Hebei is a northern province of the People's Republic of China (PRC). "Hebei's industrial structure is dominated by traditional capital-intensive resource processing industries that are state-owned, generate limited employment, and are heavy polluters. It has remained a largely underdeveloped province, with limited economic, social, technological, or political linkages with Beijing and Tianjin, despite proximity to these major cities." It is also the case that "7 of China’s 10 most polluted cities are located in Hebei, which consumes more coal than all but one other province".
The province suffers from "undeveloped urban-rural linkages, underinvestment, weak urban management, and significant deterioration of the natural environment, including the depletion of water resources". The last of these provided one more environmental challenge to both central government and the Heibei provincial government.
The chosen approach was for the central government to collaborate on an environmental project with the ADB. "In 2008, the ADB and the PRC government designed the Hebei Small Cities and Towns Development Demonstration Sector Project, which focused on supporting sustainable urban development and consisted of a number of sector interventions primarily targeted to support industrial development, tourism, job creation, and environmental protection. The main sectors were water and wastewater, solid waste management, upgrading and greening of rivers, and district heating."
The main objectives of the project were to:
- "Attract investment, especially in labour-intensive industries and services.
- "Provide a decent urban environment to residents by substituting energy-efficient centralised heating of household coal-burning, collecting and treating wastewater before discharge into the environment, and introducing sanitary practices and recovery of recyclables in solid waste management.
- "Strengthen urban management capacity in planning, implementation, and operation.
- "Extend the benefits of growth to all residents by improving the coverage and quality of basic municipal services to households across the socioeconomic spectrum."
The project funding was intended to help promote a more sustainable approach to the province's environment. "The proposed ADB financing offers the cities and towns from the poorer counties of Hebei in the north and west of Beijing the opportunity to develop their infrastructure that will enable investments in natural resource processing, manufacturing, and services."
The public impact
The public impact of the Hebei Small Cities and Towns Development Demonstration Sector Project is "sustained socioeconomic growth and improved health and living conditions". The project brought improvements in a number of environmental areas:
- "In 2012, there were 320 days designated as having good air quality, while the average for the entire Hebei province was 340 days.
- "The project has helped bring back clean skies ... for the whole of the Beijing-Tianjin-Hebei region.
- "For more than 13,000 households in the area, there is no longer a need to burn coal to generate household heating in winter, and 146 small coal-fuelled boilers were closed down. It will reduce burning of 420,000 tons of coal and reduce SO2 emission of 6,900 tons annually.
- "About 800,000 people are benefiting directly from the project, which has improved the standard of living through fresh drinking water, cleaner urban environment, and a reliable heating supply."
Stakeholder Engagement Strong
There were an number of stakeholders engaged in the project - the ADB, the PRC government, the Hebei provincial government, local government in the small cities and towns (which numbered roughly 10) and specialised agencies for functions such as monitoring, and contentious issues such as "involuntary resettlement".
The local government officials also consulted local people about the potential impact of the project. "Extensive consultation was carried out during project processing phase. Stakeholder analysis was conducted
during the poverty and social assessment. Various methods and approaches were employed, including
participatory rural assessment, a socioeconomic sample survey of 400 households, four stakeholder
consultation meetings and workshops, 15 focus group discussions, and 14 key informant interviews."
Political Commitment Good
There was a support from the PRC government, the Hebei provincial government (HPG) and the local administrations in the small cities and towns in designing the policy and providing the necessary funds for the project. It was seen as central to their policy objectives in that it offered greater social inclusiveness, extending "the benefits of growth to all residents by improving the coverage and quality of basic municipal services to households across the socioeconomic spectrum".
Clear Objectives Strong
The project's environmental objectives were clear, covering energy-efficient heating, eco-friendly wastewater treatment and fresh drinking water supply, and more efficient and widespread recycling in the target small cities and towns in Hebei. It was intended to lead to a greener environment and to extend these benefits to "all residents by improving the coverage and quality of basic municipal services to households across the socioeconomic spectrum". About 800,000 people were intended to benefit directly from the project through an improved standard of living and a healthier lifestyle.
Many surveys were conducted before and during during the implementation phase and the results were adopted in the implementation. "Prior to implementing the project, public consultation and information disclosure [was to be ] undertaken within the project area... Further public consultation with all stakeholders [was to] be carried out during implementation, including meetings to address specific problems if such work has been suggested through internal and external monitoring." 
Evidence was taken from "reliable sources like Provincial and Municipal Environmental Protection Bureau reports, provincial, city, and county statistical yearbooks, the Provincial Poverty Relief Office... [and] municipal government health bureau data on drinking water quality and the incidence of infectious diseases". 
In addition, "to gather more evidence, several surveys were also conducted before and during the implementation phase: Annual socioeconomic surveys... [and] baseline perception surveys were conducted in sub-project cities and towns, etc".
Policymakers evaluated the human resource and financial constraints before the implementation of the project by assessing the institutional capacity that could provide support during the project.
The ADB played a pivotal role in providing the necessary financial support for the project. "The proposed ADB financing offers the cities and towns from the poorer counties of Hebei in the north and west of Beijing the opportunity to develop their infrastructure that will enable investments in natural resource processing, manufacturing, and services."
There were legal and logistical issues related to resettlement, and there were many feasibility studies for potential land acquisition and resettlement impact that were conducted during the design phase. "For human resources feasibility, for each sub-project, the policymakers assessed the institutional capacity and resources capacity of implementation agencies before the implementation phase."
There were also financial constraints on resettlement. Policymakers needed to be assured that "funds were arranged in systematic manner and all the payment and usage of compensation funds were carried out under the supervision of the internal monitoring agencies, with regular review by the external monitoring agency".
There were clear management mechanisms in place in the project, particularly at provincial level in the Hebei Project Management Office (PMO) and the local PMOs. "It included provision for funding for 154 person-months of international and national consulting services to support the Hebei PMO, city and town PMOs... in project implementation and management and institutional capacity development... Capacity development for the PMOs will be achieved through consultant inputs, training courses by specialised institutes and firms, in-country and/or overseas study visits, and the acquisition of training equipment financed from the loan."
The measurement includes a well-developed monitoring system with internal and external processes to measure the impact of the project. The main indicators were:
- The degree to which "water quality of drinking water sources improved from Class IV to Class II.
- "Total COD discharged.
- "SO2 in the air.
- "Incidence rate of waterborne diseases in direct project beneficiary areas.
- "Public satisfaction for services in water, wastewater, solid waste management and heating."
There was also precise measurement of the impact of involuntary resettlement. "The physical and economic displacements identified show that the construction of the three core sub-projects will affect 37 households or 196 people with permanent land acquisition, 30 households or 137 people with the demolition of residential structures, and four small shops with 13 employees."
The main funding agency was the ADB. The implementing agencies were the HPG, the Hebei Provincial Finance Bureau and the local governments concerned, who were responsible for ensuring "that the sub-project implementation procedures were consistent with the ADB requirements, including those in
terms of environmental protection and social security". 
They were also required to follow the ADB procurement guidelines, another factor ensuring that they were aligned with the overall project goals. The local people were consulted about the project, and many benefited from it through the environmental improvements, although the mandatory nature of the resettlement indicates a certain lack of alignment.