SHANGHAI, China —  A chemical plant that provoked vehement protests from Xiamen residents worried over potential health hazards will now be built in a less populated area, China's Environment Ministry said.

The 18.74 billion yuan ($2 billion) paraxylene complex will be built in Zhangzhou, a city west of the southeastern Chinese port of Xiamen, according to an Environment Ministry announcement released Tuesday.

Original plans to build the paraxylene plant closer to Xiamen, a city of 1.5 million, triggered protests over possible risks from the toxic chemical, which is used in printing and to make polyesters and paints.

Along with the paraxyline, or PX, plant the ministry also approved a factory that will use paraxylene to make purified terephthalic acid, or PTA, which is used in polyester coatings and resins.

The paraxylene plant will have a annual capacity of 800,000 tons while the PTA factory's capacity will be 1.5 million tons, according to the ministry's statement.

Short-term exposure to paraxylene can cause eye, nose or throat irritation in humans, according to the U.S. Centers for Disease Control and Prevention. Chronic exposure can affect the central nervous system and cause death.

The project by the Tenglong Aromatic PX Co. and its sister company Xianglu Petrochemical Co. was suspended for months after government advisers joined residents in lobbying the government not to locate the plant in densely populated Xiamen.

In 2007, thousands of residents gathered in the streets, rallied by cell phone text messages, to voice their concern.

The Environment Ministry's statement did not include any commentary or other details, though it listed the amount of energy and emissions expected in a summary of its impact assessment.

According to the state-run newspaper China Daily, the chemical complex will be built 80 kilometers (50 miles) from the city center. Plans initially called for it to be 16 kilometers (10 miles) from Xiamen, with homes as close as 1,500 meters (about one mile) away.

The report cited local officials as saying that the project would give a huge boost to the area's economy, which has long lagged behind other coastal regions.

However, opinions still appear divided, with some questioning whether economic growth should come at any cost.

"Environmental protection should not yield to economic growth. This is an important aspect of sustainable development," said a commentary in Wednesday's Beijing Youth Daily, another state-run newspaper.

Local authorities were preventing residents in Zhangzhou from protesting, the Hong Kong-based newspaper South China Morning Post reported, citing residents who said officials were trying hard to win public support for the plan.

The ministry reported Wednesday that it rejected 156 projects, worth 473.7 billion yuan ($69 billion), last year because they were deemed too energy-intensive or polluting, the official Xinhua News Agency said. It said 579 projects were approved.

About 15,000 companies were punished for pollution violations, the report said without providing details.

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