China To Deny Bank Loans To Polluters

Buildings seen through thick pollution, Beijing, China, June 20, 2007 AP PHOTO

China said Thursday it would bar bank loans to companies that violate environmental rules, an apparent effort to target firms that find it cheaper to pay fines or bribes than help reduce the country's worsening pollution.

The initiative is part of efforts to enforce frequently ignored environmental rules amid increasing concerns about pollution that has left millions without access to clean water and made China's cities some of the world's dirtiest.

The deputy director of China's environmental agency said that companies that did not follow environmental protection regulations would be disqualified from getting loans from any bank or financial institution, the state-run Xinhua News Agency reported.

The report gave no indication how the new policy would be enforced. Regulators already have difficulty enforcing environmental rules because local leaders are reluctant to take steps that might hurt industry or reduce jobs or tax revenues.

Heavily polluting factories frequently bribe officials to look the other way or pay cursory fines, rather than take concrete steps to reduce toxic emissions.

The environmental official, Pan Yue, also said the government will raise sewage fees charged to polluting and energy-intensive companies to pay for better water treatment, Xinhua reported.

The announcement came after the head of the State Environmental Protection Administration said that worsening pollution is increasingly sparking protests among the Chinese public.

The public refuses to accept increasing degradation of the environment, sparking a growing number of "mass incidents," Zhou Shengxian said late Wednesday, according to Xinhua.

Zhou did not give figures or examples, but said the number of petitions his administration received this year is up 8 percent from a year ago, the report said.

A quarter of the length of China's seven main river systems are so toxic that any human contact is harmful, the agency says. Contamination by chemicals is frequent, causing taps to run dry earlier this week in the eastern city Shuyang.

In one of the worst cases, a 2005 spill forced the city of Harbin to cut water to 3.8 million people for five days and strained relations with Russia, into which the poisoned waters flowed.

A Cabinet meeting led by Premier Wen Jiabao on Wednesday approved a draft amendment to the existing water pollution law, calling for more testing, licensing and stiffer penalties, Xinhua reported.

The Financial Times reported Monday that Beijing had persuaded the World Bank to cut findings from a draft of an environmental report that allegedly found that pollution caused about 750,000 premature deaths nationwide annually.

The data cut from the draft showed that air pollution levels in Chinese cities cause 350,000 to 400,000 premature deaths each year, the newspaper said Monday. Another 300,000 people die from exposure to poor air indoors, and more than 60,000 die due to poor quality water, the report said.

Produced with the cooperation of Chinese government ministries over several years, the report found the deaths took place mainly from air pollution in large cities, the Financial Times reported, citing unnamed bank advisers and Chinese officials.

A draft of the report was released at a conference in Beijing in March. The final version will be released as a series of papers, the World Bank statement said without giving details.

Foreign Ministry spokesman Qin Gang denied the newspaper report Thursday.

"The report you mentioned has not concluded yet and has not been released," Qin said at a regular briefing. "There was no issue of the deletion of relevant data requested by China."

A World Bank spokeswoman in Beijing, Li Li, would not say whether China had pressured the bank to omit data. "There are discussions of the findings," Li said by telephone.

A World Bank statement released Tuesday said some subjects such as economic cost calculations were left out of a preliminary version of the report because of "some uncertainties about calculation methods and its application."

The State Environmental Protection Administration did not respond to a faxed request for comment Thursday.

China's business center of Shanghai, meanwhile, was preparing to host one of seven concerts being held worldwide Saturday with the goal of raising awareness about climate change.

China, by some reports the world's largest carbon dioxide emitter, is a "crucial target" of the Live Earth concerts' anti-global warning message, said Khalid Malik, the U.N. representative in Beijing.

The Live Earth concert series — backed by former Vice President Al Gore — is expected to draw a worldwide audience of 2 billion with more than 150 headliners performing in seven cities: Hamburg, Germany; Johannesburg, South Africa; London; New York; Rio de Janeiro, Brazil; Shanghai, China; Sydney, Australia; and Tokyo.

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