CHINESE companies are beefing up their environmental protection investment following stricter rules in the area, industry watchers said.

Stricter environmental protection rules could add to companies' cost and thus companies need to move quickly to follow regulatory calls, Ernst & Young said. Closer attention to environmental friendly moves could also bring firms involved in the sector big growth potential, the auditing firm said.

Helen Wang, an Ernst & Young partner, said Chinese companies are working more attentively on this aspect to ensure long-term development.