Monday, February 12, 2007

Polluters vrs Olympics: This town ain't big enough for the both of us

News that Beijing's largest polluter has packed its bags and is moving on out leaving an inevitable trail of job losses, broken dreams and cleaner air for the world athletes to breath in 2008.

Whilst positive for many you cannot help but marvel at events that would be most unlikely to happen in a functioning democracy. Imagine how this would be fought tooth and nail by different lobby groups of different kinds in the West.

This is almost an economics free story except for the high costs paid by the previous employees of the steel mill. They must rue the day that China won the rights to hold to Olympic games. The good public relations price is often a high one.

End of Era as Beijing Polluter Leaves Town

BEIJING - Beijing's worst polluter, the Shougang Iron and Steel Group, is packing up and leaving Beijing to help clear the air for the Olympic Games in 2008.

The city has pledged to clean up its polluted air and restore its once-legendary blue skies in time for the games, China's coming-out party to the world. It is spending billions to clear plants like Shougang's from the capital. But the departure of Beijing's greatest industrial icon is also the end of an era, and the human toll may rival the financial cost.

Only about 10,000 of Shougang's 82,500 workers will be employed at new plants. Many of the others face early retirement, and most haven't been told where they will be placed.

China's state-owned heavy industries provided housing and clinics for workers, schools for their children, and pensions for retirees. Most even had a company newspaper.

Now, the cradle-to-grave system known as the iron rice bowl is being dismantled.

"At first it was hard to accept, but now people have gotten used to the idea," said Yue Wenhui, plant manager at a furnace that will shut later this year. He does not yet know if he will have work at one the new facilities.

"It's up to the leaders to decide how we are arranged. Of course, I am pretty eager to be sent to Caofeidian because it will give me a chance to work with the newest stuff."

Shougang is building a new, state of the art plant at Caofeidian on the nearby coast, and has already begun operations at another campus in neighbouring Hebei Province.

White collar workers will mostly stay in Beijing, while blue collar workers will shuttle out to work for several days at a time at the new plants.

Their families will stay in Beijing, where schools and jobs are better and where retirees can chat in the sun with coworkers they've known for a lifetime.


Shougang is China's sixth-largest steelmaker, and its vast campus to the west of China's capital belch thick smoke and a evil smell.

China's cities are cloaked in pollution so heavy it whites out the sky and dims the sun. Its rivers have long stretches of dead water, and millions of Chinese suffer from lung diseases, birth defects and other effects of a poisonous environment.
Planners are toying with the idea of shutting all factories near Beijing for two months before and during the Olympics, to ensure the city shines. Shougang will have shuttered most, but not all, of its Beijing facilities by 2008.

Shougang has already closed some of its worst-polluting plants -- including the hulking blast furnace No. 5, which was built in 1959 at the height of China's Great Leap Forward, when Chairman Mao mobilized his country to industrialize as fast as possible. It roared continuously until mid 2005.


In moving to new locations, Shougang will also upgrade its plants to be more energy efficient, use less water and emit less pollution. At the same time, it will produce more higher grade steel and less of the cheap construction steel that has glutted China's market.

Shougang will spend 60 billion yuan on the Caofeidian portion of its move alone. It will get a tax holiday during the transfer.

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