Protests Force Chemical Plant Closure In China

Municipal authorities in Dalian, a city in northeast China, have ordered the closure of a recently built p-xylene plant after protests by local residents. The protests erupted a few days after waves from a tropical storm nearly swept through the facility, raising fears of an environmental disaster.

In an Aug. 17 statement, the municipal government of Dalian said work to permanently close the p-xylene plant has already begun. The statement quotes the city’s mayor as saying that the safety of local citizens is paramount.

The $1.5 billion plant belongs to Dalian-based Fujia Group. The company says the facility can produce up to 700,000 metric tons per year of p-xylene, a key raw material in polyester production. The plant, located about 20 miles from Dalian’s center, started operating in June 2009.

Earlier this month, about 1,000 firefighters and Chinese army troops frantically worked to rebuild a dike around the plant after waves from tropical storm Muifa breached the barrier, Chinese state media reported. This close call with an environmental mishap prompted thousands of Dalian residents to take to the streets and demand the immediate closure of the plant.

Authorities in China are keen to prevent civil disturbances, says David S. Jiang, president of Sinodata Consulting, a Beijing-based chemical market research firm. Jiang, who has no firsthand knowledge of the Fujia case, says he expects intense negotiations over financial compensation will now take place between Fujia and the Dalian government. “Dalian [officials] authorized this plant,” he says.

Chinese newspapers have reported that the Fujia plant will be relocated, although Jiang says such an operation would be extremely costly.

The Dalian protests are not without precedent in China. In 2007, middle-class protesters in the southern city of Xiamen prevented the construction of a p-xylene plant near the city center.