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Growth Calls for Energy Efficiency

Rapid industrial growth calls for strengthened efforts to raise energy efficiency and reduce pollution, said officials from the National Development and Reform Commission (NDRC).

After four consecutive years of above 16 percent growth, the total value added to large industrial enterprises was up 18.3 percent year-on-year in the first quarter, the fastest in a decade.

"The overall industrial growth is sound," said Zhu Hongren, a NDRC official in charge of economic growth, referring to both soaring profits and progress in balancing regional development.

Industrial enterprises' profits jumped 43.8 percent in the first two months, 22 percentage points higher than that for the same period last year.

The country's central and western regions witnessed more investments and production growth than the eastern areas in the first three months. Their share of the national fixed-asset investment increased by 1.6 percentage points and 0.2 percentage points respectively.

"However, further acceleration in industrial growth will make it more difficult to maintain stable economic growth," Zhu told a press conference yesterday. "Growth in some energy-consuming industries has been too rapid."

Six energy-consuming sectors - steel, nonferrous metals, chemicals, power, petroleum processing and coking, and construction materials - produced about one-third of the country's total industrial added value. But they together accounted for 64 percent of electricity consumption and 70 percent of energy consumption.

In the first quarter, the added value of the six sectors grew 20.6 percent, 2.3 percentage points higher than the overall industrial growth. Their electricity consumption growth also went up 18.2 percent, 1.4 percent higher than the average for all industrial enterprises.

"If the trend cannot be checked, it will inevitably affect the country's efforts to meet its goal on energy saving and pollution reduction," Zhu said.

China has set a goal in its 11th five-year plan to slice its energy consumption per unit of domestic gross product (GDP) by 20 percent and the discharge of sulphur dioxide (SO2) and chemical oxygen demand (COD) by 10 percent between 2006 and 2010.

"One focus of this year's macroeconomic control is to rein in excess growth of energy-consuming products," said Jia Yinsong, another NDRC official in charge of economic growth.

The government will take concrete measures to strictly control the investment size and exports of energy-consuming, pollution-heavy and resource-intensive products, according to Jia.

The government has also decided to boost the tertiary industry to facilitate the change of the country's growth pattern, said Xia Nong, a NDRC official in charge of industrial polices.

It is estimated that the service sector's energy consumption per unit added value is only one-fifth of that of the industrial sector. That means a larger share of the service sector in the national economy will lead to lower energy consumption per unit GDP, according to Xia.

Yet, the share of the service sector's added value in GDP has declined from 40.7 percent in 2004 to 39.9 percent in 2005 and 39.5 percent last year.

"It is pressing and demanding task to accelerate development of the service sector," Xia said.

(China Daily April 27, 2007)

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