In China, a Green Awakening
City Clamps Down on the Polluting Factories That Built Its Economy

By Ariana Eunjung Cha
Washington Post Foreign Service
Saturday, October 6, 2007

WUXI, China -- One morning this summer, residents of this eastern city awoke to find that their beloved Tai Lake had turned rancid. The water was filled with a bloom of blue-green algae that gave off a rotten smell. It was not only undrinkable; it was untouchable. Few living things stirred in the water.

For almost three decades, the city had welcomed some of the world's biggest polluters. Churning out paper, photographic film, dye, fertilizer, cement and other products for the global marketplace, the businesses helped make Wuxi into one of China's wealthiest industrial cities.

They also poisoned the province's vast network of lakes, rivers and canals. In late May, when the toxic sludge reached Tai Lake, which is the main source of potable water for Wuxi's 5.8 million residents, people turned on their taps and got only sludge.

City officials decided they'd had enough. In a series of radical proclamations that sent shudders though the business community, Wuxi declared itself a newly reformed green city.

By September, the city had closed or given notice to close more than 1,340 polluting factories. Wuxi ordered the rest to clean up by June or be permanently shut down. The actions were applauded by Chinese Premier Wen Jiabao, who has vowed to use economic incentives and punishments to aid in environmental protection and resource protection. Last week, China's State Council approved an environmental plan that includes reducing major pollutant discharges by 10 percent by 2010. Plagued by water shortages, choking on dusty air and alarmed by a sharp increase in pollution-related diseases and deaths, China has been searching for years for a way to fix its environment without hurting its economy. China has closed vast swaths of polluting factories in the past, only to reopen them when unemployment rose too high.

Elizabeth Economy, a fellow at the Council on Foreign Relations and author of "The River Runs Black: The Environmental Challenges to China's Future," said this time "the commitment, the profile, the energy behind the state's environmental protection efforts far exceeds anything we've seen in China's history.

"It's not about new ideas, but about enforcement. . . . What is changing are the incentives or disincentives."

On the other hand, Economy said, it remains to be seen whether local officials will follow the central government's lead. "They have never had the bottom-up pressure that makes them change their practices, nor a top-down mechanism for providing the right incentive to make it easy to do the right thing," she said.

This year, some cities are taking measures that show that their officials are beginning to make the environment a higher priority than raising the gross domestic product, a fundamental shift in thinking for a country that can attribute much of its early development to being the place to which others outsourced their pollution.

In recent months, the State Environmental Protection Administration has armed local governments with a new set of tools for punishing polluters. Banks now have the right to deny loans to polluting companies. Officials are able now to force violators to issue humiliating public apologies in newspapers or television announcements detailing their crimes. And utility companies are empowered to raise electricity, gas or water rates for companies that consume too many resources.

The result has been devastating for a growing number of companies.

In Heilongjiang province in the northeast, officials this month announced that they had kicked out 100 polluting enterprises that were sending industrial runoff into a river that empties in Russia. In Shanxi province, the country's largest coal-mining area, officials have closed down most industry in a county whose outdated machinery polluted waterways. And in Inner Mongolia, the government closed a production facility for one of China's biggest companies, Mengniu Dairy, because it had been operating without wastewater processing facilities and discharging waste into the Yellow River.

Ventures that are fully or partly owned by foreigners have also been caught in the inspections. This month, Unilever China, which makes soap, shampoo and other cleaners, was fined and ordered to reduce production because of excessive discharges.

In Wuxi, in the Yangtze River delta about 80 miles from Shanghai, city officials said it was too early to quantify the economic impact of the factory closings. But Li Yuanchao, the governor of Jiangsu province, where Wuxi is, has said, "We are paying back to nature -- even if our GDP decreases by 15 percent."

Liu Yamin, chief of Wuxi's Environmental Protection Bureau, acknowledged that as the city transforms itself from dependence on industry to a focus on high-tech research, there will be growing pains.

"The blue-green algae gave us a warning, a shock, but we Chinese have a saying that a bad thing can be turned into a good thing," Liu said. "So all Wuxi people feel they should turn the bad thing into a good thing and improve environmental protection."

Businesses say that the environmental measures are good in theory but that they worry about unemployment and whether the laws are being applied fairly.

