GUIYANG - Moving away from her house after living there for decades, Chen Liangying waved a long goodbye to Moutai, both the name of her hometown and China's "national liquor".

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"It takes just three minutes from my house to get to the distillery. The mild fragrance of wine is even integrated into  our lives," said Chen Liangying, 57, a resident of Moutai town, in the city of Renhuai in Southwest China's Guizhou province, which enjoyed a long history of wine making.

The local government relocated Chen and about 16,000 local residents in Moutai town to a new residential zone in Renhuai, to protect the unique environment of the beverage's high quality in the old town.

The distillery of Moutai occupies three-fifths of the old town area, which is five square kilometers. The micro-environment of Moutai, including the water source, microflora, vegetation and geological environment, all contributes to the unique taste and quality of the world famous wine.

In Moutai, the brewing plants and the office building of Kweichow Moutai were even merged among the randomly built residential houses.

"Some people from outside the area longing for the Moutai secret may have the first impression of 'fragrance Moutai Wine, dirty Moutai Town' when they walk in the town," said Wang Zhaoda, the chief official with the Moutai Town.

In fact, there are about 49,000 people living in the small old town, and 15,000 among them are living nearby or mingled in the brewery zone.

The climate and vegetation in the town of Moutai is quite unique, which contribute to the taste of the liquor. Moutai is classified as "sauce-fragrances" for it offers an exceptionally pure, mild and mellow soy sauce-like fragrance that lingers after drinking.

However, a worsening environment could pose a severe threat to the sustainable development of Kweichow Moutai, he noted.

Kweichow Moutai Co Ltd, the liquor producer, announced that over the next five years it would increase its annual production of base liquor by 20,000 tons, which is almost 87 percent over its 2009 output level.

Today's Moutai wine originated during the Qing Dynasty. Crowned as China's national wine, Moutai has been appointed as a state banquet staple for feasts with foreign heads of state and distinguished visitors.

Its international prominence grew when Premier Zhou Enlai presented the liquor to entertain Richard Nixon at the state banquet during the US presidential visit to China in 1972.

However, densely polluted Moutai Town faces an air pollution problem and suffers from a water shortage, which have hindered the distillery's expansion and threaten the liquor's quality, said Liu Qiang, chief of the environment department of Kweichow Moutai.

Moutai town plans to gradually move away the nearly 16,000 residents living nearby, or in the brewing zone of Moutai, to the residential area of "New Town of National Liquor" under construction in the nearby Renhuai city.

"We may have to adjust to living in a new place," said Wang Faqiang, a middle aged taxi driver living in the town.

Wang said the Kweichow Moutai company may not let us "suffer great losses". Except for the new apartment, the local government and the company would compensate the relocated shops' owners with new stores.

In the next five years, the relocated Moutai residents and the staff of the company will move to the new residential area. Both the local government and the company will fund the relocation of local residents.

Except for the relocation project, the local government has spent about 3 billion yuan (about $439 million) to protect the safety of the environment of the Chishui River, the water source for Kweichow Moutai.

By 2015, the residential population of the Moutai Town will be kept to within 15,000. It will take about 5 billion yuan (about $750 million) for the entire environmental improvement and relocation project.

"It will take me only ten minutes from my new apartment to return to the old town. I will be back when I miss it," said Chen.