China will be struggling to meet targets for reducing energy consumption unless it takes serious measures to change its economic growth patterns,experts said.

While China's GDP growth continues at around 10 percent this year, the country is striving to reduce its energy consumption.

The aim is to reduce energy consumption by 20 percent for every 10,000yuan (1,250 US dollars) of GDP between 2006 and 2010.

However, considering the current economic situation, the goal of reducing energy consumption by four percent this year does not look like being reached easily unless China makes great changes in its macro-economic policy," said Zhou Dadi, Director General of the Energy Research Institute of the National Development and Reform Commission.

China saw sharp growth in energy consumption this year. According to statistics, in the first four months, China's coal consumption rose by 13.8 percent over the same period of last year, coke, 11 percent and electricity, 12.5 percent.

China produced 60.55 million tons of crude oil in the first four months with a year-on-year growth of 1.9 percent while its imports of crude oil rose by 17.3 percent to 49.15 million tons.

China's energy consumption is increasing due to two factors, said Zhou.

According to Zhou, the Chinese economy will continue its high-speed growth inherited from the five-year period from 2001 to 2005 and this will not cool down in the short term.

Heavy industrial sectors such as metallurgy, chemicals and building materials continue to grow rapidly. Investment is still hot and economic growth is still the index local governments place the most importance on, he said.

On the other hand, the goal of reducing energy consumption requires fundamental changes in China's energy consumption methods, he said.

China's energy problems cannot be solved independently and it is a matter of the macro economy of the country, said Tao Dong, economist with Credit Suisse in Hong Kong.

It depends on changes in China's economic growth mode, said Zhou.

Five industrial sectors - iron and steel, chemicals, building materials, oil and coke refining and electricity and heat generation - use over half of the country's total energy consumption.

Experts agree that the first step should be pricing reform.

A symposium on pricing reform of resources held by the Chinese government last October said that China will step up reforms on the price of resources to establish a pricing system reflecting market demand and supply, the rarity of resources and the cost of environmental pollution.

Since then, some steps have been taken to raise the prices of refined oil products, coal and electricity, but Tao Dong said the price rises are still not large enough as only a market-oriented pricing system could act as a real signal for efficient energy consumption.

The goal of reducing energy consumption which has been written in the plan for the 11th five-year period is "compulsory", said Bao Yunqiao, Vice President of the China Energy Research Society.

Local governments have all set their targets of reducing energy consumption in the 11th five-year period, and energy consumption reduction has been taken by some governments such as Zhejiang, Shandong, Jiangsu, Hebei and Gansu provinces, and Shanghai as an index assessing achievements of local officials.

The goal of reducing energy consumption by four percent is not impossible so long as innovative changes in improving the economic growth mode can be made as soon as possible, said Zhou.

Once such changes are made, the energy consumption reduction goal of 20 percent in five years could definitely be reached, he said.

Source: Xinhua