People responsible for illegally beginning construction of iron-smelting facilities in east China's Jiangsu Province--using 436 hectares of illegally obtained land and billions of yuan in fraudulently obtained loans --will be punished, say the country's top officials.

During a State Council meeting in Beijing Wednesday, Premier Wen Jiabao decided to send a special team to investigate the construction of an iron-smelting project in the cities of Changzhou and Yangzhong.

The project, in which total investment is 10.6 billion yuan (US$1.3 billion), was initiated by Jiangsu Tieben Iron Company in 2002 and construction began in June 2003. Production capacity at time of completion was projected to be 8.4 million tons.

Investigations to date indicate that the project illegally occupies 436 hectares of land and that construction began without approval from the local environmental protection department.

Forged documents were used to secure large loans and some local officials were found to have had a hand in the illegal actions, according to an investigation report.

Following Wednesday's State Council meeting, the Jiangsu provincial and financial supervision departments were called on to punish severely any local government department, officials or financial institutions involved.

Meanwhile, judicial departments are investigating Tieben Iron's activities.

The premier's attention to the case underscores the government's firm intention to use land resources reasonably and protect shrinking farmland.

To stem the rapid loss of farmland, the Chinese government has vowed to strengthen efforts to crack down on crimes involving land and resources, including officials' profiteering from illegal land projects and illegal projects that reduce cropland.

In 2003, 427,800 hectares of land was taken over for industrial development, a rise of 80,000 hectares over the past six years' annual average. Of the total, 229,133 hectares were farmland, a rise of 17 percent from the previous year.

The Ministry of Land and Resources reports that in 2003 alone, China's farmland acreage decreased by 2.7 million hectares to 123.4 million hectares.

(China Daily April 29, 2004)