Wuxi Dongtai Fine Chemical Industry was fined $13,000 and ordered to stop making one of its products for failing to meet environmental standards. The city said Dongtai leaked chemicals into a river that flows into Tai Lake.

Feng Jing, Dongtai's office manger, said the incident was minor, caused by small cracks in its piping system, but that the punishment was severe. As a result, the company laid off 50 of its 600 workers. She said worse offenders are still operating.

"As a civilian, I cannot say that current measures taken by the government are wrong . . . but the government really has gone a little too far," Feng said.

Yu Senming, 43, and his wife, Li Yanyu, 45, run a restaurant in Wuxi that depends on business from chemical-factory workers. They say business is down 50 percent since the pollution crackdown.

"Many people -- not just the workers -- depend on those factories for their living," Li said. "If they are all shut down, we will have many social problems."

Wuxi was one of the regions targeted under Deng Xiaoping's "opening up and reform" industrialization push in 1978. The area, once known as the "land of fish and rice," was transformed into the heart of China's chemical industry. Its economy ballooned from 2.5 billion yuan in 1978 to 330 billion yuan (about $44 billion) in 2006 -- bigger than that of Ecuador or Luxembourg.

Now China's sixth-largest industrial city, Wuxi produces chemicals sold to the United States and other countries. It has a downtown of closely packed, dusty high-rises and is surrounded by idyllic countryside dotted with gargantuan factories spewing black smoke. Half the population is employed by the 5,300 factories with annual sales of at least $650,000 each.

As Wuxi's economy grew, so did the pollution in Tai Lake, for centuries one of China's most picturesque lakes.

Yang Guoxin, 79, revered as one of China's first environmental activists, recalled that in the 1940s the water in the lake was so clear that he could see every detail of his toes when he waded in.

"There were many small lake creatures, like oysters and shrimp. Today, I can hardly see one," Yang said.

As early as the 1990s, Wu Lihong, 39, a former sales manager for a factory, warned officials that the city was headed toward ecological disaster if it didn't shut down polluting factories. His wife, Xu Jiehua, 39, said he was put in jail for saying such a thing.

"He offended the local government and some polluting companies by publicizing the problems," Xu said in a telephone interview. She said Wu, an activist supported by U.S. environmental and human rights groups, was called in to speak with government officials and told he was "creating a negative effect on the economy."

Police officials said Wu is serving a three-year sentence on a fraud and blackmail conviction unrelated to his environmental work.

By 2003, it was clear the lake was sick, and the government banned fishing there. Zhou Xiaoming, 42, a third-generation fisherman, now rents boats on Tai Lake. Because of the pollution, "people like us fisherman have lost our profession," Zhou said.

Wang Guoxiang, director of the Research Center for Eco-Environmental Sciences at Nanjing Normal University in Jiangsu province, said government engineers tried every scientific alternative possible, spending more than $1.3 billion to try to save the lake. They dug up the silt and replaced it. They poured fresh water into the lake and redirected rivers to try to wash the pollution away. They even seeded clouds to create rain to dilute the polluted water.

But it took a crisis to force the government to start closing companies.

In late May, the algae in the lake grew so fast that taps all over the city spewed dirty water. While most algae are harmless, the chemical runoff from factories had fattened the algae in Tai Lake into a toxic muck poisonous to humans and aquatic life. According to residents interviewed later, consumers panicked, and the price of large bottles of water jumped from $1 a bottle to $6. People couldn't clean dishes, couldn't wash their clothes, couldn't shower.

Gong Pin, deputy director of the Wuxi Economic and Trade Commission, said that the first stage of the factory closings targeted small chemical companies but was only the beginning. "Our aim is to call attention and supervision from the society," Gong said.

The government also will require companies to move from populated urban areas to special industrial zones at their own expense, he said.

Wuxi's environmental campaign has been held up as an example of how cities should deal with polluters. But the publicity has not had its desired affect. Instead of shunning the polluting companies in Wuxi, delegations from other parts of China have been coming to Wuxi to invite them to come to their cities.

"This is impossible to understand," said Wang of Nanjing Normal University. "We keep telling them they are just moving pollution around and it isn't good for them, good for China."

Researcher Wu Meng contributed to this report.

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