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Service Sector Development to Improve Energy Conservation
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China will improve energy conservation by increasing the proportion of the service sector in the economy, a State Council statement said on Thursday.


The State Council authorized Xinhua to release the decision statement on improving China's energy conservation, in which it emphasized the fundamental way to curb rising energy demand was to alter the industrial structure.


China's roaring economic growth has been mainly driven by secondary industry, while services, consuming less energy and producing higher value, accounted for about 40 percent last year, compared with more than 70 percent in developed countries and 51.2 percent in India.


China saw its gross domestic product grow by 10.9 percent in the first half. The added value of the secondary industry rose by 13.2 percent over the same period last year, and services were up 9.4 percent.


First-half energy consumption measured by 10,000 yuan of GDP per 1.43 tons of standard coal rose by 0.8 percent over the same period last year, the highest rise the past four years.


The key to better energy conservation was to adjust and improve the country's economic structure, said Ma Kai, chairman of the National Development and Reform Commission (NDRC).


The NDRC calculated that if the added value of the service sector in the economy rose by one percent, and the added value of the secondary industry fell by one percent, energy consumption will drop by one percent.


If the added value of high-technology industries in the industrial sector rose by one percent and that of high energy-consuming industries, such as chemicals, metallurgy and building materials, dropped by one percent, energy consumption would be reduced by 1.3 percent.


High-tech industries accounted for 10.3 percent of the total added value of the industrial sector last year.


The State Council required governments at all levels to transform their emphasis from industrial expansion and economic growth to strengthening the service sector and the improvement of the economic structure.


The statement said the State Council also required restrictions on the expansion of high-consumption industries and energy consumption as a standard in approval of projects.


The government set a goal to reduce energy consumption by 20 percent during the five-year period from 2006 to 2010.


Energy conservation has been listed as a major index assessing achievements of local governments.


(Xinhua News Agency September 1, 2006)


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