New energy industries' shares become popular

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Shares in new energy industries are becoming increasingly popular in China's stock market, and are also attracting a great deal of venture capital and investment. But experts point out that the new energy industry must be developed carefully and with proper guidance.

Since the beginning of this year, stocks related to the new energy industry have risen dramatically in the Chinese mainland A-share market.

Li Xunlei, Chief economist of Guotai Junan Securities, said, "The index of the new energy sector has doubled since the start of the year, while the benchmark Shanghai Composite Index has jumped only 30 percent. Investors are paying more attention to the new energy sector and buying more stocks."

This sizzling stock market performance has encouraged more investment in the new energy industry. In Jiangsu Province, many wind power stations and related plants are being set up.

Zhang Guijun, Deputy Director of Funing Eco-development Zone of Jiangsu province, said, "Total investment has exceeded 1.9 billion yuan. Three or four companies will sign contracts with us in the second half of this year, bringing around 1.2 billion yuan in investment."

Currently, more than 30 Chinese companies are operating projects related to new energy automobiles. And the country's installed wind power capacity is now the fourth largest in the world.

But experts warn that the new industry should learn from previous development lessons.

China's solar energy industry has experienced a boom period but is now facing losses due to the shrinking global market. Experts say the new energy industry should be developed under comprehensive plans and clear policy guidance.

Xue Liming, All-China Fed. of Industry & Commerce, said, "The government's industrial policies are now benefiting the whole new energy sector instead of just one industry. Therefore, the new energy industry will have a cost advantage."

Some government officials in energy-related departments say a new energy stimulus plan will be issued in the near future.