Environmental regulations are currently in flux in China. Nevertheless, these regulations are becoming more important, especially for foreign companies with manufacturing operations in China. Air, water, and noise pollution, soil contamination, solid and hazardous wastes are all currently regulated under China's laws. The most recent environmental regulations focus on sustainable development, like the "Law on Solid Waste Pollution Prevention and Control" which emphasizes "preventing now" rather than paying later at the" end-of-the-pipe."

Multi-National Companies (MNCs) are encouraged to use their home country's environmental regulations for their operations in China. Often MNCs face a higher level of scrutiny from the Environmental Enforcement Agencies than domestic facilities. Most officials see them as having the best access and resources to use state- of -the -art control technology. Therefore, foreign companies with, or planning to have, manufacturing operations in China provide some of the best opportunities for US environmental firms.