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China bars loans to polluters

(AP)
Updated: 2007-07-06 13:50

A boy walks in the algae-filled Chaohu Lake in Hefei, capital of East China's Anhui Province June 4, 2007. [Reuters]

China will bar bank loans to companies that violate environmental rules in a new push to clean up worsening pollution, Xinhua News Agency reported Thursday.

"Companies who fail to pass environmental assessment or fail to implement China's environmental protection regulations are disqualified from getting loans from any bank or financial institution," said the deputy director of the State Environmental Protection Administration, Pan Yue.

The report gave no indication of how the new policy would be enforced.

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Regulators already have difficulty enforcing environmental rules because local leaders are reluctant to take steps that might hurt industry or reduce jobs or tax revenues.

The government has been tightening environmental rules amid concerns about pollution that has left millions without access to clean water and made China's cities some of the world's filthiest.

The latest policy announcement appeared to be aimed at companies that find it cheaper to pay fines or bribe local authorities for protection than to install pollution-control gear.

The government also will raise sewage fees charged to polluting and energy-intensive companies to pay for better water treatment, Xinhua said, citing Pan.

"Traditional ways of development have caused the near breakdown of China's resources and environment and people's lives are in great danger," Pan was quoted as saying.