Favorable government policies and a growing urban population are encouraging overseas companies to invest in China抯 US$120 billion market for water and sewage treatment services. The sector has drawn interest from the world抯 top water firm Veolia Environnement, number two player Suez of France and Singapore抯 SembCorp Industries, among others. Hong Kong companies like NWS Holdings and China Everbright International and local firms like Shanghai Industrial Holdings and Tianjin Capital Environmental Protection are also rapidly expanding in the market. China has set an ambitious target of treating 45% of urban wastewater and recycling 60% of industrial wastewater by 2005, goals that are expected to involve the building of about 10,000 new sewage treatment plants. To speed up investment, the State Council has empowered local governments to grant franchises.