A recent New York Times article about the deadly extremes reached by China's pollution included seriously grim statistics:

  • 500 million Chinese lack access to safe drinking water.
  • The country generates two-thirds of its electricity from coal-powered sources, and most plants use only rudimentary methods for controlling the amount of harmful contaminants released into the air.
  • 95% of China's new buildings don't meet the country's own energy efficiency codes.

However, optimist that I am, I now see a fantastic opportunity for businesses and investors to help reverse this situation -- and profit in the process.

The Chinese government is well aware of the country's environmental problems, but it's been reluctant to aggressively address the issue, for fear of thwarting the country's extraordinary economic progress. The conditions are now getting so bad, however, that many analysts believe the government's unwillingness to address its environmental problems could lead to social unrest.

Therein lies the opportunity for Foolish investors. As China's citizens grow more affluent, it's reasonable to expect that some of those 500 million people without access to clean water will want to rectify the situation. General Electric (NYSE:GE) and 3M (NYSE:MMM) both have a strong presence in China, and they're already selling water filtration technology. As they develop even better and more affordable offerings, the market should expand accordingly.

In the area of coal, again, General Electric, as a major manufacturer of cleaner combined-cycle turbines, could benefit. At least some of the hundreds of new coal plants that are expected to be built in China over the coming decade will likely be manufactured with more advanced turbines.

And in the field of energy-efficient buildings, IBM (NYSE:IBM) is working on deploying buildingwide networks of sensors to better manage energy consumption. United Technologies (NYSE:UTX) is involved in everything from manufacturing more energy-efficient air conditioners to developing fuel cell technology. Both could help reverse China's penchant for building energy-inefficient buildings.

The Chinese symbol for the word "crisis" supposedly consists of two symbols; one represents the term "danger," and the other, "opportunity." There is no doubt that China's environmental situation is perilous, but understanding which companies can help rectify the situation could offer plenty of opportunities for Foolish investors.

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