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SCMP Reporter

In recent weeks, senior Jiangsu  officials have  become frequent visitors to Lake Tai, historically one of the most beautiful spots in the southern part of the province. But they have not been there for the views  - they have been on the lookout for blue-green algae.
In May last year, an explosion of the algae turned the lake into a foul-smelling cesspool, endangering the drinking-water supplies of  more than a  million residents of the lakeside city of Wuxi  and inflicting economic losses of  5 billion yuan (HK$5.62 billion).
The massive algal bloom was eventually cleared  by armies of people scooping the growth out of the water and  the lake being flushed with fresh water from the Yangtze River.
The bloom, however, is coming back.  Photos released by Xinhua show ribbons of blue-green algae edging the lake's banks like a dense film of green paint.
Hu Jiansheng,  an economist at the Jiangsu Academy of Social Sciences, said the serious pollution in Lake Tai had shocked  provincial and central government policymakers.
'The blue-green algae crisis rang  alarm bells [as officials realised] that the once widely extolled way of reaping high economic growth through a big dose of investment in heavy and chemical industries had run into a dead end,' Mr Hu said.
National  Bureau of Statistics  data shows that last year, heavy and chemical industries contributed 68.8 per cent of Jiangsu's total industrial production,   1.6 percentage points higher than that of the previous year.
The mushrooming of small mills around Lake Tai churning out paper, chemicals, textiles, iron and steel, food, drinks and wines, and an array of  other commodities have put further pressure on the  lake.
The media said  textiles, chemicals, iron and steel, paper-making, electroplating and brewing operations  accounted for 65 per cent of emissions of chemical oxygen demand, a key measure  of water pollution.
They were also the source of  63.4 per cent of  ammonia nitrogen output, a big contributor to  the growth of blue-green algae in  Lake Tai.
Untreated sewage dumped into the lake was another major factor,  according to the reports.
Apart from shutting down the heavy polluting and high-energy consuming firms near the lake, the best way to clean up the lake is to restructure Jiangsu's industry, the provincial government says.
Authorities said Jiangsu would shift its industrial footing from  commonplace processing and manufacturing industries to  advanced manufacturing and modern service businesses, including new energy and materials, pharmaceuticals, banking, logistics, conferences and exhibitions, and software.
But the province would also seek to upgrade its traditional key industries - the electronics and information sector, equipment manufacturing and petrochemicals.
The  government said it aimed to boost the output value of each  to more than  a trillion yuan by 2010.
Last year, Jiangsu  recorded a gross domestic product of 2.56 trillion yuan, up 14.8 per cent from the previous year.
'Jiangsu has a strong and reliable manufacturing base for the industrial structure upgrade,' Zhou Qin,  director of the finance department at Southeast University's Economics and Management School, said.
By the end of last year, the added-value of  manufacturing in Jiangsu  had topped  1.2 trillion yuan,  more than 10 per cent of the nation's total.
But  with most  provincial governments earmarking hi-tech and  advanced manufacturing and service industries for their future economic foundations, they  find they are aiming for the same industrial mix.
Neighbours Shanghai and  Zhejiang  boast considerable clout in the manufacturing and service industries, and are the two biggest threats to Jiangsu's plans.
But Professor Zhou said the issue could be left to market forces because the nation's huge market potential meant that each region could take its own share of the market in the near term.
'When the market gets saturated, competition between them will decide who should stay and who should leave,' he said.
But Mr Hu suggested the government should step in to avoid suicidal competition.
He used the seemingly perfect merger between Shanghai Automotive Industry Corp  (SAIC) and  Jiangsu's Nanjing Automobile Group  as a good example of proper government involvement in creating a happy marriage.
In 2005, Nanjing Auto outbid SAIC for the assets and brand of the now-defunct Britain-based carmaker MG Rover. But shortly  afterwards, SAIC bought the intellectual property rights to MG's designs.
In the aftermath, SAIC and Nanjing Auto went all out to promote car models based on MG technologies, competing head-on  with similar  products until the Shanghai and Jiangsu governments orchestrated a merger late last year.
'As long as the marriage is talked out rather than imposed, the result may not be bad,' Mr Hu said.



Lake's algal bloom forces  officials into rethink on industrial base