Page last updated at 23:02 GMT, Tuesday, 18 September 2007 00:02 UK

Can China make the polluter pay?

By Juliana Liu
Business reporter, BBC News, Yixing

A drive around Yixing, a town in the wealthy province of Jiangsu, explains why China has such a phenomenal economic growth rate and why its environmental problems are so severe.

Wu Lihong by a polluted and blackened canal outside a factory in Yixing, 16 March 2006
Wu Lihong's fight against pollution in Yixing earned him a jail sentence

Many Chinese would love to be from Yixing - a prosperous town surrounded by lush countryside and a network of rivers.

A booming economy means locals can find well-paying jobs right at home, instead of moving thousands of miles away from friends and family.

With a population of only one million, small by Chinese standards, the town has more than 1,000 factories producing textiles and chemicals.

The success of private businesses like the ones in Yixing has helped China's economy quadruple in just two decades.

But there's a price to pay for prosperity. The smell of acrid chemicals fills the air.

The rivers, the lifeblood of the economy, have become a dumping ground. Most of Yixing's factories are located directly on the water, where it is easy to transport raw materials and dispose of waste.

Untreated pollution

Experts say the economics of the situation are clear.

"The maximum fine for polluting is only one million yuan, or about $130,000," says Chen Gang, a fellow at the National University of Singapore, and a native of Nanjing, only two hours' drive from Yixing.

"Compare that to the tens of millions of yuan you need to build a waste treatment plant, and you can see the fine is a trifle."

Dead fish next to blue-green algae on Lake Tai, May 2007
The algae on Lake Tai killed fish and polluted tap water

Experts say nearly all Yixing's industrial waste is released untreated. The rivers feed into Lake Tai, China's third-largest freshwater lake.

The lake, which is more than three times the size of Singapore, is squeezed between two provinces and ringed by tens of thousands of factories.

Lake Tai is so polluted that blue-green algae bloomed this summer, as they do every year. But this time the algae were so bad that residents of Wuxi, an industrial city located on the lake, were forced to go without tap water.

Wu Lihong, a farmer turned environmental campaigner, has dedicated his life to saving Lake Tai. The 39-year-old is perhaps Yixing's most famous son.

Mr Wu made headlines in 2005 when he spoke out against the polluters. Once a national hero, Mr Wu is now in jail, waiting to serve a three-year sentence.

He was arrested at home in April and convicted of blackmailing factory owners. His real crime, supporters say, was to blow the whistle on them.

'Stubborn' fighter

Now his wife is continuing his work. Xu Jiehua, also 39, is under 24-hour police surveillance.

She has four guards, sent by the Yixing police station, working three shifts a day. Their job is to watch her every move.

Xu Jiehua, wife of Wu Lihong, with three carved monkeys
Ms Xu regrets that her husband did not imitate the three monkeys

Showing a reporter around her two-storey home, Ms Xu picks up a souvenir of three monkeys. One has hands over his eyes, another his ears, and the last his hands firmly in front of his mouth.

"I got this for my husband on his birthday. I told him I wish he were like these monkeys: see no evil, hear no evil, and speak no evil," she said. "But he's very stubborn."

Ms Xu is appealing against his conviction, but she concedes that Mr Wu will most likely be serving his full three years. Still, she believes they have won a victory.

China's top leaders have promised to address the problem of water pollution. Their allies on the provincial level seem to be falling into line.

Li Yuanchao, the top Communist Party official in Jiangsu province, has promised to sacrifice economic growth to clean up Lake Tai. He vowed to close 2,000 polluting chemical factories by the end of 2008.

But many experts are sceptical, saying factory owners hold huge power over their communities, and that enforcement is difficult when local officials have so much to gain from economic growth.

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