China's leader vows to close dirtiest industries

updated 8:25 a.m. ET March 5, 2007

BEIJING - China will close its dirtiest steel mills as it steps up efforts to rein in surging energy use and clean up environmental damage caused by its economic boom, Premier Wen Jiabao said Monday.

The government also will try to clean up polluted rivers and develop more energy-efficient technology, Wen said in a speech at the opening of the annual session of China's legislature.

"We will take strong measures to save energy, lower energy consumption, protect the environment" and use limited farmland more effectively, the premier said.

Last month, Beijing's biggest steel mill announced it would cut production at its aging plant near the capital before the 2008 Olympics and then move away from the capital by 2010.

Communist leaders have promised repeatedly to clean up China's badly polluted environment, though they warn they are constrained by a need to promote economic growth and lack of technology.

The government also wants urgently to reduce reliance on imported oil, which it sees as a strategic weakness. China consumes several times as much energy per unit of economic output as the United States, Japan or other major economies.

Wen acknowledged Sunday that China failed to meet its conservation targets last year.

On Monday, he promised to "resolutely close down" its oldest, dirtiest steel mills, power plants and facilities in the cement, aluminum and coke industries.

Conservation goals with new projects
Proposed new industrial projects will be approved only if they meet conservation goals and the government will set efficiency standards for public buildings, Wen said.

The premier, China's top economic official, said Beijing would spend more to build sewage treatment plants but gave no total budget figure for conservation.

China is one of the world's leading producers of greenhouse gas emissions, but the government said last month that economic growth would take priority over reducing them. It said China lacks the technology to achieve significant reductions.

Shutting older factories or power plants could wipe out jobs in poor areas where the government worries about unrest among the unemployed.

The Finance Ministry, in its outline of the 2007 budget, said the government was pushing ahead with pilot projects to allow industries to trade pollution credits and to compensate areas fouled by the use of coal.

Tax and other fiscal incentives are also being tinkered with to encourage recycling, energy conservation and the development of renewable energy resources, the Finance Ministry said.

Change of attitude?
"We must realize, and the government has already realized this, that the quality of our GDP is poor, meaning that our energy consumption is high and we are not protecting the environment," said Lan Xinguo, a legislator from the southwestern province of Sichuan. "But China is a great and responsible nation so we are heading towards a more responsible attitude towards development."

But another legislator cautioned that poor areas still rely heavily on coal.

"If we are very strict in enforcing our environmental protection targets, then some of these factories will have to shut down, and what will that mean for these poor places?" said Lu Dong, a delegate from the coal-mining northern province of Shaanxi. "This is very hard, we face a dilemma and we have to handle it correctly."

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