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November 14, 2009

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Approval not given for 47 projects

China has not approved 47 industrial projects involving 200 billion yuan (US$29.2 billion) so far this year in a bid to enhance environment protection and curb overcapacity, senior officials said yesterday.

The majority of the projects which were turned down were in the steel, chemical engineering, petrochemical, non-ferrous metals and electricity power generation sectors, Zhu Xingxiang, director of environment evaluation department at the Ministry of Environmental Protection, said in Beijing.

The government has stressed environment protection as a key element to sustain economic development, and investments will be channeled to more "green" industries and those with growth potential, Zhu said.

"The steel industry is the focus of our supervision. There is too much capacity being built without government approval," Zhu said, according to Xinhua. "We will also tighten approval for hydropower projects as they threaten the local environment."

China's steel industry has suffered from increasing overcapacity. According to the State Council, the number of new steel projects has grown 20 percent from a year earlier in the first half of this year. At this speed, the output of steel may exceed 700 million tons this year, while the market can only digest 500 million tons.

In September China ordered excessive production capacity in sectors including steel, cement, aluminum and polysilicon be curbed. It also banned new projects in certain industries, made it more difficult for such investments to get land and raised environment standards.

The Ministry of Land and Resources has rejected almost half of the 431 applications made this year for land usage, including requests from the steel, cement and glass sectors, Dong Zuoji, director of land planning at the ministry, said.

The government plans to help factories closed down because of stricter environment standards, such as offering compensation for workers who lose their jobs.


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