China made significant headway in energy saving in the first five months of this year, but was still a long way from its goal to crack down on energy use by fuel-intensive sectors and achieve sustainable economic growth. The energy used to generate each dollar of national income fell more than two percent in the period versus a year ago, said a government official, reversing a rise in the first half of last year and improving from a modest cut for the whole of 2006.

This would leave China, the world's second-largest energy user, still far behind an ambitious goal of a 20 percent reduction by 2010 which Beijing is still hoping to achieve. "The situation of energy saving and consumption reduction is still severe and the tasks are arduous," Xie Fuzhan, head of the National Bureau of Statistics, told reporters on Thursday. "It should be noted that at the current stage, the growth of high energy consuming industries is still fast." China revised the reduction in energy consumption achieved in 2006 to 1.33 percent from 1.23 percent reported earlier.

Although it fell short of a target of four percent cut, the reduction may show that Premier Wen Jiabao's repeated calls to rein in wasteful, polluting industries and regional governments are yielding some results. Xie avoided giving specific targets for the years before 2010, but said the government remained 'hopeful, determined and capable of" achieving the 20 percent target for 2010.

PRICING TOOLS KEY
One of the reasons for missing the goals was China's lagging energy prices and tax policies, Xie said, a view echoed by analysts who said these would be more effective than administrative measures. China has kept its fuel prices well under international rates and held back fuel tax -- used in developed nations to curb fuel use -- wary that they will stoke inflation or stir public unrest. In 2006, China's total energy consumption rose 9.61 percent at 2.46 billion tonnes of coal equivalent, or 1.206 tonnes of coal to generate 10,000 yuan of national income, said Xie.

The share of electricity consumption of total energy use rose from 38.1 percent in 2005 to 39.5 percent in 2006, registering its fastest pace in the past three years, he said. Xie said power consumption increased 14.2 percent last year from a year earlier, with industrial use up faster, at 15.6 percent, while residential consumption also rose 14.5 percent.

After decades of promoting economic growth at almost any cost, Beijing has made energy saving and air pollution controls key to officials' career prospects and made leading companies commit to specific efficiency targets. The central government has also set detailed targets for provinces that aim to reflect the industrial base and growth prospects of each region, with less demanding ones for poorer areas. All the main regions, except Beijing, missed the energy saving target, said Xie.
(By Chen Aizhu, Eadie Chen and Jim Bai, Planet Ark, 13/7/2007)