China's top leaders have decided that reining in a red-hot
economy on the verge of overheating will be a priority in 2008, a
year that they say is crucial to meeting the 2006-2010 targets of
saving energy and reducing greenhouse gas emissions.
The targets will help China prevent its economy from overheating
and achieve sustained development, said Xie Zhenhua, deputy head of
the National Development and Reform Commission (NDRC).
"It is like shooting two hawks with one arrow," said Xie, who is
heading China's delegation to this month's global climate change
meeting on the Indonesian island of Bali.
The just-concluded Central Economic Work Conference that
gathered China's top economic planners together, highlighted the
need to save energy and reduce emissions, saying it is a key to
"scientific development", a phrase that refers to efficient and
sustained growth.
For the first time in history, China's decision makers allowed
such a growth pattern to take precedence over the speed of
development.
"At present, the core of the problem is not the speed, but the
quality and pattern of growth," said Cai Zhizhou, a statistics
expert at Beijing University.
Though it was not obligated by the Kyoto Protocol, under which
36 industrial nations must cut emissions by five percent below
their 1990 levels during the 2008-2012 period, China has set its
own target of reducing energy consumption for every 10,000 yuan
(US$1,298) of GDP by 20 percent, with emissions set to drop 10
percent.
Investment boom
Even though consumer spending is playing an increasing role in
economic growth, fixed asset investment remains the biggest
contributor to growth. China's economy is expected to expand 11.5
percent this year, fuelled mainly by investment which rose 27
percent in the first 10 months.
Due to strong domestic demands and soaring energy prices on the
international market, a large portion of the investment is going to
such high-energy-consuming and pollutant-discharging industries as
construction materials, petrochemicals, chemicals and nonferrous
metals.
Investment in these four sectors grew at a blistering 42.9
percent on average in the first ten months - a reason why China
finds it difficult to meet its saving-energy and reducing-emissions
targets.
"The risk of overheating lingers as investment still faces great
upward pressure," said NDRC head Ma Kai. "The situation of saving
energy and reducing emissions is still grave."
Last year, energy consumption fell 1.33 percent, only a third of
the annual goal of four percent. Both emissions of sulphur dioxide,
a cause of acid rain and chemical oxygen demand (COD), a measure of
water pollution, were increasing.
Of the 30 administrative regions with figures available, all but
Beijing missed the 2006 target of reducing energy consumption. To
gear up for the Olympics next year, Beijing achieved a 5.25-percent
drop.
A total of 12 regions, mostly those relying heavily on heavy
industries and fixed asset investment, cut their energy consumption
by less than three percent.
The failure made it even more difficult to meet the five-year
targets and China must accelerate its industrial restructuring,
said Xie, adding that some regions are still pursuing economic
growth as a mandatory objective, at the cost of the
environment.
A challenge but a must
While struggling to cool the investment boom that is fuelling
its economy, China has to keep the economy growing fast enough to
improve 1.3 billion people's livelihoods and boost employment and
domestic demand.
Most industrial nations did not deal with the environment until
they had achieved some prosperity, while China has to act right now
when it is still in the middle of development because the most
populous nation on the planet cannot afford to waste or pollute,
said Zhou Dadi, an energy expert with NDRC.
"If we don't change the manner in which we are developing, it
will in turn hinder us from making more progress in the future,"
said Zhang Yongjun, an economist with the State Information
Center.
China is consuming its natural resources at a pace even faster
than its sizzling economic boom. To produce 5.5 percent of the
world's GDP last year, China burned through 15 percent of the
world's coal consumption and used 30 percent of the world's steel
and 54 percent of its cement.
As the booming economy's voracious energy demands kept growing,
China became a net importer of oil during the 1990s, and now 47
percent of the country's consumption relies on imports.
After three decades of fast economic growth, China has some of
the most polluted cities in the world and the country's major lakes
- Taihu, Chaohu and Dianchi, which are water sources for millions,
have been contaminated by algae blooms, which eat up oxygen in
water which in turn leads to the deaths of water creatures and
makes the water undrinkable.
Premier Wen Jiabao said earlier this year that "Without an
efficient method of economic growth, China's natural resources and
the environment will not be able to sustain its economic
development."
Meanwhile, as China has become one of the two biggest carbon
dioxide emitters, along with the United States (and according to
one Dutch report China is already the world's largest producer of
carbon dioxide) it is coming under domestic and international
pressure to do more to cope with environmental problems.
Turning point
The central government has spent a total of 23.5 billion yuan in
saving energy and reducing emissions this year. It ordered that
progress in environmental protection be a key standard by which
officials and company heads are judged.
Those who don't meet the targets could be prevented from
promotion, while failing provinces and companies would not get
approval for high energy consuming projects, it said.
The government even told officials to keep indoor temperatures
below 21 centigrade degrees in winter, use energy-saving elevators
and purchase Chinese-made fuel-efficient cars with manual
transmission.
In July, China scrapped export tax rebates on more than 500
products to curb high-energy-consuming and pollutant-discharging
industries and exports of key natural resources.
China is also closing inefficient coal-fired power units and
outmoded steel plants, in an effort to save hundreds of millions of
tons of coal and water and cut emissions by millions of tons a
year. Banks are warned against lending to non-environmentally
friendly projects.
All these efforts are starting to yield results, Xie told a
press conference last month where he announced that China's energy
consumption per unit GDP fell three percent in the first nine
months, while both sulphur dioxide emissions and chemical oxygen
demand dropped.
Zhang Lijun, deputy director of the State Environmental
Protection Administration, said that "this year will be a turning
point in China's pollution control."
"A lot of progress has been made this year but more should be
done," said Xie.
(Xinhua News Agency December 9, 2007)