China Using Environment Rules To Help Cool Economy

China Using Environment Rules To Help Cool Economy

Reuters News Service

January 27, 2005

Beijing - China has begun using environmental regulations to put the brakes on some projects and help cool its overheating economy, an environmental protection official was quoted as saying on Tuesday. Authorities recently ordered the builders of 30 infrastructure projects, most of them in the power sector, to stop work because they had flouted a law requiring environmental impact assessments.

But as well as ensuring environmental regulations were enforced, the order to stop work was also partly motivated by broad economic considerations, the official said.

"The environment has become a new way, in addition to things like interest rates, to cool down the economy if it is too hot," Hu Tao of the State Environmental Protection Administration was quoted as saying in the China Daily.

China's environment has suffered considerable damage in recent years as economic growth has accelerated. Leaders have been aware of the environmental costs of rapid growth but their main priority has been ensuring a strong economy.

But recently, the government has adopted a raft of measures to cool overheating in the world's seventh largest economy, which statistics on Tuesday showed grew at a sizzling 9.5 percent last year, exceeding forecasts.

The Environmental Protection Administration ordered the 30 infrastructure projects to halt operations because they had not undertaken environmental impact assessments before starting construction, China Daily said.

"Most of the projects, involving billions of US dollars and in 13 provinces and municipalities, are related to electricity generation," the newspaper said.

Among the projects were 23 power stations, including the 12,600-megawatt Xiluodu station on the upper Yangtze River and the 4,200-megawatt underground power station at the Three Gorges Dam, with a total capacity of nearly 32,000 megawatts, the environmental protection office said previously.

The China Daily said work had stopped on 22 of the projects but the builders of eight had defied the order.

Builders of the 22 projects that complied with the order had paid maximum fines of 200,000 yuan ($24,000) each but the other eight had "shown no sign of accepting the administration's punishment", the newspaper said.

"The number of environmental laws in China matches that in other countries, but the enforcement of laws is far from satisfactory," Hu was quoted as saying.

There was no information about what would happen to the eight projects that had defied authorities, or when work on the projects would resume. (US$1=8.276 Yuan)