools in Enshi were able to build efficient energy systems in 2004. New lavatories were built, where human and pig excretion and garbage are turned into biogas. The biogas produced is piped into the kitchens to cook meals and heat water. These two schools now have a round-the-clock hot water supply. The residue from biogas production is used as manure for vegetable farms. The pilot projects have also equipped the two schools with solar power street lamps and clocks. Now such energy schemes have been implemented in 51 schools in Enshi.

China has been expanding the use of renewable clean energy, which has exhibited great market potential. Steve Papermaster, Co-chair of the Energy Committee of the U.S. President's Council of Advisors on Science and Technology, said at a seminar on international clean energy cooperation in Beijing that an increasing number of investors are interested in the market of clean energy-related industries, so money is no longer a problem for research and development.

In September, China's top economic planner, the National Development and Reform Commission, issued a long-term development plan for China's renewable energies. According to this plan, China will steadily raise the ratio of clean and renewable energies in the overall energy portfolio. By 2020, the consumption of renewable energies in China will account for 15 percent of total energy consumption. By then, the total capacity of hydroelectric generators will reach 300 million kilowatts, total capacity of wind power generators 30 million kilowatts, annual bio-power production 30 million kilowatts, annual usage of biogas 44.3 billion cubic meters, total capacity of solar power generators 1.8 million kilowatts, annual production capacity of fuel ethanol 10 million tons and annual production capacity of bio-diesel 2 million tons.

China's sector of environment-friendly technologies has become a new favorite among international venture investors. In 2006, investment in clean energies increased by 147 percent over the previous year, from $170 million to $420 million. The figure for 2007 is estimated to surpass $600 million.

British investment banking group Climate Change Capital has already started several investment programs on renewable energy projects in China.

"The market of renewable energy in China is booming and full of opportunities," said Torsten Merkel, director of Cleantech Group's European unit.