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Greener Growth Top Priority for Policy Makers
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The Chinese economy is maintaining red-hot growth, but now top policymakers are considering how to build a greener economy.


"China should take substantive measures to shift its focus from pursuing speed to improving the quality and efficiency of economic growth," President Hu Jintao said at last week.


The Chinese economy has grown rapidly this year.


In October, China witnessed not only a record trade surplus but also the fastest growth of retail sales in almost two years.


Official statistics showed that the country's trade surplus reached a record US$23.8 billion in October, bringing the total for the year to US$133 billion, a third higher than for all of 2005. Meanwhile, retail sales jumped 14.3 percent year-on-year to 699.8 billion yuan (US$89.1 billion).


Along with the acceleration of net export growth and the pick-up of consumption, the country's investment has slowed down as a desired result of the country's macroeconomic control.


Urban fixed-asset investment growth was lowered to 26.8 percent year-on-year in the first 10 months, down from 31.3 percent for the first half of this year.


The growth of gross domestic product (GDP) has slowed from a stunning 11.3 percent in the second quarter to 10.4 percent in the third quarter.


The People's Bank of China, the nation's central bank, predicted last month that the economy will likely expand at a more than 10 percent pace in 2006.


However, amid such encouraging economic indicators, Chinese policymakers are paying more attention to energy and environment, areas that allow for little optimism.


The government has made a 4 percent cut in the country's overall energy intensity a binding goal for this year. It is the first step to achieving one of the key goals of the new 11th Five Year (2006-10) Plan to lower consumption of energy per unit of GDP by 20 percent in five years.


But in the first half of this year, the country's energy consumption per unit of GDP rose by 0.8 percent in the first half year.


"The underlying reason is that we have strong growth momentum, but we lack pressure and economic incentives to realize the change of growth pattern," wrote Chen Qingtai, former deputy director of the Development Research Centre under the State Council.


Figures released last week by the State Development and Reform Commission showed that the country's coal output and electricity generation in the first 10 months increased by 12.2 percent and 13 percent over the same period last year.


Given that the GDP growth was less than 11 percent for the first three quarters, the country's energy intensity can at best level out this year.


The country has stepped up its efforts to improve energy efficiency this year.


The central government has designated specific energy saving goals for each province to fulfil. By doing so, performance of local officials will eventually be evaluated in line with their efforts to raise energy efficiency.


(China Daily December 6, 2006)

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