DALIAN - The controversial Fujia Chemical Plant in Liaoning Province, which had been ordered to shut down, initiated stop-production procedures on Monday, authorities with Dalian municipal government said Tuesday.

Although the order to stop production "immediately" was issued on Sunday by municipal authorities, the intricacies of the production cycle meant that it could not stop directly due to safety concerns.

With the stop-production procedures now in effect, no more raw materials have gone onto the production line.

The government will release the final decision about the plant in one or two days, the authorities added.

The plant is a producer of PX, a carcinogenic petrochemical used to create raw materials for the production of polyester film and fabric.

The PX plant is not horrible in itself but the critical issue is that the management, quality safeguard and risk control departments in the plant in Dalian are far below standards, said petrochemical industry insiders on the condition of anonymity.

PUBLIC INTERESTS VS ECONOMIC GROWTH

More than ten thousand Dalian residents took to the streets on Sunday demanding that the plant be relocated over concerns of potential toxic chemical leaks.

"It's a time bomb," said one of the protestors, surnamed Wang.

Calls to relocate the plant mounted after large waves whipped up by tropical storm Muifa breached a dike near the plant earlier this month.

The dike was built to protect the plant from floodwaters. Residents have been concerned that a flood could damage the plant and cause it to release toxic chemicals.

The plant, one of China's largest PX producers, went into operation in 2009 and is capable of producing 700,000 tonnes of the compound annually, according to the company's website. The plant contributes 2 billion yuan (about 311 million U.S. dollars) to the local government in taxes every year.

The PX plant was a priority development in Liaoning, as part of a massive campaign to revitalize China's rusty old industrial belt in the northeast.

Since June 2009, Dalian residents have occasionally gathered in the city's square to protest the local government's move to accept the plant, after the coastal cities of Shanghai, Xiamen and Qingdao had all rejected it due to environment concerns.

Internet users in Dalian complained Monday on the Chinese Twitter-like service Sina Weibo that, "as a beautiful coastal city like Xiamen and Qingdao, Dalian is not suitable for new chemical factories."

Protestors on Sunday said that Dalian would be ruined if there was a major accident at the plant. But the local government hadn't listened and it took GDP growth and tax revenue as the priority.

UNPRECEDENTED WARNING

The decision of Dalian government to shut down and relocate the Fujia chemical plant eased the citizens' tension to some extend. But they still worry about the undisclosed relocation timetable and where will the factory be located.

The petrochemical is an industry with both high energy-consumption and high emissions, as well as one with safety risks, said an anonymous professor with the Dongbei University of Finance and Economics, located in Dalian.

An oil pipeline exploded near a Dalian crude oil storage port in July last year. The explosion caused an oil spill of at least 60,000 tonnes, contaminating the sea waters which may need decades to recover its ecosystem.

The explosion gave Dalian people an unprecedented warning. A municipal government official said it was fortunate for Dalian that the explosion did not ignite the PX and crude oil storage tanks nearby.

The highly centralized layout of plants, especially those which is so close to the city, will no doubt seriously affect the urban environment. However, the issue was apparently not one of the local government's priorities, he said.