By Yu Weiliang, Lu Yanan, Tang Luwei
Robots have replaced manual labor on the production line; old workshops and smokestacks are dismantled; pilot-scale testing of nanomaterials are moving forward steadily — New quality productive forces are quietly reshaping the Chinese traditional chemical industry, including Chuyuan High-Tech Group (Chuyuan), a traditional chemical manufacturer located along the Yangtze River in Shishou, Jingzhou, central China’s Hubei province.
Once the world’s largest producer of intermediates for reactive dyes, the company is now chaired by Yang Peng, who succeeded his father and founder, Yang Zhicheng. Its rise, however, was anything but smooth.
A pivotal moment came in 2016 when Chuyuan faced a landmark environmental penalty — a fine exceeding 27 million yuan ($3.87 million) for illegal wastewater discharges. At the time, this constituted the largest environmental fine ever imposed within the Yangtze River basin.
The fine triggered a fundamental shift in mindset for both father and son. Moving from initial frustration and passivity, they embarked on a path of active rectification and development-oriented upgrading over the subsequent decade.
Today, Chuyuan’s manufacturing base spans 1,800 mu (120 hectares). Yet its origins were remarkably humble. It was established in 1982 by 30 farmers, led by Yang Zhicheng. It started with only with five small rooms and modest equipment.
After China joined the WTO, chemical plants sprang up along the Yangtze River. The company’s production capacity of H-acid, para-esters and reactive dyes ranked first in Asia, making it Hubei’s largest private exporter.
Its prominence was underscored on January 10, 2016, when the Jingzhou municipal tax bureau listed it as the city’s third-largest taxpayer, with annual payments exceeding 100 million yuan — a status achieved just before the environmental penalty reshaped its future.
On January 5, 2016, Chinese President Xi Jinping chaired a symposium on boosting the development of the Yangtze River Economic Belt in southwest China’s Chongqing municipality, also a major city along the Yangtze River.
He stressed that the Yangtze River boasts a unique ecological system. Restoring its ecological environment will be an overwhelming task and no large-scale development will be allowed along the river at present and for a rather long period to come.
Chuyuan’s long-standing environmental issues came under security and again drew the attention of environmental authorities. By the end of March that year, the Jingzhou environmental protection bureau imposed the 27-million-yuan fine, aiming to force the closure of heavily polluting and technically unreformable production lines. The scale of the penalty was rare even by national standards.
At the time, Chuyuan was a top-100 private enterprise in Hubei, employing over 4,000 people. Nearly 12 percent of Shishou’s GDP and about 60 percent of its tax revenue came from the company.
“After such contributions, couldn’t there be some leniency?” Yang Zhicheng asked himself.
He pursued legal appeals, publicized the dispute online, and encountered polarized public opinion. Yet a consensus emerged: China was enforcing environmental accountability, rejecting growth-at-all-costs development.
The local leadership made its stance clear. Then Shishou Party secretary Liu Zhongcheng pledged that no enterprise failing rectification would be allowed to resume production, and that development must not come at the expense of future generations.
Chuyuan ceased operations for remediation. After three visits by provincial officials — during which Yang evolved from avoidance to engagement — Liu conveyed a pivotal message: “Ecological priority and green development are the new norms. Clinging to outdated practices is like choosing slow trains in the high-speed rail era — you will fall behind.”
Resistance turned to reflection. “That fine was a wake-up call,” the two later admitted. “It wasn’t meant to crush us, but to awaken us.”
More than ten production lines were permanently shut down. Rainwater collection systems were built. A second-phase wastewater treatment plant was launched. Over nine months of suspension, Chuyuan moved step by step to balance development with safety.
In November 2016, the company withdrew its lawsuit and accepted the penalty. A month later, after passing official inspections, it resumed operations.
From 2016 to 2022, Chuyuan invested about 200 million yuan in environmental upgrades, reducing energy consumption by 59%. The company became one of Hubei’s first participants in the national carbon trading pilot. In May 2025, its plant obtained the highest-level certification for safety risk management.
Tempting offers came along the way. A pesticide intermediate project promised profit margins of nearly 100%. Yang Peng turned it down.
“The environmental risks were unacceptable,” he said. “Stability outweighs short-term gains.”
In Chuyuan’s plant today, reclaimed water flows clearly through on-site ponds, while emissions data are uploaded around the clock.
Still, as the chemical sector faced mounting pressure, Chuyuan no longer enjoyed its former lead. Yang Peng grew uncertain and even considered leaving the industry.
Then, in July 2023, a national conference on ecological and environmental protection was convened. Xi emphasized that “it is crucial not to dismiss traditional industries as uniformly ‘low-end’ or ‘backward’ and simply phase them out, as doing so could lead to a disruption in the transition from old to new growth drivers, cause a loss of momentum, and exacerbate the pains of structural adjustment.”
“That line hit home,” Yang said. “Transformation doesn’t mean quitting the industry. Modern life still depends on chemicals. With the right upgrades, traditional sectors can also foster new quality productive forces.”
Inspired by this, Chuyuan Group invested 50 million yuan to fully utilize waste residues and liquids, entering circular economy practices. It shut down a flagship product with hard-to-treat emissions and invested another 60 million yuan in a new chlorosulfonic acid line, achieving environmental, safety and economic gains simultaneously.
It installed biomass boilers, embraced intelligent manufacturing and put robots on the shop floor, boosting efficiency by 40 percent. Partnerships with Hubei universities helped it build a platform for transforming scientific results into applications. New synthesis processes for two reactive dyes filled gaps in domestic capabilities in related fields. High-performance nano metal materials are now moving toward mass production, with potential applications in semiconductors and other emerging industries.
Since 2024, Chuyuan has been running at full capacity. Revenue in 2025 is expected to reach about 2 billion yuan, with tax payments exceeding 80 million yuan — up 55.4 percent and 53.5 percent respectively from 2022.
Yang Peng recalled, over the past decade, new thinking served as a guiding light, the updated environmental law acted as a binding constraint, and the law on promoting the private economy provided much-needed reassurance. In his words, the rule of law remains the best business environment, and high-quality development is the only viable path forward.
