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Economy

Businesses feel pain as emission-cut war escalates

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2015-06-25 11:00Xinhua Editor: Gu Liping

As if China's perennial smog worries were not enough, the weakest economic growth for years means a painstaking struggle must now strike a balance between the environment and the economy.

With 40 percent of its GDP coming from glass, cement and iron, Xingtai City in north China's Hebei Province is always near the top of "most smoggy" lists. Slowdowns in manufacturing and real estate were already squeezing the profits of the city's factories, before the cost of pollution control had businesses lurching from bad to worse.

Changcheng, a local glass manufacturer, claims to have cut production since the beginning of last year, yet all glass boilers on the five production lines are still ablaze.

It costs some 100 million yuan (16 million U.S. dollars) to cool each boiler and reheat it to the required temperature of over 1,600 degrees Celsius, so the company leaves them burning, hoping that business will improve, said Li Binchen, a Changcheng director.

"For every square meter of glass produced, we earned an amount equal to the price of a boiled egg [one or two yuan] last year. Now, we are just burning money," he said.

A local government campaign has seen Changcheng converting production lines from coal to natural gas. "Transformation of each production line costs some 140 million yuan and it costs an extra 20,000 yuan per day to run the new facilities," Li said. "Our output last year was 1.2 billion yuan, but we made almost no profit at all."

China declared a "war against pollution" last year and northern areas, including Hebei and the cities of Beijing and Tianjin, are the battlefront.

In 2014, Beijing shut down 392 polluting plants, and Hebei reduced iron and steel production by over 15 million tonnes respectively.

LESS MONEY, FEWER JOBS

Changcheng is just one of many of businesses caught in the conundrum.

Jidong, a Xingtai-based cement producer, has produced nothing at all since October, but still pays full wages to its 200 workers. Wei Xiaofeng, the company's manager in charge of environmental affairs, said the company is losing 20 million yuan every month.

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