Nearly four years has passed since Yu Bei first moved to Nanzhuang Township in the southern province of Guangdong. She still recalls the hazy sky, the large smoky chimneys and the dust-filled air haunting the small, yet economically important area, which used to produce one-eighth of the world's building ceramics.

"You see the fish there," said Yu, pointing to a clear brook that runs across the township seat, "Back three years ago you could only imagine having fish swimming in this river."

Less than a one-hour drive from the provincial capital of Guangzhou City, the township built its reputation as "China's No.1 building ceramics base" after more than twenty years of mass production of building ceramics, such as tiles and sanitary ware, from its rich clay reserves starting in the 1980s.

In fact, the township's GDP ranked seventh among the 1,500 townships of the prosperous Guangdong since in 2001.

However, behind the fancy economic indices were heavy air and water pollution, which severely damaged the living environment for the 150,000 Nanzhuang township residents.

"I got a rash just a few days after I came here. When I told the doctor in a city hospital that I came from Nanzhuang, he said,'Oh, that'll explain it,' " said Yu, 35, who moved here in 2006 to be a civil servant.

The dust discharged from the ceramics mills floated in the air. People living near those factories did not even dare to open their windows, except on rainy days, said Zhang Huiming, chief of Nanzhuang Township Committee of the Communist Party of China (CPC).

"A ceramics factory could produce at least 100 kilograms of sulfur dioxide per day, and we had 75 of them here. Many of them were not willing to invest much in waste treatment back then," he said.

"Besides, the township relied too much on the ceramics industry, which would not be good for its sustainable development, as the clay would eventually be used up," he said.

In 2007, the township government launched a program to restructure its environmentally-hostile economy. It closed 62 ceramics factories and upgraded the remaining 13 plants which had better environmental protection facilities.

Some large companies, which were successful enough to expand, moved their factories to other townships or areas in central and western provinces with abundant land and clay resources, said He Yongqing, a member of the township's Party committee.

"However, it doesn't mean they would be allowed to bring pollution to those places, as the current technology can surely minimize the pollution far below the state-allowed discharge level, plus the government is much stricter when it comes to emission controls than before. Besides, another reason why Nanzhuang cannot mass-produce ceramics any more is that we don't have much land for companies to expand," He said.

To fill the vacancies left by the former ceramics mills, Nanzhuang brought in several high-tech companies, such as Kanbotong Communication, which supplied antennas for Chinese manned spacecrafts Shenzhou V and VI, said He, the Party official of the Nanzhuang township.

"High-tech companies would not be here if the environment hadn't improved, because bad air quality could affect their product quality," He said.

The amount of sulfur dioxide and nitrogen dioxide in the air dropped 66 percent and 56 percent, respectively, in 2009 compared with 2006.

"Those factories may be gone, but we will not surrender our time-honored reputation from the ceramics industry, which is a great intangible asset," said Zhang Huiming, the Party chief of the Nanzhuang Township.

In 2007, Nanzhuang Township attracted investments totaling one billion yuan (about 152 million U.S. dollars) in establishing two development zones for sales centers and headquarters of ceramics makers from all over the world.

Up until now, more than 1,100 ceramics companies have set up sales centers and over 150 of them have moved their headquarters to Nanzhuang Township, which makes Nanzhuang the largest ceramics trading and exhibiting center in China.

"Nanzhuang is so close to Guangzhou, so we thought it would also be promising to develop tourism here, as it also has many rivers and lakes, something we almost forgot when concentrating on developing the ceramics industry," said Zhang Huiming.

The 76.7-square-kilometer township is crisscrossed with rivers and lakes, with about 26 percent of it covered by water.

So far, the township has already attracted nearly 8 billion yuan of investment to develop a 10-square-kilometer "leisure-seeking zone" , which includes a dock for yachts, a sports center, a cartoon production complex, as well as hotels. These new businesses would also provide many jobs for former ceramics workers, Zhang said.

The economic restructuring in Nanzhuang has begun to bear fruit as GDP in 2009 topped 10.2 billion yuan, up 65 percent compared with the 2006 number. Meanwhile, land value increases resulted from environmental improvements that gave farmers larger dividends on land shares.

In the township's Luonan Village, the dividend for each villager on land rented to companies rose to 7,899 yuan per year, up 78 percent compared with 2006, according to data provided by the local government.

Nanzhuang's transformation is an example for Chinese industrial townships, as economic restructuring will still be a pressing task for China in the coming five years, said Zhu Xiaodong, an environmental studies professor with Nanjing University.

Chinese Premier Wen Jiabao said last month, while explaining the CPC Central Committee's proposal on formulating the country's next five-year plan, that accelerating the transformation of China's economic growth pattern is a task of great urgency for the country's development.