China’s new environmental law, which came into force at the start of 2015, has had a significant impact in its first year, according to a study by the China University of Political Science and Law. China’s increasingly strict environmental enforcement is now a key driver of investment in the steel industry, Kallanish notes.

One measurable impact has been on project approvals, the report notes. Whereas before many projects proceeded with minimal thought to environmental licencing, or in some cases without any licence whatsoever, the new laws make it increasingly difficult to ignore environmental authorities. Environmental authorities approved 159 projects with a total investment of CNY 1.5 trillion ($229 billion) in the first year of the new laws. They also rejected 21 projects with an investment value of CNY 117 billion, giving a rejection rate of 13.2%.

The new laws have given teeth to environmental authorities to back up the already high pollution standards. These include the ability to impose daily-recurring fines on polluting companies. In 2015, authorities issued fines in 715 cases, with a total value of CNY 569.54 million, not including some data from Shandong province. Authorities also recorded 4,191 cases of detention of company officials or seizure of assets.

There remain problems with enforcement however, the report adds. Local governments are often still wary of the impact on economic growth, especially as China is also concerned at a national level about controlling the slowdown in the economy.