Published by ChinaMNC · Huoshan

China Compliance Alert: Anhui Closes Out 'Two High' Project Rectification—What Foreign Founders Need to Know

A government notice from Lu'an City, Anhui Province, confirms completion of rectification for improperly launched high-energy, high-emission projects. Foreign founders should understand the enforcement context and compliance expectations for industrial investments in China.

Overview: Anhui Completes Rectification of 'Two High' Project Violations

A public notice from the Lu'an Municipal Government in Anhui Province announces that a problem identified by the Third Central Ecological and Environmental Protection Inspection—specifically the blind launching of "two high" (high energy consumption and high emission) projects—has been rectified and passed verification. The notice is part of a formal closure process under Anhui Province's environmental rectification rules.

For foreign founders considering manufacturing or industrial projects in China, this notice illustrates how environmental and industrial policy violations are detected, enforced, and resolved. It also shows the compliance mechanisms that local governments are expected to maintain.

What Were the Specific Violations?

The notice describes two main violations that occurred in other cities in Anhui:

• Flat glass project without capacity replacement: Under a 2017 Ministry of Industry and Information Technology measure, new industrial flat glass projects with daily melting capacity exceeding 150 tons must carry out capacity replacement. A company in Suzhou City built a 300-ton-per-day production line in 2019 without doing so. In April 2020, the Ministry publicly criticized the company for failing to conduct capacity replacement and for being unable to provide a replacement plan. To circumvent the policy, the company re-registered the project as a 150-ton-per-day line without making substantive changes to the furnace or melting capacity, and continued illegal production for a long period.
• Caustic soda project despite restriction: Since 2011, China's National Development and Reform Commission has listed caustic soda as a restricted industry, prohibiting new production facilities. Nevertheless, in 2024, a chemical company in Bengbu City illegally built six caustic soda production units with a combined new capacity of 150,000 tons per year.

These cases highlight the government's attention to capacity replacement rules and restricted industry catalogs. Foreign founders should note that China's industrial policy categorizes projects as encouraged, restricted, or prohibited, and non-compliance can lead to public criticism, fines, and forced rectification.

Rectification Measures and Completion Status

The rectification was led by the Lu'an Municipal Party Committee and Government. Key measures included organizing a citywide investigation of "two high" projects for capacity replacement compliance, and drafting an implementation plan to effectively control high-energy and high-emission projects. The target was to complete rectification by the end of June 2026.

According to the notice, the following actions were completed:

• Citywide investigation: Lu'an conducted a thorough review of "two high" projects for capacity replacement compliance. It found no cases of underreporting, concealment, or projects filed without meeting capacity replacement requirements.
• Improved management mechanisms: The city formulated a division of key tasks for controlling high-energy and high-emission projects, established a joint demonstration mechanism for "two high" projects, and committed to strict joint assessment and source control.
• Special inventory and reporting: Lu'an carried out a special survey, compiled a list of "two high" projects, and reported it to the Provincial Development and Reform Commission. Projects under provincial management have been uploaded to the provincial dual-carbon integrated management platform in three lists: existing, under construction, and proposed.

The notice states that the rectification has passed verification. It also invites objections during a 10-working-day public notice period from October 8 to October 20, 2026, directed to the Provincial Development and Reform Commission, which leads the verification and supervision.

Implications for Foreign Founders

This notice is a reminder that China's environmental and industrial policies are actively enforced, and local governments are held accountable for rectifying problems. For foreign founders setting up or operating a company in China, several practical points emerge:

• Understand capacity replacement rules: If your project involves industries like cement, glass, or others subject to capacity replacement, ensure you comply with the replacement requirements. Failure can lead to public criticism and forced closure.
• Check restricted and prohibited industry catalogs: China's industrial catalog is updated periodically. Investing in a restricted industry may be possible only under certain conditions, and prohibited industries are off-limits. Always verify the current status of your industry before committing capital.
• Engage with local authorities early: The rectification process involved joint demonstration mechanisms. Early engagement with local development and reform commissions and environmental bureaus can help you understand requirements and avoid surprises.
• Maintain accurate project filings: The case of the glass company re-registering a 300-ton line as 150 tons shows that misrepresenting project details to avoid policy is treated seriously. Ensure all filings are accurate and consistent with actual operations.
• Monitor local notices: Public notices like this one provide insight into enforcement priorities. Following local government websites can help you stay informed about regulatory trends.

Conclusion

Anhui's completion of this rectification demonstrates the government's commitment to enforcing environmental and industrial policies. While the notice focuses on domestic companies, foreign founders should apply the same compliance mindset. Understanding capacity replacement, restricted industry catalogs, and local reporting requirements is essential for smooth operations in China.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

For assistance with company registration and compliance in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.