China's Cancer-Causing Factories

Deng Dingfu is living out his final days wracked with the pain of lung cancer - lung cancer blamed on toxic pollution, reports CBS News Correspondent Celia Hatton.

"My doctor asked me if I live near a chemical plant," he said.

In fact, he lives very close to one. The Red Butterfly Chemical Factory lies right in the heart of central China's Yong Xi village. Since 2002, the plant has processed strontium carbonate, a powerful substance used in color TV screens.

Dozens of people describe how the factory's waste is making them sick. Many say they've developed painful rashes from the village water.

Several people have been arrested for speaking out. But locals showed no fear when a plainclothes police officer confronted a CBS news crew. The angry crowd eventually drove him away.

Environmental activist Xiang Chun says cancer, not the police, is the biggest threat here.

"Before, cancerous illnesses were rare in this area. But now they're common," he said.

Common and growing - a government study never made public looked at 1,000 people living near the factory and found 40 to 50 cancer cases in 2007. Village doctors estimate that number may be as high as 70 now.

CBS News contacted Red Butterfly for its side of the story. In a faxed statement they said "they've spent $13 million in environmental monitors and waste control over the last ten years."

But the family of a 14-year-old with leukemia says that's all smoke and mirrors - arguing the company simply reduces factory emissions when inspectors visit.

Red Butterfly has already been forced to close one regional factory. But lingering pollution there leads to ongoing complaints of blurry vision, liver problems, and lung congestion.

Locals say the water in the rivers all along the village was clear before the factory opened, allowing them to live off the land. That's a distant memory. During the global economic downturn, the factory will undoubtedly stay open.

"It's highly unlikely that cracking down on industrial polluters is going to be a top priority to Beijing," said Elizabeth Economy of the Council on Foreign Relations.

Villagers say the area's wealthiest people have already moved away - leaving the most vulnerable to deal with the toxic downside of China's industrial rise.