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Riots May Delay Completion of Guangdong Electric Plant in China
By Allen T. Cheng
Bloomberg
15 December 2005
Guangdong Electric Power Development Co. said construction of a 1,200 megawatt power plant in Shanwei, Guangdong may be delayed by violent clashes between police and villagers that left at least three people dead.
More than 300 villagers from Dongzhou, a coastal village 135 kilometers (84 miles) from Hong Kong, were protesting to demand compensation for land taken for the power plant when police opened fire on Dec. 6. Four days later, state-run Xinhua news agency reported three people had died. The New York Times reported the number may be closer to 20.
Guangdong Electric owns 25 percent of the planned power plant that would supply the city of Shanwei's 2.6 million people, as well as other parts of the southern province, which has a population of 110 million and soaring energy demand. The company, whose state-owned parent owns 50 percent of the project, says it paid villagers fairly for their land.
"We're still hoping to complete the project sometime in 2006 or 2007," Li Xiaoqing, secretary to the board of Shenzhen-listed Guangdong Electric, said in a phone interview. "We paid everything that needed to be paid. We're not sure why the villagers claimed they were not paid adequately."
Power producers such as Huaneng Power International Inc. and Shanghai Electric Co., are benefiting from soaring demand for electricity accompanying the nation's economic growth, rushing to build plants to ease power shortages that affected China's largest cities and 18 of its 27 provinces last summer.
China's economy expanded 9.4 percent in the third quarter. Still, that economic development has "hidden costs," said Robin Munro, research director of Hong Kong-based China Labour Bulletin, a group that tracks workers and people's rights in China. It is often the "ordinary people" who pay. "Ordinary Chinese don't participate in protests unless they're desperate," Munro said.
Guangdong Electric and its parent are currently building or planning 17 power plants, on top of the five already in operation. The company said on Oct. 28 that its third-quarter profit rose 51 percent to 227.4 million yuan ($28 million) from a year earlier because of increased production and prices. Its power output rose 19.8 percent to 6.4 billion kilowatt hours.
Yao Wei, an analyst with Guotai Junan Securities in Shanghai, said he believes Guangdong Electric shares won't be affected by the riots because market demand for electricity remains high. "This project in Shanwei may be delayed, but it won't impact the stock price," he said.
The company's shares, down 12 percent this year, fell 1 cent, or 0.3 percent, to HK$3.06 at 11:02 a.m. in Shenzhen.
Guangdong Electric's Li said the company has fulfilled all legal obligations in Shanwei and is cooperating fully with provincial officials to make sure the dispute is settled properly.
According to the U.S.-funded Radio Free Asia, the village of Dongzhou was offered 600,000 yuan ($74,290) a year for the land taken for the building of Guangdong Electric's power plant, which will cost $743 million to construct.
Since June, villagers unhappy about the requisitioned land had regularly formed "armed protests" at the construction site, the official Xinhua New agency said in a Dec. 10 online report.
The report, which has since been removed from Xinhua's Web site, said villagers blocked traffic, attacked government offices and took people and vehicles passing through the village hostage, in an attempt to force the local government to approve more compensation for the land.
When this didn't succeed, villagers, "incited by a few instigators," attacked a nearby wind power plant, the report said, quoting the Information Office of the city government of Shanwei -- the administrative city for Dongzhou village.
By evening, demonstrators "began to throw explosives at the police" who were "forced to open fire in alarm." Three villagers died and five others injured, it said.
A New York Times report yesterday cited villagers as saying 20 or more people were killed by automatic weapons fire, and at least 40 were still missing.
"These riots are not that unusual," said Edmond Lee, an analyst with JP Morgan in Hong Kong, adding that he didn't expect the incident to affect the share price or long-term business of Guangdong Electric.
"A few months ago, there was a riot in northern Hebei province against another power plant that was under construction and there also were villagers killed," Lee said. "Quite often, the villagers are at odds with the construction companies or local village chiefs and not the power companies themselves."
Lee was referring to a riot that led to the deaths of six farmers and left 48 injured in northern Hebei's Dingzhou village in June. Villagers claimed contractors representing Hebei Guohua Power Co. paid them inadequately for land taken to build a power plant.
"These disputes are very common," he said. "Local villagers and contractors often do not see eye to eye on compensation."
The number of mass protests in China increased to more than 74,000 last year from 10,000 in 1994, Public Security Minister Zhou Yongkang said in September.
China continues to keep news of such disputes out of the media. It took four days for the government to publicly respond, in the shape of the Dec. 10 Xinhua report, to the deaths in Dongzhou, which foreign news organizations -- especially in Hong Kong -- had given coverage. News of the riots wasn't broadcast outside of Guangdong, one of the three richest provinces in China.
"These struggles are absolutely inevitable," China Labour Bulletin's Munro said. "It requires a systemic solution, one that requires political representation for the have-nots, and I'm not sure the government is willing to do that."
