Decoding the Importance of China’s Environmental Law for Foreign Companies

Foreign Companies Can Ditch the Business Risk in China

Manufacturing industry has a direct impact on the environment. As China has become the number one global manufacturing destination, Chinese government has realized the need for fresh policies and laws for protecting environment. For the foreign companies with a manufacturing interest in China, knowing the environmental policies and complying with them properly are some of the key aspects of seamlessly carrying out their manufacturing operations in China.


Over the last couple of years, Chinese government has taken few decisive legislative actions to protect environment. On April 24, 2014, China’s legislature, the Standing Committee of the National People’s Congress, adopted major amendments to the EPL that became effective on January 1, 2015. The revised EPL contains substantive and procedural changes that significantly update China’s environmental legal regime. More importantly, recent enforcement actions demonstrate that the government is determined to do more than change the law on paper. In fact, China officially declared a “war on pollution”.




Article 1- This law is established in accordance with Article 11 of the Constitution of the People’s Republic of China which provides that ‘The State protects the environment and natural resources and prevents and eliminates pollution and other hazards to the public’.


Article 2– The function of the Environmental Protection Law of the People’s Republic of China is to ensure, during the construction of a modernized socialist state, rational use of natural environment, prevention and elimination of environmental pollution and damage to ecosystems, in order to create a clean and favorable living and working environment, protect the health of the people and promote economic development.


Article 3- For the purposes of this law, ‘environment’ means: the atmosphere, water, land, mineral resources, forests, grassland, wildlife, wild plants, aquatic plants and animals, famous spots and historic sites, scenic spots for sightseeing, hot springs, health resorts, nature conservation areas, residential districts, etc.


Article 4– The guidelines governing environmental protection work are: overall planning, rational layout, comprehensive utilization, conversion of harm into good, reliance upon the masses with everybody taking part in the protection of the environment for the benefit of the people.


According to the provisions of the Environmental Protection Law, China implements comprehensive license management for enterprises’ pollutant discharges. According to the Law, if a polluter does not make a correction as ordered by the government authority, the authority has the power to impose fines and other punitive actions.

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