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New GDP System to Ensure Sustainable Development

The central government is working on the criteria and indexes of a green GDP, which deducts the cost of environmental damage and resources consumption from the traditional gross domestic product, and the new set of criteria is expected to be finished in three to five years.

Xu Xianchun, director-general of the department of national accounts of the National Bureau of Statistics (NBS) of China, told a Xinhua reporter Thursday that the NBS has started the work to set up the calculation system of the green GDP, and some pilot provinces and cities have also been chosen.

Xu said as the central leadership is turning to a scientific concept of development which calls for an overall, coordinated and sustainable development, more Chinese local governments have shown great interest in introducing the green GDP concept into their economic development calculation systems.

Xu said the government is paying more attention to the importance of environment and resources in the economic growth. The change can be seen in the NBS's latest publication, Statistical Communiqué of the People's Republic of China on the 2003 National Economic and Social Development.

He said, for the first time, the Communiqué added a special section on resources and environment, briefing the influence of economic development on resources and environment.

Also a senior statistician of the NBS, Xu said the green GDP deducts from the traditional GDP the costs of resources consumption and environmental loss due to economic activities, and it reflects a different national economic growth rate with the GDP.

Xu said the green GDP can help people understand the costs of resources and environment during the economic development, urging people to realize that it is unreasonable to purely seek economic growth while ignoring the importance of the resources and environment.

China is facing the problems of over-consumption of resources in pursuit of rapid economic growth, said Xu, adding that the pure concept of GDP fails to reflect the influence of economic growth on the resources and environment.

Xu said the green GDP is a scientific concept adopted to evaluate a country's economic development, but he noted that currently there is no country in the world that can establish a whole set of green GDP criteria, which includes not only the index of green GDP, but also the detailed quantity and value for all consumed resources and environmental damage.

Xu said the only way for China to set up the whole system is to work from the very beginning and all local Chinese government eager to adopt the new index as early as possible must realize that the establishment is "a very long process".

According to Xu, China at present still faces difficulties in evaluating the loss of resources and environment incurred by economic activities.

Xu said at the first stage, the NBS plans to adopt the calculation methods the United Nations enshrined in its comprehensive environmental economic account system.

Xu said the whole green GDP system of China is expected to be created in three sequences, with the first step working on quantity of natural resources consumed in economic activities, the second step on quantity of environmental loss caused by economic development, and the last step on valuing the quantity of resources and environmental loss.

According to Xu, the NBS has decided to choose land, forestry, mineral and water resources as the first group of resources to make quantity account. The NBS is also working on the "energy resources account", which will help calculate consumption of energy resources during the economic growth.

The NBS will also expand the experimental scope in the coming years, said Xu. He said, besides Chongqing City and Hainan Province, the NBS will choose more regions to launch more green GDP indexes so as to promote the establishment of the whole green GDP system in China.

(Xinhua News Agency March 12, 2004)

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