A day later, the Ministry of Land and Resources issued a circular requiring local land and resource administrations to devise plans for land use for 2009 and 2010. The circular says local land administrations must give priority to and guarantee the usage of land for the new Central Government-investment projects, while strictly abiding by the annual national scheme for land use. It also says they should not give the green light to highly-polluting and high energy-consuming projects or low-level redundant development or industries with excessive production capacity.

The Ministry of Finance is trying to restrain such projects on the taxation front even before they get underway. It adopted a temporary, comparatively low tax rate on imports of more than 670 commodities, including coal, fuel oil, stone and other energy or resource products as of January 1. It also continues to impose a temporary tax rate on exports of products such as coke, crude oil, metal ore, alloy iron and steel billet to effectively curb exports of high-pollution and high energy-consuming products.

No more pollution

Every construction project is required to submit a report detailing its possible impact on the environment and receive approval from environment protection authorities before construction can begin; otherwise, the project will be cancelled.

The Ministry of Environment Protection (MEP) has shortened the amount of time it takes to review each report from 60 days to 10 days so that investments under the stimulus package can begin as soon as possible. However, some local environment administrations have relaxed their investigation and examination of new projects and have allowed ones that previously had failed to win approval to be revived in the name of "boosting investment to spur domestic demand."

As a warning against this trend, the MEP released a circular on December 8 that prohibits all local environment watchdogs from giving a green light to highly polluting projects when they speed up the review and approval of all environmental impact reports. The notice requires local environment watchdogs to keep a close eye on high-pollution and high energy-consumption projects while shortening the time they spend on projects that conform with the economic stimulus framework and meet environment protection thresholds.

Zhou Shengxian, Minister of the MEP, said on December 11 that his ministry would reject projects under four circumstances. These include projects to be eliminated and prohibited by the state or those that contradict relevant industrial policies; projects that generate severe pollution or low-quality products, consume large quantities of energy, materials and water and cannot meet national emission standards; projects whose environmental quality standards do not meet the requirements for a special function, such as the construction of a nuclear power plant; and projects that are located in the core regions or buffer zones of nature reserves.

"We cannot afford to boost economic growth at the cost of environment," Zhou said.

Ou Hong, Deputy Director of the Investment Department at the NDRC, told Beijing Review that the 100 billion yuan ($14.64 billion) would be chiefly invested in welfare housing projects, rural livelihood projects, major infrastructure projects such as railway and highway construction, social welfare projects such as medical and health care, and education, independent innovation and industrial restructuring. When determining how the funds would be allocated, the NDRC considered no competitive projects that would expand the existing production capacity of the industrial sector or any highly polluting or high energy-consuming projects, he said.

"In this way, we will be able to eliminate from the root the construction of such projects," Ou said.

Last year, the government investigated more than 700,000 companies and identified 15,000 that had violated national environmental regulations, Ou said.

Wu Xiaoqing, Vice Minister of the MEP, said at a recent press conference that China was aware of the increasing impact of pollution on its future economic growth. Enormous pressure has been put on the environment during the past several years with the country's economy growing at double-digit rates and the speedup of urbanization. Unaware of the importance of environment protection to sustainable development, some local governments in particular have offered to lower their environment protection requirements and pollution emission standards to attract businesses and investments. This has resulted in the grim ecological and environmental reality in China, costing about 13 percent of the country's GDP annually, Wu said.