Energy-hungry sectors cast shadow on green moves

08:55, May 19, 2010      

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The accelerated growth of high energy-consuming industries has aroused concerns over the effectiveness of the nation's efforts to restructure its economy to save energy and cut emissions.

Analysts said that as the economic recovery picks up, policymakers will be under greater pressure to cut emissions while maintaining stable economic growth.

The industrial output of the six major energy consuming industries - electricity, iron and steel, nonferrous metals, construction materials, petroleum processing and chemicals - grew 17.9 percent year-on-year in April, 0.9 percentage points higher than March, said the National Bureau of Statistics.

In contrast, in April, the overall growth of industrial output was up 17.8 percent year-on-year, 0.3 percentage points lower than the previous month, according to the bureau.

The nation's industrial output rose 19.1 percent year-on-year in the first quarter, down 0.5 percentage points on the first quarter, while growth in urban fixed-asset investment dropped 4.4 percentage points compared with the same period last year.

Meanwhile, power generation reached 331.64 billion kilowatt-hours in April, a jump of 21.4 percent year-on-year, with experts attributing the hike to the strong growth momentum of those energy-hungry sectors.

"It is a new trend worth close attention" despite the overall scenario in which growth in heavy industry output has slowed while light industry output has accelerated, said Sheng Laiyun, the bureau's spokesman.

"Indeed, that means our consumption of energy is speeding up and saving energy and cutting emissions are becoming even more pressing tasks."

The economic restructuring still has a long way to go, with its impact offset by surging demand for energy, said Zhu Baoliang, deputy director of the State Information Center's economic forecasting department.

"Increased government investment, which was mainly injected into fields such as infrastructure construction, has greatly buoyed demand," he said, although the low base in the same period last year also accounted for much of the high growth rate in the output of heavy energy-consuming sectors.

"Heavy industries, especially high energy consuming industries, started to decline before other industries during the crisis, which made the rate in April look especially big."

Moreover, the April statistics could be temporary and policymakers need more time to monitor the real trend, said Dong Xian'an, chief macroeconomic analyst with Industrial Securities.

China has restated its commitment to speeding up economic restructuring this year to make its growth more sustainable, after it reported a strong recovery of 8.7 percent year-on-year in gross domestic product growth in 2009, exceeding the target of 8 percent.

The government has set a target of a 20 percent decrease in energy consumption per unit of gross domestic product from 2006 to 2010, a key step in materializing its commitment of a 40 to 45 percent reduction before 2020.

The State Council said earlier this month that the nation had only achieved a 14.38 percent cut in energy consumption and promised to encourage local governments to scrap backward production capacity and liberalize energy product prices.

Source: China Daily


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