(China Daily)
Updated: 2008-03-22 14:38

The State Council recently issued another regulation to spur implementation of the guidelines it issued last year boosting growth of the service sector.

By attaching more importance to development of the service sector, which is less polluting and more energy-efficient compared with the industrial sector, the Chinese government is highlighting its resolution to seek a path of sustainable development.

A sound service sector is the structural answer for China's economy to continue its long-term growth. An increasing service sector share in the economy will considerably raise the country's overall energy efficiency.

The central government intends to raise the proportion of service sector contribution to gross domestic product (GDP) by three percentage points between 2006 and 2010. This is obviously a key step toward fulfilling the goal of cutting energy consumption per unit of GDP by 20 percent during the same period.

China's service sector expanded by 11.4 percent last year, the fastest growth since 1996. But that is far from enough, as it is dwarfed by sizzling industrial growth.

To the disappointment of policymakers, the share of the service sector in the national economy dropped to 39.1 percent, 0.3 percentage points lower than in 2006.

The result partly explains why the country only managed to reduce its energy per unit of output by 3.27 percent last year, after an intense two-year energy-saving campaign.

It is quite clear now that if the country is to succeed in its efforts to transform itself into an energy-saving, environmentally-friendly and sustainable economy, the government must do its utmost to facilitate structural changes. A stronger service sector will enable the country to rely less on energy-consuming industrial expansion for economic growth.

In the new regulations, the central government stresses the need to deepen related reforms and create a favorable environment to boost the service sector.

Local governments should take immediate action to upgrade the industrial structure of the local economy. Such efforts will go a long way toward achieving better energy efficiency.