Sustainable business plays step child for now
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Despite the mainland's increasing efforts to promote cleaner environment and social responsibility, companies involved in sustainable businesses still find it difficult to attract investors.
"The overall situation for sustainable business in China is very promising, but we need venture capital. The problem is that investors are not familiar with this line of business yet," said Ye Weijia, director of New Ventures China, a non-governmental organisation that promotes environmentally friendly business.
Sustainable businesses, typically run by small private firms, already have a hard time getting bank loans, as only 8.8 per cent of total lendings by state-owned commercial banks went to the private sector.
Private equity funds also do not seem to be interested in investing in green businesses, while the government has done little to support them.
"I started my business in 1980 when I quit my factory job, but I have yet to find an investor. With extra funds we would grow very quickly because my technology is excellent," said Chen Jing, manager of Jiangsu Ruikang Organic Food, which specialises in organic teas and honey exported to Europe.
"We need government sponsors as well as investors," she added.
"Over the past couple of years the government has made new business development funds available and it's no longer as hard as it used to be to get bank loans - though it's still tough for private companies."
To bridge the gap, New Ventures China runs a programme to link up sustainable businesses and investors, said Mareike Hussels, who works for the programme at the World Resources Institute in Washington, DC.
"It is a struggle to find investment in China," Ms Hussels said. "Few funds are familiar with investing in environmentally sustainable businesses. They don't know you can make money out of it."
New Ventures China holds an annual forum in Beijing at which 10 "sustainable business champions" are shown to potential investors.
The situation for sustainable business was improving, Mr Ye said.
"Five years ago there were no investors interested in sustainable development because there was no market. The financial world is now getting better at understanding the potential to make money."
Nevertheless, even venture capitalists with an eye for ethical investment remained ruthless about picking a winner. "They may be green, but the bottom line is still to make money," he warned.
