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Green watchdog slams tax breaks for China polluters

China's environmental watchdog stepped up its campaign against polluters by calling for an end to tax breaks enjoyed by exporters of 39 products that it said are a danger to the environment.

The items, including pesticides and batteries, currently benefit from value-added tax rebates when they are exported ranging from 5% to 13%.

Blacklisting the products would protect public health and be a tangible step towards honoring China's international commitments to safeguard the environment, Pan Yue, deputy head of the State Environmental Protection Administration (SEPA), said on the agency's Web site.

SEPA has listed 141 products in total as “highly polluting and environmentally dangerous,” and Pan said more would be added to the list, which would serve as a reference for future trade and taxation policies.

SEPA, a relatively weak agency, is trying to broaden its influence by enlisting other arms of the government to give economic and financial policies a green hue.

Pan on Monday unveiled a “green securities” campaign requiring companies to meet environmental protection criteria if they want to sell shares to the public.

The latest initiative would require the cooperation of the finance and commerce ministries as well as the customs and taxation administrations.

Separately, the banking regulator said long-term loans to highly polluting sectors, including petrochemicals, steel, non-ferrous metals and power, totaled 1.7 trillion yuan ($237.4 billion) at the end of 2007, an increase of 17.2% from a year earlier.

That was faster than the 16.1% increase in overall yuan-denominated loans in 2007. But the regulator said banks had made significant strides because loans to polluting industries had grown 30.8% in 2006. (Reuters)