A choking city's road to reform

Growing GDP, falling income

With robust growth of heavy industry, Tangshan's Gross Domestic Product (GDP) exceeded 100 billion yuan in 2001 and increased fivefold to 500 billion yuan ten years later.

The port city, with a population of 7.6 million, was ranked 19th out of major Chinese cities in terms of GDP in 2012, and its GDP is expected to surpass 600 billion yuan this year, according to Chen Xuejun, the city's mayor.

Tangshan produces one-eighth of China's steel, three percent of China's cement, 13 percent of China's coking products and 0.8 percent of China's electricity, which have propped up economic growth but brought harm to the environment, said Chen.

The sulfur dioxide and nitric oxide the city discharged in 2012 amounted to 318,000 tons and 390,000 tons, respectively, accounting for 1.5 percent and 1.7 percent of China's total.

In the first nine months of the year, people in Tangshan had only 75 days with air that was safe to breathe according to the national standard.

Meanwhile, the robust GDP growth has not necessarily brought more wealth to locals like Zhou.

Zhou had a monthly salary of about 700 yuan in 1998, when he first joined the steel company, a decent income at that time. It rose to more than 3,000 yuan around 2006.

However, things began to change after 2008, when the global financial crisis soured the world economy and China slowed down its pace of growth.

The profit from a tonne of steel was worth the price of a cell phone several years ago, but devalued to the price of a kilogram of pork two years ago, and was worth only the price of a bottle of water last year. Profits from one tonne of steel weakened further to 0.43 yuan in the first half of this year due to serious overcapacity and sluggish demand, according to Jiang Deguo.

Zhou's monthly salary has dropped to less than 2,000 yuan as his steel company has faced serious losses. It is hard for Zhou to make ends meet, with a child in high school and a jobless wife to support.

Reducing steel production capacity by the 40 million tonnes designated by the municipal government, almost one-third of the total, will involve the resettlement of more than 400,000 people directly or indirectly engaged in the industry, said Jiang.

It will be a pressing task for the government to help foster new areas of growth to keep people employed.

Transformation endeavor

Saturated markets, limited resources, a deteriorating environment and the public's expectations for clean air have forced the Tangshan municipal government to act.

An irrational industrial structure caused the environmental problems, especially the air pollution, said Jiang.