YANGZHOU, Jiangsu Province: The local government of Yangzhou, a beautiful city in East China's Jiangsu Province, has cancelled 110 petrochemical projects, which had been planned for the next three years, that could severely pollute the city.

"The government is now sparing no effort to attract investment for the city's development," Ji Jiangye, the city's mayor, said at the recent 2004 China Petroleum and Chemical Industry Development Forum.

The event was held in Yangzhou.

"But at the same time, we pay much attention to protecting the environment. Therefore, we are even willing and ready to give up some big investment projects," he said.

Yangzhou Chemical Industry Park is an example.

"Projects that cause pollution to air and water will not be allowed into the park, and the enterprises located in the park are supposed to attach great importance to environmental protection," he said.

"For example, the environmental protection measures Dairen Chemical Co Ltd has taken are even stricter than those required by the local environmental protection bureau.

"Rejecting these polluting projects will not discourage business people from making investments in the city. On the contrary, Yangzhou's full consideration of environmental protection will attract more investors aware of sustainable development."

Chen Shixing, an official of the local economic and trade commission, said that most of the projects cancelled had failed to meet the local environmental protection requirements, or would cause serious pollution.

"It is hard for the local government to make such decisions since the local economy is developing rapidly and in urgent need of considerable investment," Chen said.

One of the largest projects cancelled last August was proposed by an enterprise from Suzhou, another city in the province, with an investment of about 10 million yuan (US$1.21 million), he said.

Meanwhile, the local government has invested heavily in infrastructure for environmental protection.

According to Ji, a huge waste water processing station is being built in the chemical industry park, with a processing capacity of 250,000 tons per day.

Hundreds of thousands of trees have also been planted in and around the park.

Sun Zhijun, party secretary of the city, told China Business Weekly that the local government has just completed the construction of a 1,500-mu (100-hectare) garbage disposal plant in Yangzhou, with an investment of about 80 million yuan (US$9.60 million).

The plant will be able to process 500 tons of garbage per day for the next 20 years. And with waste pipes and a special waterproof layer in the bottom, all the sewage from the garbage will be sent to waste water processing stations instead of leaking into the ground.

"All these measures taken will help us attract more investment," Ji said.

More and more cities and regions are paying attention to environmental protection while developing the economy, especially in the petrochemical industry.

"If we do not invest to process the sewage and garbage now, we have to pay a much higher price in the future," said Li Maolin, project manager of Nanjing Chemical Industry Park in Nanjing, capital of East China's Jiangsu Province.

All the enterprises located in the park must have their waste water processed by Sembcorp Industries, a famous Singapore sewage treatment plant, he said.

"We do not accept those projects where the waste cannot be processed, and in fact we have lost some very big investments," he revealed.

However, experts said that environmental pollution remains a serious challenge in the country's economic development.

"Pollution is still one of the biggest bottlenecks in the development of the petrochemical industry in China," Hu Qianlin, director of the National Chemical Industry Productivity Promotion Centre, said at the forum.

Statistics indicate chemical sewage in the country produced 17.5 per cent of waste water last year.

And among all industries, waste gas and rubbish produced by the chemical industry ranked the fourth and fifth respectively.

Sources from China Petrochemical InfoNet said the loss caused by air pollution has already accounted for 3 - 7 per cent of China's gross domestic product and in 2020, the percentage will rise to as high as 13 per cent.