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Xining Special Steel Company

Province battles dual nightmares: black skies, 1m below poverty line

Shi Jiangtao – Updated on Jun 22, 2008

In the suburbs of Xining , the provincial capital and largest city of Qinghai , smokestacks at a large industrial plant spew billows of black, white and red smoke and steam into the city’s grey sky.

The chimneys belong to Xining Special Steel Company, the largest producer of stainless steel and structural iron in northwestern China and employer of 9,000 workers. Listed in Shanghai and one of Qinghai’s biggest taxpayers, the steel plant is the pride of the financially distressed local government.

The factory just a few kilometres upwind of the city centre makes no effort to curb or clean its emissions.

Local residents say they have suffered under thick, dirty fallout from the factory for decades.

“It is a nightmare to live near the factory,” said a resident whose husband works at the steel plant. “We used to see clear blue skies every day, but what else can we say? China is `the world’s factory’ now.”

Amid growing public anger, authorities have promised again this year to crack down on industrial pollution, which has shown signs of worsening in recent years.

The factory has been named and shamed repeatedly by local environmental authorities over the years, but that has not stopped it reappearing on the provincial green watchdog’s list of top industrial polluters.

Bai Ma , chairman of the Qinghai provincial committee of the Chinese People’s Political Consultative Conference, admitted that the plant has had serious pollution problems for years due to old equipment.

“Pollution is a serious problem with old equipment and the factory is trying to replace it or upgrade its steel-production technology,” he said. “But it needs a lot of money, which makes the cleanup effort difficult to proceed with smoothly.”

Most of Qinghai’s economic indicators show that its gross domestic product is among the smallest on the mainland.

“Qinghai’s GDP for 2006 was just 64.1 billion yuan [HK$72.84 billion], which was hardly comparable to eastern provinces,” said party chief Qiang Wei .

“Our local fiscal revenue in 2006 was 4.2 billion yuan, smaller than that of a district or a county in Beijing.”

The socio-economic disparities among the different regions in Qinghai are widening, according to official statistics.

Nearly 68 per cent of the provincial population, or 3.7 million people, are crowded into Xining and its eastern suburb Haidong prefecture, which is only 3 per cent of the total area. They absorbed 58 per cent of the provincial economic output.

About 20 per cent of the province’s total population, or 1.04 million people, live below the official poverty line, mostly in rural and mountain areas, with more than 60 per cent concentrated in the source regions of the Yangtze, Yellow and Lancang (Mekong) rivers.

Eliminating poverty remained the biggest challenge for the province, Mr Qiang said.

Provincial leaders insist that Qinghai has witnessed some extraordinary changes, with annual GDP registering double-digit growth for the past consecutive six years thanks to Beijing’s western-development policies.

But the province lags ever farther behind affluent coastal regions.

Guangzhou’s GDP for 2006 was 10 times that of Qinghai.

Despite the province’s 12 per cent rise in GDP last year, research by the Chinese Academy of Social Sciences last year found that the province’s overall economic competitiveness had slipped.

But that could be the price Qinghai must pay while it tries to lift hundreds of thousands of people out of poverty and conserve the already fragile Tibetan Plateau, according to Mr Bai.

“Our government has made environmental conservation a prerequisite for economic development,” he said.

A total of 7.5 billon yuan has been invested in the river-source regions to relocate more than 40,000 Tibetan nomads in Guoluo, Huangnan and Yushu counties and reverse the degradation there.

The three areas have also been exempted from mandatory goals of economic growth since 2006.

“The top priority for the … regions is environmental conservation, which is crucial for sustainable development of the province as well as the whole Tibetan region,” said Governor Song Xiuyan .

Qinghai recently launched another ambitious campaign to clean up Qinghai Lake on the eastern edge of the vast Tibetan Plateau and an important wildlife refuge.

Ecological degradation in the province, experts warn, will affect the entire northwestern and Himalayan regions and pose grave threats to the upper reaches of the Yellow River.

Mr Bai said he was optimistic about the future of the province, which is rich in natural resources, including hydropower resources, Tibetan herbs, numerous saltwater lakes and the country’s largest potassium fertiliser production base.

He said the province attached great value to expanding schools and vocational education, and luring talent from around the country.

He made an appeal to Hong Kong to invest in the province. “Qinghai is a resource-abundant province that has yet to be fully explored.

“There is plenty of room for Hong Kong’s advantage in investment, talent and technology to play a bigger role in our future development.”

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