By Fu Jing (China Daily)
Updated: 2007-12-26 07:41

The nation's 100 resource-dependent cities will get funding to tackle environmental damage and to launch alternative industries by 2015, the government said Tuesday.

The first round of funding will go out by 2010 to cities that have exhausted coal, oil and other resources and face environmental, unemployment and social pressure.

The State Council unveiled the package of measures yesterday after a six-year pilot study in Northeast China.

"We aim to solve the environmental and social pressures in these cities to help ensure a stable supply of energy resources," the State Council said.

Coal, oil and other mining companies will pay higher resource utilization fees and taxation under the new policy, to raise funds to tackle environmental degradation. The government will transfer funds from the central coffers for environmental protection and re-employment programs in cities that have already exhausted their resources.

The central government also signaled that it plans to increase energy prices and ensure that resources firms transfer part of their increased revenue to local government and residents for environmental and social security purposes.

But although the government's pricing reform plan is already made, it will not be put in place immediately, said Zhu Hongren, a senior official in charge of economic operations at the National Development and Reform Commission.

"The (nation's) higher consumer price index has made it difficult for us to take action at the moment," said Zhu.

At least 118 Chinese cities or counties depend on coal mining. Of the more than 8,000 existing mines, 400 have completely run out of resources and two-thirds are getting close to that stage, according to official statistics.

For example, China's famous Daqing oilfield in Heilongjiang Province, which contributes about one-third of the nation's total annual oil production, now has only 30 percent of its proven reserves left and is gradually cutting production.

In some of these cities, the jobless rate is as high as 30 percent and the majority of locals are not included in the social security network, Song Xiaowu, deputy head of the Office for Revitalizing the Old Industrial Base in Northeast China under the State Council, said earlier.

The central government has told its provincial counterparts to "take full responsibility" for curbing environmental pollution, creating jobs and bringing locals into the social security net.

"Their performance in fulfilling these duties should be taken as the top criteria when assessing government and officials," the State Council said.