China is emerging as fertile ground for green investment, with the government supporting the growth of a green economy.

As part of the country's 4 trillion (US$586 billion) stimulus package, the National Development and Reform Commission will put US$30 billion into green projects. Now China is planning to draft another stimulus package to double the nation's 2007 output of alternative energy by 2020, according to Liang Zhipeng, director of Renewable Energy Department, National Energy Administration.

A wind power farm is seen in this undated photo in western China's Ningxia Hui Autonomous Region. China has become the world's fourth country in wind power-installed capacity, an official said on Saturday in Beijing. [Xinhua]

The plan to boost investments in the production of fuel - with hydro, wind and solar - will be announced this year, Shi Dinghuan, the chief director of China Renewable Energy Society said, earlier this month.

China said it would spend 2 trillion yuan on its alternative energy industry from 2006 through 2020. Now it will add another 1 trillion yuan, said Liang.

The New York Times reported that environmental protection and energy savings have huge development potential, with the Chinese government's supportive green policy boosting the confidence of foreign investors.

HSBC estimates that of China's roughly US$586 billion package, US$221 billion has green features, making it the largest green stimulus package in the world, followed by the US at US$112 billion and South Korea at US$31 billion. HSBC's green features included 'rail' and 'electricity grid', which are not mentioned under the green package in the original stimulus.

"The central government's leadership in creating the largest green stimulus package in the world is to be applauded," said Ellen Elle Carberry, Venture Partner, Hao Capital and Co-Managing Director of China Greentech Initiative.

"China has huge renewable energy resources and we are bullish on the country's green investment sector," said Sun Hao, an officer from the International Finance Corporation, a member of the World Bank.

He noted that more and more international investment institutions are eyeing renewable energy sectors in China.

KK Chan, previous head of investments Greater China, Climate Change Capital said clean energy sectors will contribute to local green GDP and get more support from the government.