This tiny town outside China's western city of Chongqinghas a small but vital role, to play in preventing disastrous flooding on the nearby Yangtze River, the world's fourth longest waterway.

In some areas of western China, clear cutting of tree cover has increased run-off and sparked flooding. In others, it has caused water shortages after land was cleared for intensive farming.

The forestation project aims to address years of environmental degradation, which has scarred China's west, even as the Government spurs the region to develop even faster.

China started its "Great Western Development" drive in 2000 with an infrastructure construction binge to help the lagging regions catch up with booming eastern provinces.

The roads, railway lines and airports have overshadowed the newly-planted saplings, one of just two environmental projects planned so far under the western development programme. Chongqing officials admit they are not sure how the trial forestation project will work in the long run.

Some farmers say they are against the plan, because it takes away land which could be planted with cash crops.

Old ways are hard to change. For years, Chongqing - which the World Bank says is the largest metropolitan area in the world with 43 million people - has traded development for environmental protection, dumping untreated waste into the Yangtze, and poisoning the air by burning high-sulphur coal.

City officials are finally waking up to the problem, if only because of the realisation that foreign firms are concerned with the living environment in western China, as they decide whether to invest and relocate staff to the region.

"Clearly in Chongqing, if you want to attract foreign investment, you should do something about the environment," said Mr Bruce Murray, representative for the Asian Development Bank in China. "You have to reduce air pollution and you have to have clean water." Under the development programme, China will reafforest some 343,000 hectares (847,600 acres) of land in the West, including areas in Yunnan and Sichuan provinces on the upper reaches of the Yangtze River.

In Chongqing, farmers in six counties will be paid to plant trees instead of growing grain.

The Central Government will give farmers $8.50 in cash and 150 kg (331 pounds) of grain for every mu, a traditional Chinese measurement equal to one-fifteenth of a hectare (0.17 acre).

The annual payments will last for only five years if the trees yield fruit or other products, or eight years otherwise. One of the problems with the project, has been deciding the best kind of trees to plant, which vary widely depending on local conditions.

Chongqing is experimenting with pine, fruit trees and special varieties which can provide the fragrance for perfume.

"The problem of what trees to plant is extremely difficult to solve," said Zhen Wending, a special inspector for the Chongqing Forestry Bureau. "We will look at the market."

Analysts said the switch to value-added crops or no crops at all, will speed the loss of jobs from the agriculture, leaving the Government to find work for the unemployed.

In Jian, the switch to fruit has caused many to seek jobs outside the township. Almost half of its 15,000 residents work in construction in the southern province of Guangdong or in mining coal in northern Shanxi.

"There is growing fruit or work outside," said Jian's Communist Party Secretary Peng Hongsen, as he gazed out over the slopes of orange and pear trees. Deforestation is only one of Chongqing's many environmental problems, along with air and water pollution.

The city is China's worst case for acid rain causing sulphur dioxide, which can cause new cars to rust after a year. One of Chongqing's many nicknames is the "Fog Capital", with residents saying air pollution exacerbates the problem. Around 87 per cent of Chongqing's waste water flows untreated into nearby rivers, the World Bank estimates.

Water pollution is expected to worsen after completion ofthe massive Three Gorges Dam project downstream from Chongqing, which will slow the flow of the Yangtze River and prevent natural cleaning action.

City officials promise to fight the problem by shutting 5,000 polluting firms, over the next five years and securing a $200 million World Bank loan for waste water treatment. Some are sceptical, the local Government will be able to close companies in violation, especially if they are state-owned or pay valuable taxes.But Chongqing officials said they are committed to addressing the problem.

"If there are no trees on the mountains and no fish in the river, there will be a high price to pay. We cannot go down that road," said Mr Ma Shulin, vice chairman of Chongqing's Development Planning Commission.

(Reuters)