Polluted Prosperity In China

Shui Tou calls itself the leather capital of the world with dozens of small factories processing pig skins, but CBS News Asia correspondent Barry Petersen reports the city also shows the high price China is paying for its economic success.

It is one of the most polluted cities in China. Chemicals used in tanning and curing leather run down the gutters and seep into the ground water.

It's a story embarrassed Chinese officials do not want shown to the world. As Petersen visited a small village outside Shui Tou, police rushed to the area and demanded his crew stop filming. But a hidden camera on hand captured the scene.

"I think you should consider that if you stay here, the result will not be very good," one official warned Petersen and his crew.

But the villagers wanted them to know what was wrong. Some of them argued with police long enough for others to sneak the crew to the village well.

"The water down to 50 yards deep is contaminated by the nearby factories," the village chief said, through translation.

When Petersen asked what health effects the polluted water is having on the villagers, the village chief responded, "They get cancer, and little children get fevers - there are many chemicals in the water."

Those are allegations the Chinese do not want heard. The rules in China say reporters must apply for official permission before traveling to places like this, which Peterson and his crew did not. They were told to go home and ask to come back, the official way.

"If you get approval, then you do interview or film the topic you mentioned," said one official.

It comes as no surprise that when Petersen offered to do it their way - when he asked for permission to go back and offered to interview local officials about the town's fight to end pollution - he got back a rather blunt answer: No.

China knows it has problems. A report by its own government says half of China's top 500 cities have air pollution that doesn't even meet Chinese standards.

That report doesn't surprise Elizabeth Economy, author of the "The River Runs Black." According to her book, 190 million Chinese drink contaminated water that makes them sick. Air pollution is so bad in some cities, that just by breathing, children suffer the same ill effects as smoking two packs of cigarettes a day.

What will the impact be on China if it doesn't get its pollution problem under control?

"We've already begun to see that the environment is biting back into economic development in China. Essentially, for the past 20 to 25 years, China has polluted its way to prosperity," Economy said.

It's a prosperity that even the local government knows is at risk. A sign in the village reads: "Either Shui Tou kills pollution, or pollution will kill Shui Tou."

It's pollution that people believe is not just hurting them, but putting at risk those most vulnerable - their children.