Discontent has been growing among laid-off workers, and some are seeking redress from local governments for the way environmental protection has changed their lives.
"People here must stop the water from being contaminated, but they also have the right to make a living. It's hard to strike a balance," said a government official in Danjiangkou City who spoke on the condition of anonymity.
"The investors we turned away have gone to other provinces. That's why we are falling behind economically," he added.
The city, which has a population of 440,000, used to be one of the top 20 county-level economies in Hubei. Since the water diversion project began, however, it has fallen to 41st on the list, according to the city government.
While the tough measures to protect water quality have worked, economies in the headwater regions are not developed enough to be able to create new sources of revenue.
Water quality in the Danjiangkou Reservoir has now reached Grade II, the mandatory standard for the project. But nitrogen and phosphorus are still accumulating in a number of inlets.
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