Right now, provincial officials are gathered at the Central Party School of the Communist Party of China to consider a new approach to development.

This signals Beijing's increasing seriousness in guiding all government agencies to shift from chasing ever-higher growth rates in gross domestic product (GDP) to seeking sustainable development and improvements in the general welfare of the country.

The leadership's consensus is that there have to be strong efforts made to address imbalances between urban and rural development, between coastal and interior regions, between economic and social progress, between consumer interests and environmental quality, and between the development of the domestic market and opening up to the world market.

This effort should top government agendas across the country.

These imbalances affect many issues that may have been previously overlooked in the hectic changes the economy has undergone.

Those are great changes, but they should not be a cause for complacency.

Some of those oversights have led to painful lessons for China. Among them, the inadequacies in its public health system and frequent workplace hazards.

As the development re-orientation seminar continues at the Central Party School, the government is reportedly being called on to review a fair number of big-ticket investment projects initiated by various local governments.

Many of the projects, such as steel mills and aluminum processors, would add to China's need for an already strained supply of industrial materials and energy. They are now likely to be cancelled or postponed.

Government think-tank researchers are warning of an over-capacity in these facilities in a couple of years, signaling an ominous threat to the health of the nation's financial system. While the short supply of power will probably be exacerbated in some areas, they said, the nation's total output of aluminum, whose production requires enormous amounts of energy, may be one-third more than the anticipated demand in 2005 and reach 9 million tons.

Although building so much industrial capacity, or rather over-capacity, may ostensibly add glory to the local governments' reports of GDP growth, its contribution to the sustainable development will, as we can reasonably foretell, be on the border of insignificance.

Indeed, it will be counter-productive, as it will further erode the industry's existing profit margin. And factories that cannot guarantee their market share will be unlikely to sustain the jobs they produce.

In fact, it is not manufacturing, but the service sector, that is creating most of the new jobs for this nation. Small shops and service teams may not generate big figures for the local governments' GDP accounts, but they help more rural people find off-farm jobs and make city life more convenient and customer-friendly.

Only in this way can China expect to improve the quality, rather than simply the quantity of its economic development.

Without that, its unemployment burden will never go away even if the country continuously churns out the world's highest GDP growth rates.

(China Daily February 20, 2004)