China works hard to resolve energy problems

Aug 09, 2006 02:00 AM

The soaring economy does create difficult puzzles one after another to the Chinese government. At the moment, energy saving is one of the difficult tests.
From 1980 to 2000, China successfully controlled its growth rate of energy consumption within 1/2 of its economic growth, which means, when GDP doubled twice, the energy consumption only doubled. However, from 2001 onwards, this positive trend has changed.

As a result of China entering a new growth platform after it escaped the shadow of the Asian financial crisis, her growth rate of energy demand exceeded the growth rate of GDP, reaching 1.5 times of it. The current round of growth resulted from a massive investment initiated by positive fiscal policy.
A lot of money has been put into infrastructure and heavy industry, thus stimulating a large consumption of energy and raw materials. In the first half of this year, China's GDP growth reached 10.9 %. The growth rate of fixed asset investment soared.

The Chinese economy is still moving fast along the track of urbanization and industrialization. Although there is no necessary direct link between the high economic growth and energy cost, it is not easy to find effective channels and methods to lower down the energy cost for the time being when China's economic restructuring is far from complete and the growth pattern has just started to change.
After years of exploration and research on the mode of economic growth and development path, the Chinese government has attached more and more importance to sustainable development and has accelerated in building an energy-and-environmental-friendly society.

In the "11th Five-Year Plan" Outline, the government set up a binding target for a 20 % of decrease in unit GDP energy consumption. This year, the government proposed to reduce the unit GDP energy consumption by another 4 % as its annual goal.
However, despite the serious attitude of the government by announcing binding indicators, the implementation of the outline is not satisfactory. According to the report on energy consumption, the actual energy consumption in the first half of the year actually increased. This grim reality not only exerted pressure on the energy-saving tasks for the second half of the year, but also made people more worried about whether the target of the "11th Five-year Plan" can be achieved.

The severe reality forced the government to take extraordinary measures. The central government has introduced a dozen guidance documents in a row for restructuring those industries with excessive investment. Quite a few of these industries are high energy-consumption industries.
Recently, the National Development and Reform Commission (NDRC) signed contracts of job responsibility with local and central enterprises, by which means distributing energy consumption quota and pressure to different levels. It has been an effective means for the government to fulfil the targets through implementing administrative measures.

Of course, this tradition is also facing challenges. Different from the central government, local governments have shown continuous enthusiasm in investment and projects. It seems that they have much higher motivation in achieving GDP growth rather than fulfilling the energy-saving goals. Although the effectiveness of this measure is unknown, the central government will certainly go further than responsibility pledges.
Experts suggested that in order to achieve energy efficiency goals, the most important thing for the moment is to increase the intensity of policy, strengthen supervision, implement strict accountability regulation and give sanctions to the areas and enterprises that fail to reach the standard.

Reportedly, the NDRC, together with related departments, is strengthening formulating specific measures to assess the target for unit GDP energy consumption reduction and including energy indicators into local economic and social development evaluation and annual performance assessment system. Moreover, the government is also speeding up energy prices reform.
Relevant departments are working hard to improve the market adjustment mechanism for energy saving through reasonable adjustment in electricity prices, oil prices and gas prices.

The Chinese government addressed energy efficiency as an important option to solve the energy shortage problem. Government leaders have repeatedly emphasized the issue and relevant departments have introduced intensive policies.
All this evidence has proved that the Chinese government is determined to resolve this problem. The reason is simple: the sustainable development of energy is closely related to the overall situation of China's economic and social sustainable development.

Source: People's Daily Online
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