Three Gorges Probe

Dearth of industry in the reservoir region

New Beijing Daily (Xin jing bao)
April 29, 2004

Many aging factories in the Three Gorges reservoir area are being shut down because they are so polluting. The closures entail heavy job losses, and a shortage of employment alternatives is fast becoming a widespread problem.

A gas leak that caused an explosion earlier this month at a
chemical plant in Chongqing killed nine people, forced 150,000 to flee
the area and highlighted the dangerous conditions that prevail in many
outmoded factories in the Three Gorges reservoir area. It was the third
leak of deadly chlorine gas at the Tianyuan Chemical Industry Plant
since last year, Xinhua reported. And yet this factory was actually one
of those slated to be relocated and reopened on higher ground as part
of the Three Gorges resettlement operation. Many other aging industrial
enterprises on the banks of the reservoir are being shut down once and
for all because they are so polluting. As a recent article in the New
Beijing Daily (Xin jing bao) makes clear, the factory closures entail
heavy job losses, and a shortage of employment alternatives is fast
becoming a widespread problem in the reservoir region. (KH)

From New Beijing Daily (Xin jing bao), April 20, 2004:

With the reservoir filled to 139 metres and the first batch of
turbines now in operation, the Three Gorges project has begun to reap
benefits. The injection of the huge sums earmarked for the resettlement
operation has led to many positive changes along the 660-kilometre
reservoir, from Yichang in Hubei province to Xianfeng in Chongqing

At the same time, problems with industrial development, job creation
and peasant livelihoods have emerged in the reservoir area. New houses
are everywhere, but factories are few and far between. Roads and
bridges crisscross the area, but assembly lines are lacking. The
"dearth of industry" has become a burning topic of conversation
throughout the region.

Fengjie party boss Liu Benrong said: "With the filling of the
reservoir and resettlement of local residents, the number of factories
declined rapidly from the previous 243 to the current 35 in Fengjie
county alone. The ‘dearth of industry’ is becoming ever more apparent
and more serious."


Too much time for mahjong as unemployment soar

With most factories now shut down in Fengjie, annual industrial output
dropped steeply, from 270 million yuan (US$33 million) in the late
1990s to 151 million yuan (US$18 million) last year. Closing the
factories has meant substantial job losses. In the late 1990s,
Fengjie’s 243 factories employed as many as 20,000 people, but only
8,000 residents have jobs at the relocated enterprises, Liu said.

Fengjie is not an isolated case. Only 27 of the 101 factories in
Zhongxian county, 220 kilometres farther upstream, are being relocated.
Zhongxian county governor Du Heping said: "The factories being lost to
the reservoir are like our family property, accumulated over the past
50 years, and they represent a big sacrifice by Zhongxian’s 970,000
people on behalf of the Three Gorges project."

With so many factories now closed, tax revenues are also down
sharply, slumping in Zhongxian from an annual average of 30 million
yuan (US$3.6 million) to 10 million yuan (US$1.2 million) now. More
than 10,000 people are out of work in the county seat alone, which has
a population of less than 100,000, Du said.

Governor Du, of course, is particularly concerned about unemployment
in Zhongxian, but the problem is widespread: Of 1,397 factories in
Chongqing municipality, 1,008 are to be shut down and only 389
relocated and rebuilt, according to Chongqing resettlement bureau
statistics. In the Hubei section of the reservoir area, only 17 of 232
factories will be moved and reopened.

Another major concern is the decline in financial flows from the
government. "Zhongxian county received only 130 million yuan (US$16
million) in resettlement funds in 2003, less than one-third the amount
received in a year when the funding was at its peak," Du said.

A nationwide campaign to attract industry to the Three Gorges area
has met with little success. Apart from the Hangzhou-based Wahaha
Group, which has set up a successful soft-drink plant in the reservoir
area, few companies have been tempted to move into the region. One
county that had hoped to attract a porcelain-manufacturing enterprise,
for example, saw the plan fall through because of a local shortage of
pottery clay, and of management and technical personnel.

"It’s hard to get big or successful companies from other places to
invest in the reservoir region because of a weak industrial base and
poor transport," Governor Du said. "In addition to those constraints,
the biggest challenge for Zhongxian is a severe shortage of management
and technical expertise. It’s no wonder that many good companies are
reluctant to come here."

Liao, a Wuzhou fertilizer-plant worker who was fishing on the banks
of the Yangtze, said: "I’m just killing time here fishing because of
the terrible situation at my factory. The government’s water-pollution
rules are so tough that almost all the big factories in Wuzhou have
been shut down. The water seems clearer than ever now, but so many
people here are out of work as a result.

A government worker also expressed concern about the economic and
social problems in the reservoir area that have accompanied the factory
closures. "What can the jobless do? Sell trinkets on the street? Kill
time playing mahjong?" he said.

A senior analyst based in Chongqing said: "Local governments must
bear some responsibility for these problems. The governments in the
reservoir area attached more importance to constructing beautiful
buildings than to laying a solid foundation for the development of core

"At the start of the Three Gorges project, policy-makers proposed
‘moving the affected people out, resettling them properly, and helping
them to get rich gradually’ ‚Äì which was definitely a good plan. But
unfortunately, actual practice does not appear to have gone in that
direction," he said.

"Ultimately, though, the project decision-makers also cannot
distance themselves from the current problems, because they lacked an
overall vision of the industrial reconstruction and future development
of the reservoir area."


Translated by Three Gorges Probe (Chinese) editor Mu Lan


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