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The Chinese government will invest 55 billion yuan (US$6.88 billion) to settle residents relocated by the Three Gorges Project and support local industries to provide enough job opportunities in the next five years.

The fund will also be used for infrastructure construction, environmental protection, and social development undertakings in the region, said a senior official of southwest China's Chongqing Municipality.

Investigations have revealed the unemployment rate in areas around the Three Gorges Reservoir was as high as 11.5 percent last year, despite a drop of 1.3 percentage points from 2005, said Wang Hongju, mayor of Chongqing,

Over a million residents have bid farewell to their hometowns and resettled because of the construction of the three gorges project.

The municipality joined hands with the China Development Bank to invest 2 billion yuan to establish a company that offers guarantees to private enterprises in the areas, said Wang at a press conference on Tuesday.

Special funds have also been set up by the municipality to support new private enterprises, including foreign-funded ones, that enter the areas, while the country has designated coastal economically developed provinces to help districts of the reservoir area.

"We must make sure that the life of the relocated residents will get better day by day instead of stagnating at the same level," said Wang.

In the reservoir area, out of 1.13 million relocated residents, 1.02 million were settled by the end of 2006, said Zhang Baoxin, a senior official with the Office with the Three Gorges Project Construction Committee of the State Council.

The Three Gorges Project will benefit the country in flood prevention, water transport and power generation, but in turn offers a challenge to the local government in terms of environmental protection as well as resettlement of relocated residents and industrial development in the reservoir area, said Wang.

The Three Gorges Project, the world's largest water control facility, is located on the middle reaches of the Yangtze River, China's longest and one of the most important inland waterways for shipping in the country.

Launched in 1993 with an estimated total cost of 180 billion yuan (US$22.5 billion), the Three Gorges Project will have 26 generators able to create 84.7 billion kwh of electricity annually.

(Xinhua News Agency February 28, 2007)