December 24, 2016 / 3:48 AM / 7 months ago

China's Hebei plans $100 billion investment in clean sectors in 2017

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Trucks are seen stranded near a highway during a polluted day in Shijiazhuang, Hebei province, China December 20, 2016.Stringer

SHANGHAI (Reuters) - The heavily polluted northern Chinese province of Hebei will invest as much as 700 billion yuan ($100.82 billion/82.03 billion pounds) on new projects next year as part of its efforts to "upgrade" its heavy industrial economy, the local government said on Saturday.

The new projects will focus on "innovation" and promote less industrially intensive sectors like renewable energy, financial services, information technology and logistics.

Hebei, which surrounds the capital Beijing, has been on the front line of China's "war on pollution", and has already promised to shut 60 million tonnes of steel capacity and slash coal consumption by 40 million tonnes over the 2014-2017 period.

But local officials have frequently complained that they need more support from the central government to help fund its restructuring efforts, cope with worker layoffs and promote cleaner sectors.

Hebei, home of seven of China's 10 smoggiest cities last year, has declared 2017 to be the "year of transformation and upgrading", the province said on its official website on Saturday (www.hebei.gov.cn).

It said it aims to make better use of private investment, encourage the use of public-private partnerships and simplify approval procedures as part of its efforts to rejuvenate its steel-dominated economy.

The statement did not provide details on proposed projects but said the province would speed up its plans to integrate Hebei with neighbouring Beijing and Tianjin, work on projects related to the Beijing Winter Olympics in 2022, and accelerate the construction of regional economic zones and a renewable energy base.

Hebei has frequently struggled to implement directives from Beijing to close polluting industries, and the Ministry of Environmental Protection this week identified several local steel firms that had failed to comply with emergency restrictions during a recent smog outbreak in the region.

The Saturday statement did not refer to the smog, which sent air quality index readings in several cities, including the provincial capital of Shijiazhuang, close to record highs last week.

But the province vowed to continue improving its inspection mechanisms and show "no mercy" when it comes to eliminating and punishing illegal construction in the steel sector.

It also promised to strictly control coal consumption and encourage the switch to cleaner natural gas, as well as complete the establishment of pilot "coal-free zones" in the smog-prone cities of Langfang and Baoding.

Reporting by David Stanway; Editing by Sam Holmes

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