updated 8/27/2007 2:43:48 PM ET 2007-08-27T18:43:48

China may soon slap heftier fines on polluters in a bid to clean up its filthy waterways, state media said Monday.

China's waterways are dangerously polluted after decades of rapid economic growth and lax enforcement of pollution controls.

The draft amendment to China's decade-old water pollution law would remove a 1 million yuan ($132,000) cap on fines for water polluters and allow watchdogs to levy penalties of 20 percent to 30 percent of the direct economic losses caused by a spill or pollution, the China Daily newspaper reported.

The government this year fined a chemical company the maximum penalty of 1 million yuan for spewing tons of toxic nitrobenzene and other chemicals into Songhua River in northern China in 2005. The government was forced to cut supplies of running water to millions of people.

An explosion at a chemical plant operated by a subsidiary of China's biggest oil company, state-owned China National Petroleum Corp., killed eight people and forced 10,000 more to flee their homes. The pollution forced the city of Harbin to shut down its water supply for days and sent toxins flowing into Russia.

The China Daily reported earlier that Harbin alone suffered direct economic losses of $74 million from the spill.

Under the new guidelines, the company would have faced a minimum fine of $14.8 million.

Zhou Shengxian, director of the State Environmental Protection Administration, proposed the draft amendment during a meeting of the Standing Committee of China's legislature, the National People's Congress on Sunday, the newspaper said. It did not say whether the changes had been approved or when they might be implemented.

China has some of the most polluted cities in the world after two decades of breakneck economic growth, and the government has been losing ground in recent years in trying to balance environmental concerns with economic growth. Air pollution has been a worry for Beijing as it gears up for the Games, to be held Aug. 8-24, 2008.

Despite a persistent gray haze, officials said last week an exercise that removed more than 1 million vehicles a day from Beijing's gridlocked streets was a success that could mean a clearer sky during the Olympics.

Zhou's agency reported last week that China's chemical oxygen demand, a water pollution index, rose by 0.24 percent in the first half of this year compared with the same period in 2006.

China has committed itself to cutting energy consumption by 20 percent per unit of gross domestic product, along with a 10 percent cut in major pollutants, between 2006 and 2010.

China failed to hit the initial targets for those goals last year.

Meanwhile the official Xinhua News Agency reported that about 10,000 dead fish were seen floating in a river over the weekend in Beijing's historic Yuanmingyuan park, also known as the Summer Palace.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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