While this is hailed as "good news" for local people like Mao, the company itself also considers the relocation as an ideal alternative for it to seek further development, says Liu Qun, director of the environmental protection department of the company.

Located within a cluster of residential communities, the factory now faces severe limitations on the expansion of its businesses due to environmental and safety concerns.

Due to the poor infrastructure in the region, the Wuxi Resin Factory does not have access to the sewage pipes that would carry its wastewater to the city's treatment plants. As a result, the company has to invest a huge amount of money annually in the construction and maintenance of self-made wastewater treatment facilities, says Liu. He adds that the company has spent over 10 million yuan in upgrading its facilities in the past one-and-a-half years.

"But if we move into the industrial parks of other cities in northern Jiangsu province, where there are centralized wastewater treatment facilities, lower labor and land costs, as well as standardized requirements on safety and environmental protection, we could expect to cut costs while propelling future growth," Liu says.

The Wuxi Resin Factory is just one of the hundreds of firms within the city to be relocated under increasing pressure from natural resources and environmental protection.

As a cradle of China's industrial resurgence in the early 1900s and that of the "south Jiangsu model" in economic development featuring village and township industry at the end of the 1970s, Wuxi has played host to one of the nation's most advanced and developed modern industrial zones.

Although the city's manufacturing output ranks among the nation's top 10, years of rapid industrial development have pushed its ecological capacity to the limit.

According to a report from the National Development and Reform Commission (NDRC) last month, there are on average 12 factories located in every one sq km of land in Wuxi. Such an over-concentration of manufacturing enterprises have placed a huge burden upon the sustainability of the local environment, says Liu Zhibiao, professor from Nanjing University's International Economics and Trade Department.

As a result, growing environmental problems in recent years, such as the algae outbreak last year in Lake Taihu that disrupted the water supply to two million residents, have prompted the local government to accelerate its industrial restructuring and upgrading.

Relocation to the northern tip of Jiangsu province and the neighboring Anhui and Jiangxi provinces that are recognized as the next destination for investment in the Pan-Yangtze River Delta and provide new opportunities for enterprises constrained by the shortage of resources and ever-deteriorating environment.

Statistics from the municipal economic and trade committee show while some 800 small chemical companies were closed down in Wuxi in 2007, more than 100 enterprises in the steel, machinery and chemical sectors have so far reached agreements with the government to move into industrial parks either in or out of the city to refuel their growth.

Among them are Jiangsu Wuxi Steel and Wuxi Coke Chemical Factory, which have enjoyed a history of 50 years. They have both agreed to move their production facilities to Jingjiang industrial park in Taizhou, northern Jiangsu province.

Through the deal, Jiangsu Wuxi Steel, controlled by Valin Steel Tube and Wire Co Ltd based in Changsha, capital of Hunan province, is expected to enlarge its production capacity to 10,000 tons in 2009 and would become China's largest seamless steel tube and pipe manufacturer.

Another two companies - Wuxi Greenapple Chemical Industry Co Ltd and Wuxi Dongtai Fine Chemical Industry Co Ltd - are expected to move into the industrial parks in Zhenjiang, also in northern Jiangsu province.

These and other moves after a decade-long rush for GDP growth reflect the realization that industrial restructuring and upgrading is the key to achieving both higher profits and environmental protection. Wuxi is now turning to the hi-tech and modern service industries as its new growth drivers.

According to a report from the Yangtze River Delta Research Center, turnover from the software and information outsourcing industry in Wuxi reached 12 billion yuan in the first half of this year, up by 70 percent year-on-year. Meanwhile, service industry contributed to over 40 percent of its GDP growth in the same period, while the proportion of hi-tech industries also jumped by 3 percent.

Such changes are already helping to improve the city's industrial structure, attracting highly-skilled professionals while controlling pollution.

However, as pointed out by many experts, the relocation of industrial businesses from industrial cities to less developed inland regions means the businesses should take advantage of technological innovation in order to avoid relocating the pollution.

"It's not simply a matter of moving your businesses," says Liu. "We see it as a good opportunity for us to cash in on the current technologies, which helps us save costs and reduce pollution."

(China Daily 10/13/2008 page4)