Where ‘Guanxi’ Rules

This was despite the fact that Chen's other plants in Xiamen had already been cited for repeated emissions infractions—a point noted in the recent assessment. Residents of Wencuo say they have complained for years to officials about exhaust fumes, leaks, and the odor of vinegar coming from a nearby Xianglu plant. The controversy over the PX factory began when Zhao Yufen of Xiamen University organized a petition to Beijing warning of a slew of potential hazards, including leaks, explosions and increased risk of cancer and birth defects. Executives on the PX project countered that the plant is safe and denied any string-pulling by Chen, officially a company "adviser." And they recently brought a defamation suit against Zhao and a colleague for allegedly exaggerating the dangers. "We hope this will clarify the matter," says one company official.

Authorities have good financial reasons to approve the plant; local officials boast it will double Xiamen's GDP. With presidential elections coming up in March in Taipei, however, political concerns may be predominating. Beijing is treating everything Taiwan-related especially carefully, says Zhang Wensheng of Xiamen University. It has even reached out to Taiwan's opposition Kuomintang Party, to which Chen has been a major donor.

The final go-ahead for the PX plant could come within weeks—barring another big public backlash, that is. Still, the city is taking no chances; it has detained about a dozen protesters and muzzled Web forums. Lian Yue, a prominent blogger, recently wondered how Chen could "repay good with evil" after the "Xiamen people gave him the opportunity to rebuild his fortunes." The answer is that it's Beijing, not locals or green activists, that will determine Chen's opportunities on the mainland.

With Melinda Liu and Wang Zhenru in Beijing and Jonathan Adams and Jackie Lin in Taipei

With Melinda Liu and Wang Zhenru in Beijing and Jonathan Adams and Jackie Lin in Taipei

© 2007