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.