Anhui and Zhejiang have launched a mutual compensation mechanism related to the water quality of the Xin'an River, which originates in Huangshan, Anhui, and runs into Zhejiang's Qiandao Lake, the main source of drinking water for Zhejiang province and a strategic reserve reservoir for the Yangtze River Delta.

"If the water offered by upper Anhui has a quality higher than the basic standard, Zhejiang should compensate Anhui, and Anhui should pay compensation to Zhejiang if the water quality is lower than the standard" said Lie Weiping, head of the bureau for protection of the Xin'an River.

South China's Guangdong province will construct a 198-megawatt (mw) offshore wind farm this year and connect it to the grid in 2014, according to Guangdong Electric Power Development Co. Ltd. on Monday.

Guangdong has one of China's best environments for offshore wind farms. It boasts 75 gigawatts (gw) of exploitable offshore wind power resources in sea areas 30-50 meters deep. According to the provincial offshore wind power development plan, Guangdong expects to start constructing three to four offshore wind farms, each at a 1 gw level, in 2015.

China's new natural gas pricing system, which links gas prices to fuel oil and LPG prices, would benefit local producers and importers of piped and liquefied natural gas as well as promote domestic production, Bernstein Research said in a note Thursday.

The new pricing system will kick off in South China's Guangdong and Guangxi provinces. There is no clear timeline on when the pricing reform would be introduced to South China or when it would be extended to the other regions.

The Foreign Investment Industrial Guidance Catalog for 2012 encourages foreign investment in strategic emerging industries, such as energy-saving and environmentally-friendly technologies, next-generation information technology, biotechnology, alternative energy, advanced materials, recycling industries, and alternative-fuel cars.

The National Development and Reform Commission (NDRC) publishes the highly anticipated Catalog annually. The Catalog outlines industries in which foreign investments will be encouraged, restricted or completely prohibited. Guidelines in the Catalog become effective January 30, 2012.