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Environmental Inspections and Local Industrial Restructuring 2016–2019

By the mid-2010s, China’s environmental problem was no longer only a lack of laws. A growing concern was uneven enforcement at the local level. Many counties and towns depended heavily on small industrial clusters for employment and tax revenue, while environmental violations were often handled inconsistently or tolerated for long periods.

The central government responded by strengthening inspection and accountability. In 2016, the first full round of Central Environmental Protection Inspections was launched in eight provinces and regions. The inspections did not focus only on individual polluting companies. They also examined whether provincial and local governments had actually enforced environmental rules and responded to public complaints.

At the same time, regulators began targeting large numbers of small, scattered, and weakly regulated enterprises, commonly described as “散乱污” enterprises. In 2017, Beijing-Tianjin-Hebei and surrounding cities were instructed to identify and rectify these businesses. Authorities used a combination of closure, upgrading, and relocation into industrial parks. By mid-2017, regulators had already identified 398 clusters of “散乱污” enterprises in the region.

This marked a shift from writing environmental standards to enforcing them through direct political accountability, cross-regional inspections, and large-scale industrial restructuring. In places where an entire local economy depended on small polluting businesses, environmental enforcement could reshape not only production but employment, migration, and community life.

Policy Response

2014 — State Council Notice on Strengthening Environmental Supervision and Enforcement

“国务院办公厅关于加强环境监管执法的通知”

The notice required comprehensive inspections of polluting enterprises, stronger local enforcement, grid-based environmental supervision, public disclosure, and tougher penalties for violations. It also placed clearer responsibility on city and county governments for day-to-day environmental enforcement.

Official Chinese source:

https://www.mee.gov.cn/zcwj/gwywj/201811/t20181129_676574.shtml 

2016 — First Round of Central Environmental Protection Inspections

“中央环境保护督察”

In July 2016, eight central inspection teams entered Inner Mongolia, Heilongjiang, Jiangsu, Jiangxi, Henan, Guangxi, Yunnan, and Ningxia. The inspections examined environmental problems as well as the performance of provincial and local governments in enforcing environmental policy.

Official English source:

https://english.mee.gov.cn/News_service/news_release/201607/t20160721_361108.shtml 

2017 — Campaign Against “Scattered, Disordered and Polluting” Enterprises

“散乱污”企业整治

In Beijing-Tianjin-Hebei and surrounding regions, local governments were instructed to identify “散乱污” enterprises and classify them for closure, upgrading, or relocation into industrial parks. By July 2017, more than 33,000 enterprises and facilities had been inspected, and environmental problems were found at over 20,000 of them.

Official Chinese source:

https://www.mee.gov.cn/gkml/hbb/jytafw/201709/t20170927_422430.htm 

Industrial Decline in Sangpo Village

2018–2019

Sangpo, a village in Henan Province, had built much of its local economy around sheepskin processing. By the 2010s, the village was home to more than a hundred fur-processing factories and had also developed into a major e-commerce centre for winter boots and other leather goods. But the industry consumed large quantities of water and polluted the local water supply.

In 2018, environmental enforcement intensified. Of Sangpo’s 154 fur-processing enterprises, 135 had their water-intensive processing operations dismantled, leaving only 19 to continue operating while the industry was reorganised into a smaller number of groups with centralised wastewater treatment.

The economic impact was immediate. Reuters reported that during what should have been the peak production season, most factories were idle, hundreds of workers had left the village to look for work elsewhere, shops were shuttered, and roads were unusually quiet. One former factory owner described local businesses as “more dead than alive.”

The village later shifted toward e-commerce, retail, and shoe production. By 2019, online sales had become an important new source of income, illustrating how environmental enforcement could force an entire local economy to restructure rather than simply close.

Selected Sources

“桑坡村的新生” — “The Rebirth of Sangpo Village”

Xinhua, June 22, 2020

https://www.xinhuanet.com/politics/2020-06/22/c_1126145460.htm