Police stood guard over hundreds of people in a tense Chinese city Wednesday, a day after authorities bowed to violent protests and cancelled plans to build a controversial metals factory. The protests in Shifang city highlighted and fuelled concerns around China over the impact of rampant economic development on the environment, with millions of Chinese closely following developments on the Internet. Shifang authorities announced on Tuesday night, after two days of clashes during which riot police used tear gas to quell thousands of protesters, that they would not build the multi-million-dollar factory. "Shifang from this day forward will not build this project," Shifang Community Party chief Li Chengjing said in a statement. Li insisted the copper factory would have brought Shifang many jobs and economic benefits, but acknowledged the strong public opposition and his government's failure to fully explain its benefits. Two people were killed in the protests, according to rights watchdog Chinese Human Rights Defenders, although the government denied anyone had died. The backdown over the factory, which came a day after the government said initially that it would only suspend construction, appeared a rare win for grassroots environmental activism in China. Incidents similar to the one in Shifang are reported regularly around China, many over environmental concerns that locals say are linked to corruption, but authorities typically quash the protests and push ahead with the projects. Some Shifang residents welcomed the government's backdown, but others expressed caution that the announcement was not genuine and only aimed at ending the protests. "I think... that because there are too many mass protests, they just want to use this method (promising to not build) to get rid of the crowds," one resident, who asked not to be identified, told AFP. "I personally think (the factory will be built), but I don't know for sure." However another resident expressed relief and said she believed the government. "We are very happy to hear the announcement that they will not build the plant any more," she said. In a sign of lingering tensions, a few hundred people continued on Wednesday to gather around the main Shifang government office where the worst of the protests had occurred, an AFP photographer witnessed. The people were not calling out, holding banners or protesting in other visible forms, but a heavy police presence stood guard around them. Elsewhere around the city of about 200,000 people, many police vehicles patrolled the streets, although there were no signs of the riot police that had sought to quell the protests on Monday and Tuesday. Thousands of people had gathered on Tuesday night to demand the release of students who had protested, according to the state-run Global Times newspaper in Beijing. In another apparent win for the protesters, the Shifang government said it released 21 of 27 people initially detained just before midnight on Tuesday. However six remained in detention and would likely face charges, according to the government. Shifang police had warned at the height of the protests that it would punish all those involved. "Anyone who has incited, planned or organised illegal gatherings, protest marches or demonstrations or those who have engaged in smashing and looting... will be punished severely," the police said in a statement on Monday.