Mar. 23, 2023

Protection Money

NewsChina 中国新闻周刊英文版

 By Wang Yan in Anhui and Zhejiang


The river basin, an area covering nearly 11,674 square kilometers (4507 sq miles) has held onto its lush beauty despite the country’s sweeping modernization and development process, which has caused some major waterways to dry up, and others to fill with toxic pollutants.



“However, due to industrial restrictions implemented in the name of river protection, Huangshan, the river’s source, has sacrificed both urban development and improvement in the livelihoods of local people,” said Liu Yulong, a researcher from the China Institute of Water Resources and Hydropower Research.

“No one has the right to thwart a city’s economic growth, that’s why a sound system of ecological compensation is vital to achieve harmony in a watershed ecosystem,” he continued.


The Xin’an River originates in mountainous Huangshan, Anhui and runs all the way to China’s eastern seaboard, passing through Zhejiang Province, merging with other tributaries and finally forming the Qiantang River before being embraced by the ocean.

As the major source for Xin’anjiang Reservoir, or One-Thousand-Island Lake (see “Sunken Treasures”, NewsChina, July 2011) in Chun’an, which provides drinking water for people of Zhejiang and is a strategic reserve for the whole Yangtze River Delta region, the river’s water quality is critical for the health of millions.

Thanks to the Huangshan regional government’s continued environment protection efforts in the past decade, including restricting the construction of riverside chemical and textile factories, and restrictions on the usage of pesticides and fertilizer in farming, the river’s water quality is far better than most all other major rivers in the country.

Listed as a “first-class drinking water reserve,” the One-Thousand-Island Lake reservoir, which many believe to be naturally formed, enjoys a nationwide reputation for its crystal clear waters. With government estimates indicating that some 70 percent of China’s water sources have been contaminated, mainly due to the mining (see “Finding the Source,” NewsChina March, 2012), chemical, textile and power industries, Xin’an has come to be known as one of China’s last environmental oases.

Slow industrial development is the trade-off for ecological protection, particularly true of waterways. Official statistics indicate that Huangshan’s per capita GDP in 2011 was 27,873 yuan (US$4410), around 32 percent of that of Hangzhou, the capital of Zhejiang Province. Large numbers of people in three major riverside counties including Shexian, Xiuning and Qimen live below the provincial poverty line.

The Huangshan government responded to our enquiries with a statement that: “In the past ten years, apart from efforts including spending over 4.08 billion yuan (US$646m) relocating 70 companies and 9.95 billion yuan (US$1.57bn) upgrading industrial equipment, the city ordered closure of a total of 150 enterprises which were causing pollution, and in the past three years, a total of 160 projects amounting to 16 billion yuan (US$2.53bn) in total investment which could not meet minimum environmental standards were rejected by the municipal government.”

Some might call this an exemplary record. However, in a country where a region’s success is measured in hard currency and not in the clearer water or green hills, failure to maximize industrial productivity can raise hackles at higher levels.

Wang Fuhong, Party secretary of Huangshan city, admitted to the reporter that “effective practice on environmental protection and pollution management has prevented ecological damage, but our city has also sacrificed a lot of development opportunities.”



In the past two decades, deforestation, soil erosion and the over-extraction and pollution of water in many parts of China have done irreparable damage to countless ecosystems.

In order to avoid further entrenchment of the “pollute first, recover later” mindset taking hold in the provinces since the early 2000s, the central government and research groups started to explore more effective patterns of protecting waterways, with the official listing of the Xin’an River seen as a pilot program.

The concept of “ecological compensation” or the internationally-adopted Payment for Environmental Services (PES), which requires enterprises, households or government agencies to pay for any cleanup operations necessitated by commercial activity, was rapidly introduced and accepted in China. According to a report entitled Chinese Practices of Ecological Compensation and Payments for Ecological and Environmental Services and its Policies in River Basins submitted to the World Bank in 2006, “the PES model is developed from initial subsidies of environmental protection to the current compensation for the limitation of development rights and payments for ecological services.”

On April 17, 2006, at the sixth National Conference on Environmental Protection, Primer Wen Jiabao stated that the policy and mechanisms of PES must be established and improved based on the following principles: “Users should protect, destroyers should restore, and beneficiaries and polluters should pay.”

Liu Yulong told our reporter that research on the implementation of the Xin’an River basin eco-compensation program was completed as early as 2005, and the report was presented to both the Anhui and Zhejiang provincial governments. Following years of negotiation, the compensation mechanism finally began trials in 2011.

“This is the first inter-provincial water eco-system compensation attempted either inside or outside of China,” Liu told our reporter.

