China's investment is reportedly increasing in mining, crude oil production, manufacturing, and infrastructure development in Southeast Asian, African and Latin American countries, where the ecological conditions are already fragile.

Although Chinese projects have contributed to the acceleration in local economic growth, investors should not ignore their environmental responsibilities, GEI's Zhi said.

While large-scaled, State-owned enterprises generally observe environmental protection rules rigorously, small and medium-sized enterprises are more likely to create problems in the area, he said.

There may have been cases in which small processing companies are relocating their polluting operations abroad simply because of a more relaxed environmental regime, he said.

The CAEP and GEI also said the country's latest draft guidelines require banks to take into account environmental and social issues when financing development projects overseas.

In that regard, the Export-Import Bank of China has already formulated an internal "green credit" policy.

Similarly, the Fujian province-based Industrial Bank last year reportedly became one of the first Chinese banks to adopt the Equator Principles, a set of environmental and social benchmarks to ensure sustainable development promoted by the World Bank.

(China Daily May 29, 2009)