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Stimulus programs fuel green concerns

By Lan Lan  (China Daily)

08:07, September 25, 2012

Local government growth programs are causing increasing concern over their environmental impact, officials from central government agencies warned.

In a bid to boost GDP, provincial and municipal governments have recently rolled out at least 17 trillion yuan ($2.7 trillion) in stimulus programs, including giving the green light to environmentally damaging operations, economists warned.

Li Zuojun, an economist at the Institute of Resources and Environmental Policies with the State Council Development Research Center, said he was worried that achievements in energy saving and emission cuts in the more developed eastern provinces may be overshadowed by the building of heavily polluting industries in inland areas.

Those stimulus programs could bring about "a new wave of expansion" in the kind of industries that China does not really want and would pay a dear price for in the future, said an official from the National Development and Reform Commission, who wished not to be named.

From an environmental perspective, capital investment on such a massive scale may further strain the already fragile ecological conditions in central and western areas, the NDRC official said. Those areas, rich in resources but poor in environmental protection, are often destinations for industrial relocation plans from the more developed cities along the eastern coast.

The official said he believes some government guidance is necessary in all capital investment programs.

In the first eight months of the year, China actually did "a relatively good job" in environmental protection, the official said, summing up the data he collected.

The environmental cause benefited from the economy's slowdown since the beginning of the year, he noted, as production in steel, cement and non-ferrous metals have either been placed under strict quotas or closed entirely as a result of falling demand.

August used to be a peak time for electricity use, but this year only saw an increase of 3.6 percent year-on-year in August, down from an increase of 4.5 percent in July, according to the National Energy Administration.

The Ningxia Hui autonomous region and Yulin city in Shaanxi province recently offered preferential electricity prices to energy-guzzling industries, according to media reports.

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