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China Focus: China in "three tough battles" for a moderately prosperous society

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E-mail Xinhua, December 12, 2018

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SHIJIAZHUANG, Dec. 12 (Xinhua) -- China is fighting "three tough battles" against risk, poverty and pollution in order to deliver a moderately prosperous society by 2020, a goal that was enshrined at the 18th National Congress of the Communist Party of China six years ago.

As the deadline approaches, the Chinese government has ratcheted up its drive to curb debt risk, pollution and poverty at a time when the long-term growth of the world's second-largest economy slows.

REDUCING POVERTY

For Liu Junliang, Party secretary of Longquanguan Town in Fuping County, 235 kilometers away from Beijing, how to reduce poverty and lead the locals to a better life is the top priority.

When Liu first came to the town seven years ago, more than 60 percent of its 8,000 rural population were living under the national poverty line -- defined as per capita annual income lower than 2,300 yuan (about 335 U.S. dollars).

With huge government funding into road construction, house renovation and resettlement as well as the introduction of industries, the poverty ratio has been reduced to 0.7 percent.

"We introduced planting of apples and mushroom as well as a sachet factory," said Liu.

Zhang Yanjun, 38, returned to his hometown village of Heilingou in 2016 after more than 22 years of migrant life as a barber in Beijing and Hebei's Baoding.

"With better roads, house and education, it is time for me to come back," said Zhang, who rented a mushroom farm with low-interest loans that could make some 35,000 yuan in profits this year. Together with 10 cattle he raises, Zhang is able to make almost the same income as working in the city.

Furthermore, he is expected to move to his three-bedroom apartment next year from his dilapidated house due to a resettlement project that involves 27 mountainous villages.

Zhang's case is an epitome of China's efforts in lifting people out of poverty and leading them to a prosperous life.

As of the end of 2017, China had 30.46 million impoverished rural residents, compared with more than 770 million in 1978. In the past five years, over 68 million rural people have been lifted above the poverty line.

In Fuping, there are still more than 12,000 people living under the poverty line, accounting for 6.6 percent of the county's population. Fuping is expected to be removed from the poverty list in 2019.

"Industrial development is key to prosperity and long-term growth in the region," said Huang Wenzhong, who was dispatched to Luotuowan Village by the Hebei provincial development and reform commission to lead local poverty reduction work.

With the 500,000 yuan he raised, Huang set up a collective enterprise in the village in June.

"Every registered villager will enjoy the dividend as we develop tourism, poultry and photovoltaic generation," said Huang.

According to official data released in mid-2017, nearly 1 million officials and cadres like Huang had been sent to impoverished villages.

TACKLING POLLUTION

Unlike Fuping where poverty reduction is the top priority, pollution control is the bottleneck for Wen'an, a county 130 km away from Beijing known for its choking plywood and plastics industries as well as for producing one eight of China's total plywood.

Locals said they never wore white clothes several years ago as the pollution was too heavy.

Yao Yuntao, head of the county government, was given a demerit by the Ministry of Ecology and Environment earlier this year as a number of plastic manufacturers illegally continued production on heavily-polluted days.

"If we had not made any changes, the plywood industry would have soon phased out," Yao told Xinhua.

The county government ordered all plywood manufacturers to replace their coal-fired boilers with gas-fired ones and set up strict standards for dust and VOC (volatile organic compounds) emission as well as hygiene conditions, thus cutting down the number of eligible plywood producers in the county from 2,000 to 245.

At an environmental protection station in Zuogezhuang Town, a big screen shows the real-time boiler operation of each plywood producer.

"When someone does not open the anti-pollution and anti-dust equipment, we receive warnings from a mobile phone App, so we can intervene in time," said Wang Xuewu, deputy head of the county's environment protection bureau.

Although the number of plywood producers has dropped drastically, tax revenue is on the rise.

According to the county taxation bureau, the plywood industry contributed 258 million yuan in taxes in the first 10 months of this year, outperforming the 161 million yuan recorded in the whole of 2017.

"The increase of production capacity of gas-fired boilers, the rising market price due to the descending number of producers and product upgrade contributed to the rise [in taxes]," said Yao, adding that the harsh measures have caused the city's air quality index to rise from the worst to the best among 10 county-level districts in Langfang City, which administers Wen'an.

Wang Guozhi, chairman of Jinqiu Wood Co. Ltd, a major plywood producer, was reluctant at first to hand in the 27 coal-fired boilers but now is ready to embrace transition.

"Wen'an set a good example. The other three plywood production bases in China all followed suit," said Wang, who is planning to transition from plywood manufacturing to interior design and decoration.

Yao said the government is planning to introduce the experience to other industries.

China is in its fifth year of a "war on pollution" aimed at reversing the damage done to the country's environment amid rapid economic growth.

In the coming three years, coal consumption will be cut and more outdated steel and coke capacity be eliminated, according to an action plan against pollution released by the State Council, China's cabinet, in early July.

By 2020, emissions of sulfur dioxide and nitrogen oxide should drop by more than 15 percent compared with 2015 levels, while cities that fail to meet the requirement of PM2.5 density should see their density of PM 2.5, a key indicator of air pollution, fall by more than 18 percent from 2015 levels, the plan said. Cities at prefecture level and above should see their number of good-air days reach 80 percent annually and the percentage of heavily polluted days decrease by more than 25 percent from 2015 levels.

China accomplished all the major tasks of its five-year clean air action plan in 2017, but challenges remain. A large number of cities still need to further improve air quality.

CURBING DEBTS

Fighting poverty and tackling pollution cannot continue without sufficient capital input, but would push up local government debts.

According to a report provided by the Fuping County government in late November, it has invested 920 million yuan in building 54 mushroom and 37 black fungus planting parks as well as another 210 million yuan in constructing a pigeon raising project.

Let alone a number of projects in fruits, vegetables, traditional Chinese medicine herbs planting, 30 pig and chicken farms, and 206 labor-intensive handicraft workshops as well as 23 photovoltaic power stations.

The relocation and resettlement of 53,755 people in the mountainous areas also involve massive investment.

As one of the 832 impoverished county-level regions across China, Fuping's fiscal revenue stood at 514 million yuan in 2017, according to its government work report.

Du Jinli, head of the county government's finance office, declined to tell Xinhua the amount of local government debt. He did, however, say the government is sparing no efforts to prevent financial risks and the outstanding debt is under control.

A number of regulations were introduced last year to rein in financial risks as local government debt and corporate leverage increased.

Authorities have taken an array of measures to reduce the local debt burden, including setting debt ceilings for local governments and piloting a debt-for-bond swap program to exchange higher-cost loans with lower-cost bonds.

China's local government debt level remained stable in October, official data shows.

By the end of October, outstanding local government debts stood at 18.4 trillion yuan, according to the Ministry of Finance.

The figure was up from around 18.3 trillion yuan at the end of September but still below the upper limit of 21 trillion yuan set by the country for this year, data from the MOF shows. Enditem