OPINION> EDITORIALS
A greener recovery
(China Daily)
Updated: 2009-04-30 07:45

The steady decline in energy intensity may spark hopes of China's economic turnaround being greener than expected. Low energy intensity indicates lower price or cost of converting energy into GDP.

Though it is too early to take this trend for granted, it still can give Chinese policymakers a much-needed shot in the arm.

Latest statistics show China cut its use of energy per unit of gross domestic product (GDP) by 2.89 percent in the first quarter over the same period last year.

Since the Chinese government rolled out a 4-trillion-yuan (US$586 billion) stimulus package to fight the global recession, many people at home and abroad have expressed skepticism about the country's ability to deliver on its five-year energy-saving goal.

To pursue sustainable development, the Chinese government has vowed to reduce its energy consumption by 20 percent per unit of GDP from 2005 levels during the 11th Five Year period (2006-10). But the country managed to cut it by only 5.38 percent over 2006 and 2007 -- about a quarter of the five-year target.

A greener recovery

A drastic slowdown of the Chinese economy in the latter half of last year enabled the country to reduce its energy efficiency 4.59 percent in 2008, putting it back on track towards the five-year energy-efficiency target.

However, in the rush to invest 4 trillion yuan in stimulus spending and revive flagging industrial production, will China backpedal on its pursuit of energy-saving, environment-friendly and sustainable growth? This will remain a moot point until China has successfully stepped out of the current global crisis.

A 6.1-percent GDP growth in the first quarter, the slowest in about a decade, indicates that the country's all-powerful industrial sector is running much below capacity to temporarily bring down overall energy intensity.

In other words, it is possible that a rebound of industrial production later can reverse the trend if their actual energy efficiency has not improved as much as the latest statistics indicate. Yet, while there is such a clear cause for concern, encouraging changes are also taking place in the structure of the economy.

Thanks to faster investment growth, the proportion of the energy-saving service sector in GDP has increased by 1.6 percentage points while that of the industrial sector fell by 1.9 percentage points in the first quarter.

Such structural changes will provide a solid foundation for continuous improvement of energy efficiency.

Hopefully, Chinese policymakers can build on the momentum to make the country's economic recovery even greener.

A speedier and greener recovery of the Chinese economy will surely be a great boost to the country as well as the world.

(China Daily 04/30/2009 page9)