Chan notes that the country has aggressive plans in place to meet ambitious global standards on alternative energy use, aiming to reduce its carbon emissions per unit of GDP by 17 per cent and slash its reliance on coal-fired power .

China’s latest Five-Year Plan contained many measures aimed at ramping up the country’s use of renewable energy sources, and like many other nations it has additionally suspended plans for nuclear power development in light of the recent tragic events in Japan.

This hiatus on nuclear power development may not be permanent, concedes Chan, but China remains committed to increasing its use of solar, wind and hydro power.

“All of these alternative energy initiatives are poised to benefit from the tailwind of supportive measures from the government. Measures introduced in recent years to propel the growth of wind and solar energy, in particular, include exemptions from enterprise income tax, value added tax refunds, revamped tariff mechanisms and mandatory purchase by grid companies,” says Chan.

“In addition, as hydro power is relatively less costly and China is already the largest hydroelectric power producer in the world, hydro power development is being given a higher priority over its alternative energy counterparts.”

Chan believes that China’s commitment to increasing renewable energy use will make for impressive investment opportunities right across the supply chain. In his view, power equipment firms within the wind energy space are a particularly interesting investment theme, as are diversified energy stocks. In this latter case recent weakness has created relative value opportunities in select names, Chan concludes.