Factories producing potentially dangerous chemicals or explosives will face closure if they don't obtain new work safety licenses. 

Plants in Guangdong Province will be ordered to shut down completely or suspend operations if they don't obtain the work safety licenses by Friday.

Under a new scheme introduced by the State Administration of Work Safety all factories nationwide producing chemicals or explosives must submit work safety reform plans to their local government and apply for renewed licenses by the end of this week.

According to statistics from the provincial government 2,042 factories have handed in programs and applied for these licenses with 840 of them being approved as of June 19.

"We expect about 1,100 factories will obtain these licenses," Su Xiaojun, vice-director at the policy-making office of Guangdong Provincial Administration of Work Safety, told China Daily yesterday.

According to the new regulations factories with a high risk of accidents must be at least 25 meters from residential buildings. For low risk factories the distance is 10 meters.

Some factory owners complain that more and more homes have been built close to their factories over the past decade.

"When we built the factory at the beginning of 1990s the site was isolated," said a factory owner surnamed Yin in Dongguan, an industrial city in the province.

He said that moving the factory to a more remote location would cost a lot of money and hoped the government would be able to provide some financial assistance.

Since some factories were Hong Kong-invested their officials and the entrepreneurs involved had asked Guangdong authorities to postpone the deadline for six months to give them more time to deal with the new policy, said Kwo Tsen-hwa, director of the Federation of Hong Kong Industry.

"The national policy is not directed against Hong Kong factories," said Su Xiaojun. "And the deadline will not be extended because the government has demanded strict enforcement."

Su said the government had already pushed back the deadline from December last year to June.

The Hong Kong-based Wen Wei Po newspaper said more than 100 Hong Kong-invested factories may fail to meet the new rules and close down.

Su said some cities had declared they would like there to be relocation sites for the affected factories and may provide them with favorable investment policies.

The cities include Shaoguan and Qingyuan in northern Guangdong and Huizhou, Zhongshan and Zhuhai in the Pearl River Delta.

The central government will decide what compensation to provide for the relocation and upgrading of factories, said Su.

More than 16,000 people were evacuated after a chemical blaze in a warehouse in Guangzhou in May.

The incident forced the local administration of work safety to enact a new policy ordering all chemical factories and warehouses to move out of Guangzhou's downtown before 2009.

(China Daily June 27, 2006)