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How China's push for cleaner air backfired against Xi Jinping

[BEIJING] As the icy winds of northern China seeped through Liu Yinguang's single-pane windows, the new gas-fired heater in the kitchen sat idle: there was no gas.

The 59-year-old labourer was among hundreds in Lirangdian village, south of Beijing, who had been waiting months for gas since the Communist Party banned coal to ease the region's infamous smog. When Mr Liu complained that his 8-year-old grandson couldn't sleep through nights as cold as minus nine degrees Celsius, one local official told him to "wait patiently". Authorities eventually relented earlier this month and let villagers burn coal again. But Mr Liu's anger was still fresh during a visit to Lirangdian on Friday.

"The regular people are at the bottom of society - the peasants are the lowest," he said. "The party is on top."

Mr Liu and his family sit on the front lines of China's biggest policy reversal since President Xi Jinping secured a second five-year term in October and pledged to unleash an "iron hand" against pollution.

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Across the country, officials obediently banned coal - causing natural gas sales to surge 19 per cent this year through October - before backtracking as they struggled to find supplies and connect villages to a centralised gas pipeline network.

The episode exposes a potential pitfall as Mr Xi amasses greater power to force reforms through China's vast bureaucracy: Change can sometimes happen too fast. While residents of wealthier Beijing breathe cleaner air, the heating shortages risk undercutting Mr Xi's promise to improve the lives of the poor.

Over-Implementation

"People are really gung ho about implementing central mandates right now, and that's just as big a problem as being intransigent," said Andrew Polk, co-founder of research firm Trivium China in Beijing. "It used to be under-implementation that was the problem. And now it's over-implementation." 

A similar problem arose last month in Beijing when the municipal government urged greater care after its mass evictions of migrant workers - a move that helped fulfill Mr Xi's push to cap the capital's population at 23 million - generated criticism on social media. 

The heating mess was exacerbated in part by a July order from the National Development and Reform Commission tying the performance of local officials to their success replacing coal with gas. An official from Hebei province - where Liu Yinguang lives - told the China Youth Daily newspaper on Dec 12 that local authorities had overshot their target of getting rid of coal heaters in 1.8 million rural households by more than 700,000.

Faxes requesting comment from the Hebei provincial government and the local Langfang city government, which has jurisdiction over villages in the area, went unanswered Tuesday.

The speedy shift overwhelmed a country that got just six per cent of its energy from natural gas in 2015, compared with 64 per cent from coal, according to BP. The resulting shortages drove up fertiliser costs, slowed factories and forced state-run energy companies to send gas trucks some 2,300 kilometres to restore heat to homes.

"What the government failed to consider is the complexity of gas-infrastructure installation and farmers' ability to afford such fuel," said Tian Miao, an energy specialist at Everbright Sun Hung Kai, a wealth-management firm in Beijing. "Everybody wants blue skies in the capital city, but it cannot come at the cost of low-income farmers in neighboring provinces."

Even now the government is pushing ahead, unveiling a plan Wednesday to cut coal use in 14 northern provinces by about nine per cent by the end of 2019.

Crappy Village

On a 250-kilometre drive around greater Beijing on Friday, Bloomberg News found a wide disparity in the adoption of natural gas. Residents nearest to the capital, which has more developed natural gas networks, were enjoying cleaner heat even though their energy bills had more than doubled.

"I'm worried about the shortage of supply," said Zhang Lianyin, 52, in Beijing's Tongzhou district. "Now it's OK, but who knows what will happen in the future?"

The situation worsened as Beijing's skyscrapers receded further over the horizon. About 140 kilometres south of the capital in Lugezhuang village, the frozen ground prevented work crews from laying more natural gas pipes.

Retired farmer Zhang Shufang, 67, burned coal for heat even though she had paid 4,000 yuan (S$815.8) earlier in the year to have gas pipes installed.

"There are no cadres here," she said. "No one cares about this crappy village." No Gas

In Lirangdian village, Liu Yinguang still hadn't received a start date for his gas service. The family paid 1,200 yuan to install gas heat earlier this year, when local authorities were running coal checkpoints and fining residents as much as 2,000 yuan for violations.

The company responsible for the installation, Bestsun Energy, lost his documents, Mr Liu said. Telephone calls and emails to the company went unanswered this week.

At the Bestsun service centre near Mr Liu's home on Friday, two employees could be seen wearing long, down coats as they answered calls from customers. An air conditioner blowing warm air was the room's only visible source of heat.

The employees complained that it was cold: They didn't have gas either.

BLOOMBERG