According to the trial eco-compensation agreement, the central government will allot an annual 300 million yuan (US$ 46m) to Anhui Province to pay for protection of the river; in addition, both Zhejiang and Anhui will set aside 100 million yuan (US$15m) as mutual compensation funds, with payouts dependent on the water quality at its point of entry into Zhejiang.

Fang Zhaoxing, vice director of the regional Chun’an Environmental Bureau told NewsChina that since early February, Anhui and Zhejiang have commenced joint monitoring at Jiekou, the border between the two provinces. “Some issues, including water quality standards, remain unsettled.”



The 300 million yuan promised by the central government was first allocated to Anhui in 2011. According to the Huangshan government, the money was spent on eco-improvement projects such as rural garbage collection, fish cage dismantling along the river, riverboat sewage collection and treatment, the construction of water treatment and garbage incineration plants, flood control and environment monitoring, among other projects.

The Huangshan government also plans to spend five years and a total of 40 billion yuan (US$6.3bn) on 500 key water treatment projects to fulfill the stated aims of the Xin’an River water quality control program.

725 fish cages have been dismantled and 370 fishermen banned from breeding fish along the river’s main stretch to lower the level of organic content in the river, which can lead to algal blooms and other problems. “By the end of 2013, all the fish cages along the trunk river will be eliminated, and tributary fish feeding will be regulated,” said Wang Fuhong.

In Zhangtan, a small riverside village on the southern bank of the river, a few concrete garbage pits were constructed in 2011. The local village authorities appointed villager Zhang Haisheng to transport the garbage to a nearby incineration plant.

Zhang receives a monthly salary of 500 yuan (US$79) to collect refuse from each village household and transport it to the local incineration plant. “Before 2011, villagers would just throw garbage in the street, or in a pile near the riverbank. When it rained or there was a flood, the garbage was washed into the river,” said Zhang.

All four villages our reporter visited had already adopted the same garbage disposal system as Zhangtan. However, the impoverished communities along the riverbank have bigger problems than where to throw their garbage.



The main goals of the eco-compensation scheme were to improve quality of life for the millions of villagers living along the banks of the Xin’an River. However, due to the limited compensation, other than a few minor improvements such as refuse collection, few are feeling the benefit, and others have found themselves thrust deeper into poverty.

A lack of local industrial jobs has left local young people with few employment options. An estimated 80 percent of rural villagers under 30 work in the cities, with the few remaining families dependent on growing tea leaves, rapeseed and loquats. Once grown, these goods are hard to transport due to the almost medieval levels of local infrastructure. Only a handful of bridges span the river, and there are barely any passable local roads, with bamboo rafts acting as ferries between villages the principal mode of transport.

Lacking better infrastructure, boats are the only transportation method for local farmers

 “Since we do not have convenient transportation on this side of the river, our loquats and tea leaves sell for much less than those from villages on the north bank,” local farmer Zhang Haisheng, 51, told NewsChina. He added that each year his family loses 3,000 to 4,000 yuan (US$474 to 632) due to its isolation. With a total annual income of barely 10,000 yuan (US$1,581) per year, a 40 percent loss of income is devastating.

“If they just built a road, things would be different,” he added.

Farmers have attempted to carry their fruits on the cross-river bamboo ferries to try for a better price on the northern shores. However, even this rickety form of transport can vanish in the event of a flood. “It is a chaotic situation during the harvest season in May or June when all the villagers cram onboard carrying heavily-loaded bamboo baskets,” said Zhang. “Some villagers fall into the water, and lose their goods.”

Zhang’s septuagenarian mother showed our reporter a scar on her left shin, attributing it to a boating accident.

The new prohibitions on fish breeding have hit local fishermen hard. 4,000 yuan (US$ 632) in compensation from the government is nowhere near enough to cover the losses of a fishing family which may have fished the Xin’an River for generations, suddenly put out of business. Even the Huangshan government has admitted that it is hard for such families to survive.

“This is still a pilot program, and it could be a good opportunity for the upper and lower regions to create a dialog,” said Liu Yulong. “Whether it will encourage legislation on ecological compensation, or be promoted in other river systems, still remains unclear. The government needs to see this mechanism mature before implementing it across the country.”

“I am afraid that when it finally becomes mature, most of the country’s rivers might have been irreversibly polluted,” he added.

Happy with their loquat harvest, local farmers long for more convenient transportation, so as to sell their fruit for a better price



To the naked eye, the Xin’an River seems to have gushed forth from an ancient scroll painting. Straw-hatted farmers putter back and forth in tiny boats, while verdant mountains erupt from its banks, their peaks obscured in the morning mist. Time seems to stand still.

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