BEIJING - China will cut the amount of energy it uses to produce each dollar of national income by 4 percent this year, Premier Wen Jiabao will say in a speech on Sunday that gives unprecedented prominence to energy challenges.
The world's second-largest oil consumer will also publicly name wasteful energy users, as part of a drive to curb a booming appetite for resources and a growing reliance on imported crude. "Beginning this year, we will publish annually details of the energy consumption of every region, and of firms in all key industries," Wen says, according to excepts from his annual address to parliament seen by Reuters.
In previous years, energy issues received little more than a passing mention in the premier's annual report, but Wen devotes unusual attention to conservation.
China burns over four times more energy to generate a unit of economic output than the average Group of Seven developed country, according to the Asian Development Bank -- although on a per person basis, its energy use is below those nations'.
Its vast domestic coal reserves provide around 70 percent of that energy, but China still imported 127 million tonnes (927 million barrels) of crude oil last year -- more than 40 percent of its consumption.
It has not yet built up strategic stockpiles, making its economy particularly vulnerable to oil supply disruptions, and dirty-burning coal causes environmental problems ranging from acid rain to air pollution that kills tens of thousands annually.
To tackle these problems, Beijing had already pledged to cut energy use per unit of economic output by 20 percent by 2010, but a reluctance to pass rising global oil prices on to consumers could hinder progress.
State-set caps currently keep the cost of diesel and gasoline far below international markets, and there is a similar tight control system for electricity costs.
Higher prices might encourage greater efficiency, the World Bank said in a recent report, since data suggests they contributed significantly to past improvements.
Beijing has launched limited reforms of natural gas pricing and freed up some coal markets, and analysts expect a revamped fuel price system could be unveiled as early as this month -- but one that will fall short of full liberalisation because officials are wary costly energy could spark inflation or social unrest.
Wen says the government wants to improve pricing mechanisms for resources -- without specifically mentioning energy -- but highlighted concerns about the poor.
"The changes should take into account the interests of all parties, and especially consider the impact on the daily lives of low-income groups," he says.
China has also been fretting about the growing concentration of high-energy industry within its borders. Wen says it will shut down the most wasteful and dangerous operations.
"In accordance with the law we will close down enterprises that are wasting resources, polluting the environment or failing to comply with safety regulations," he says.
REUTERS NEWS SERVICE
