After years of sometimes confused policy in which industrial hemp was lumped together with its psychoactive cousin marijuana, the Chinese government is now actively promoting hemp cultivation as a tool for lifting rural Chinese out of poverty.

China will build multiple hemp cultivation bases in Yunnan, Heilongjiang, Gansu and Anhui provinces as well as the autonomous regions of Xinjiang and Inner Mongolia by 2020, a project that is expected to bring three million people out of poverty, according to a Shanghai Daily report citing an official from the People's Liberation Army's General Logistics Department.

Production at one of the first facilities involved in this plan went online yesterday in Menghai County in Xishuangbanna Dai Autonomous Prefecture in southern Yunnan. The hemp fiber processing factory, owned by China Hemp Industrial Holding Co Ltd, has an annual capacity of 2,000 tonnes.

In addition to being used to produce fibers for rope and clothing, hemp can also be used to make paper which is much less damaging to the environment than paper made from trees. Aside from causing deforestation, tree paper is bleached with toxic chlorine bleach. Hemp paper can be bleached with less environmentally harmful hydrogen peroxide.

Industrial hemp can also be used to produce fuel, biodegradable plastics, construction materials and health foods.

The government in Xishuangbanna now provides farmers with free hemp seeds plus technical training. According to the prefecture's party chief Jiang Pusheng, there are nearly 10,000 farmers growing hemp in the area, farmers who through hemp cultivation stand to double their annual income from 2,000 yuan (US$293) to 4,000 yuan.

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