Mexico has shut down the construction of a Chinese mega-mall project in Cancun following allegations that it was causing damage to the environment.

The multi-million dollar Dragon Mart mega-mall project would have been the largest venue for Chinese goods in the West.

But a report by Mexico's environmental protection agency revealed that the project had done serious damage to the area's beaches and protected flora and birds.

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More than 370 acres of mangroves south of Cancun's white beaches have been razed.  Aside from  the shut down, Mexico also imposed a fine of about $1.5 million on Dragon Mart developers. 

Guillermo Haro, federal prosecutor for environmental protection, said they've determined "with all clarity that the activities the developers were conducting have deteriorated, impacted and damaged conditions of ecological balance, forest ecosystem and biodiversity of the zone."

The mega-mall is the second huge project involving the Chinese that Mexican President Enrique Peña Nieto had canceled in less than three months.

It was the federal government that initially gave the project a go signal, but environment officials said the government had erred. 

The project is expected to house more than 3,000 spaces for Chinese products, including electronics, software, toys, clothing, home supplies and other goods. 

Local industrialists opposed the $200-million project saying cheap Chinese wares have no place in their market.

Dragon Mart developers insist Mexico is missing out on a profitable opportunity. Aside from the economic boost, Mexicans will have the chance to find jobs.  People all over the Americas - from Canada to Argentina, would have had easy access to vast quantities of Chinese products, through the Cancun Mega-mall.  They say, Cancun has more than 10 million visitors annually.

The project, financed by a consortium of Mexican developers and a Dutch-registered company, was run by a Chinese businessman. It also had plans to build a housing project within the complex, to accommodate about 700 Chinese nationals

TagsMexico, chinese goods, mega-mall