China says stimulus plan won't sacrifice environment

An employee works at the Ma'anshan Iron and Steel Company in Hefei, Anhui province March 6, 2009.

BEIJING (Reuters) - China's 4 trillion yuan ($585 billion), two-year stimulus package to counter the global economic slowdown will not lead to the environment being sacrificed for growth, a deputy minister said on Wednesday.

The plan, unveiled late last year to help the world's third-largest economy survive what Beijing terms a "financial tsunami," is focused on infrastructure and other big ticket items, as well as housing.

Since the package was announced the Environment Ministry has approved 970 billion-yuan worth of projects, but has also turned down schemes worth 104 billion yuan, vice-minister Wu Xiaoqing told reporters at the annual meeting of parliament.

These included projects which may threaten drinking water sources, would consume too much energy, damage nature reserves or were in sectors in which the government was trying to control overcapacity, Wu said.

"This a red line, a high-tension cable, which cannot be touched and cannot be crossed," he added.

"We have especially stressed in our meetings that we would rather been seen as the baddy today than as a criminal in history, and we will most definitely keep the bar high," Wu said.

Still, the government has actually cut the amount of money from the package intended specifically for environmental protection to 210 billion yuan from an original 350 billion yuan.

Another vice-environment minister, Zhang Lijun, said the money for tackling the crisis was not only about ensuring growth and promoting domestic consumption. It was also to be invested in phasing out polluting, inefficient and wasteful factories.

"It's an opportunity to restructure, and we must use this opportunity well," Zhang added.

But the official said there would be no turning back on the government's support for car purchases, even though this has led to ever-worsening congestion in the cities and degraded the air.

China overtook the United States as the world's number one auto market in January and many of the world's biggest car brands have Chinese factories pumping out vehicles primarily for a growing domestic middle class.

"Certainly there is an impact upon the environment from the increase in vehicles, that's without a doubt. But we cannot not develop the auto industry just because of its effect on the environment," Zhang said.

"If people can't drive cars, they'll have to go back to the time of everyone riding bicycles. I don't think this is realistic, and it is not possible."

(Editing by Jeremy Laurence)

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