Market News

 July 15, 2013
China Protest Forcing Nuclear Retreat Shows People Power

 Protests in a southern Chinese city last week that forced local authorities to abandon plans for a uranium-processing facility highlight the growing willingness of ordinary people to challenge the state on environmental issues.

The proposed Longwan Industrial Park project won't be approved "in order to fully respect the opinion of the masses," the government of Heshan, Guangdong province, said in a statement on its website on July 13. A "social-stability risk assessment" of the proposal that was released for public awareness generated "much opposition," it said.

Heshan is the latest local authority to back down in the face of pressure from a public increasingly empowered by its ability to sway officials who fear social unrest. Governments in cities across the country have canceled or delayed plans for industrial projects over the past year after confrontations with residents concerned about safety and pollution.

"Chinese civil society is getting stronger," said Willy Wo-Lap Lam, an adjunct professor of history at the Chinese University of Hong Kong. "People now realize if their numbers are big enough, if they are united and stand their ground, the government will back down," he said.

Opposition to the uranium facility underscores growing concern among China's expanding middle class that industrial plants damage the environment and people's health. Pollution has replaced land grabs as the primary cause of social unrest with many of the protests erupting in more prosperous coastal cities such as Shanghai and Ningbo where residents have deployed smart-phones and used social media to organize their campaigns.

Party's Survival
President Xi Jinping, who is also head of the ruling Communist Party of China, said last month that "winning or losing public support is an issue that concerns the CPC's survival or extinction," according to a June 18 report by the official Xinhua News Agency. Xi spoke at a conference about a yearlong campaign starting in the second half of this year to improve ties between the party and the people, Xinhua said.

Heshan authorities backed down over the 37 billion yuan ($6 billion) uranium-processing project a day after more than 1,000 demonstrators rallied outside government offices in Jiangmen city, which administers Heshan. China National Nuclear Corp. and China General Nuclear Power Group had planned to build the 229-hectare (566-acre) plant to enrich uranium and fabricate fuel, according to an earlier statement on the Jiangmen government's website.

Improve Communication
Officials initially pledged to extend a consultation period to 20 days from 10 and improve communication with the public before announcing on July 13 that they had scrapped the project.

Pan Jianming, a Beijing-based spokesman for state-owned China National Nuclear, didn't respond to calls and faxes seeking comment on Monday. Calls to the offices of China General Nuclear and the Jiangmen government also went unanswered.

"The current central government has requested economic development must be pursued with environmental protection and at the same time social stability is a line that can't be crossed," said Ma Jun, a Beijing-based environmentalist and founder of the Institute of Public and Environmental Affairs. "It's evident that in this case the local government largely acted to keep social stability."

Resume Approvals
Protests in Shanghai in May forced battery maker Shanghai Guoxuan New Energy Co. to abandon plans for a factory on the outskirts of the city. Demonstrations in the southwestern city of Kunming took place the same month to oppose plans for a petrochemical plant planned by China National Petroleum Corp.

China's State Council said in October it would resume approvals of nuclear-power plants after a suspension imposed in the wake of the earthquake and tsunami that crippled the Fukushima Dai-Ichi plant in Japan in March 2011. The world's largest energy consumer intends to more than triple its nuclear-power capacity by 2015, according to a government white paper released that month.

The country currently has 17 nuclear reactors in operation and another 28 being built, according to the World Nuclear Association. An additional 38 have been planned and are preparing to start construction, according to the association.

China plans to increase nuclear power to as much as 6 percent of its energy mix by 2020, up from less than 2 percent currently, according to a presentation given by Zhu Xuhui, adviser to China National Nuclear, at the Vienna Center for Disarmament and Non-Proliferation in January.

Coastal Regions
The Heshan facility would have been the first nuclear-fuel-processing plant on the southeast coast and would have supplied the power plants of Dayawan, Taishan and Yangjiang, according to a July 13 report from Xinhua. China has built a majority of its processing facilities in the west of the country and most of its generating plants in eastern coastal regions, the report said.

"In future, especially in coastal developed regions, these kinds of public demonstrations may be the norm as we've seen in the West, where such projects face growing 'not in my backyard' sort of opposition," said Ma. "In the future, large projects in China will need a longer and longer time to get approved like they do in the West."

At the same time, the Heshan plant may have been expendable because of its economics.

"This project was still in the phase of doing feasibility studies and could have just gotten canceled because of low power demand in addition to resistance from local residents," Patrick Dai, a Hong Kong-based analyst at Macquarie Group Ltd., said by phone today. "This won't cause a material change to the nuclear policy of China."