Riots May Delay Completion of Guangdong Electric Plant in China
By Allen T. Cheng
Bloomberg
15 December 2005
Guangdong Electric Power Development Co. said construction of a 1,200 megawatt power plant in Shanwei, Guangdong may be delayed by violent clashes between police and villagers that left at least three people dead.
More than 300 villagers from Dongzhou, a coastal village 135 kilometers (84 miles) from Hong Kong, were protesting to demand compensation for land taken for the power plant when police opened fire on Dec. 6. Four days later, state-run Xinhua news agency reported three people had died. The New York Times reported the number may be closer to 20.
Guangdong Electric owns 25 percent of the planned power plant that would supply the city of Shanwei's 2.6 million people, as well as other parts of the southern province, which has a population of 110 million and soaring energy demand. The company, whose state-owned parent owns 50 percent of the project, says it paid villagers fairly for their land.
"We're still hoping to complete the project sometime in 2006 or 2007," Li Xiaoqing, secretary to the board of Shenzhen-listed Guangdong Electric, said in a phone interview. "We paid everything that needed to be paid. We're not sure why the villagers claimed they were not paid adequately."
Power producers such as Huaneng Power International Inc. and Shanghai Electric Co., are benefiting from soaring demand for electricity accompanying the nation's economic growth, rushing to build plants to ease power shortages that affected China's largest cities and 18 of its 27 provinces last summer.
"Hidden Costs"
China's economy expanded 9.4 percent in the third quarter. Still, that economic development has "hidden costs," said Robin Munro, research director of Hong Kong-based China Labour Bulletin, a group that tracks workers and people's rights in China. It is often the "ordinary people" who pay. "Ordinary Chinese don't participate in protests unless they're desperate," Munro said.
Guangdong Electric and its parent are currently building or planning 17 power plants, on top of the five already in operation. The company said on Oct. 28 that its third-quarter profit rose 51 percent to 227.4 million yuan ($28 million) from a year earlier because of increased production and prices. Its power output rose 19.8 percent to 6.4 billion kilowatt hours.
Yao Wei, an analyst with Guotai Junan Securities in Shanghai, said he believes Guangdong Electric shares won't be affected by the riots because market demand for electricity remains high. "This project in Shanwei may be delayed, but it won't impact the stock price," he said.
The company's shares, down 12 percent this year, fell 1 cent, or 0.3 percent, to HK$3.06 at 11:02 a.m. in Shenzhen.
Guangdong Electric's Li said the company has fulfilled all legal obligations in Shanwei and is cooperating fully with provincial officials to make sure the dispute is settled properly.
Compensation
According to the U.S.-funded Radio Free Asia, the village of Dongzhou was offered 600,000 yuan ($74,290) a year for the land taken for the building of Guangdong Electric's power plant, which will cost $743 million to construct.
Since June, villagers unhappy about the requisitioned land had regularly formed "armed protests" at the construction site, the official Xinhua New agency said in a Dec. 10 online report.
The report, which has since been removed from Xinhua's Web site, said villagers blocked traffic, attacked government offices and took people and vehicles passing through the village hostage, in an attempt to force the local government to approve more compensation for the land.
'Instigators'
When this didn't succeed, villagers, "incited by a few instigators," attacked a nearby wind power plant, the report said, quoting the Information Office of the city government of Shanwei -- the administrative city for Dongzhou village.
By evening, demonstrators "began to throw explosives at the police" who were "forced to open fire in alarm." Three villagers died and five others injured, it said.
A New York Times report yesterday cited villagers as saying 20 or more people were killed by automatic weapons fire, and at least 40 were still missing.
"These riots are not that unusual," said Edmond Lee, an analyst with JP Morgan in Hong Kong, adding that he didn't expect the incident to affect the share price or long-term business of Guangdong Electric.
"A few months ago, there was a riot in northern Hebei province against another power plant that was under construction and there also were villagers killed," Lee said. "Quite often, the villagers are at odds with the construction companies or local village chiefs and not the power companies themselves."
Farmers Killed
Lee was referring to a riot that led to the deaths of six farmers and left 48 injured in northern Hebei's Dingzhou village in June. Villagers claimed contractors representing Hebei Guohua Power Co. paid them inadequately for land taken to build a power plant.
"These disputes are very common," he said. "Local villagers and contractors often do not see eye to eye on compensation."
The number of mass protests in China increased to more than 74,000 last year from 10,000 in 1994, Public Security Minister Zhou Yongkang said in September.
China continues to keep news of such disputes out of the media. It took four days for the government to publicly respond, in the shape of the Dec. 10 Xinhua report, to the deaths in Dongzhou, which foreign news organizations -- especially in Hong Kong -- had given coverage. News of the riots wasn't broadcast outside of Guangdong, one of the three richest provinces in China.
"These struggles are absolutely inevitable," China Labour Bulletin's Munro said. "It requires a systemic solution, one that requires political representation for the have-nots, and I'm not sure the government is willing to do that."