China's primary economic goal this year has been energy conservation. Since the beginning of the year, China has presented increasingly urgent and detailed measures towards energy conservation whilst the government has adopted a more stringent approach. This has been in response to heated discussions on the restrictions and objectives of the outline of the "11th Five-Year Plan" and more recently the "State Council's decision on strengthening energy conservation".

Over the past two years, the rapid growth that China's economy has experienced has further highlighted shortcomings in energy. These have include the time-restricted electricity systems in over 20 cities that have still not been restored and the continuously soaring price of coal that has triggered riots and an increasing number of mining incidents. When taking into consideration soaring oil prices within the context of international energy, it is understandable why the contradiction between resource environment and economic development has become the principal problem for China's modernization. Due to the current situation, energy conservation has become extremely important.

China has already recognized the importance of energy conservation by prioritizing it as one of her strategic and comprehensive objectives. At the Fifth Plenary Session of the 16th CPC, the government pointed out that energy saving was a fundamental state policy. In the "11th Five-Year Plan" Guideline, the government set up a restricted target to reduce the energy consumption rate of GDP per unit by 20%. The central government has taken a tough stance towards the "fundamental state policy", "restricted targets" and State Council decision, as well as taking a faster approach towards energy conservation.

However, it seems that overall agreement by local governments at different levels has not yet been reached. China's GDP growth rates have risen again this year and there has been growing investment in various areas, however there still needs to be greater reform to the instruments of economic growth. Energy consumption has not helped to encourage further industrial development, and in some areas more high energy consumption industries have emerged. Due to the vast amount of energy consumption, growing at a faster rate than the economy, the State Council has made the "Ddecision", which requires the "government at different levels to regard energy saving as a priority."

This "Decision" outlines the details of six ways in which to conserve energy, including both macro and micro economic measures. From a macro perspective, the "Decision" proposes that adjustments are made to the industrial structure and the proportion of the tertiary industry and high-tech industries. It proposes the deepening of reform of energy prices, and the creation of a favorable energy price mechanism. Meanwhile, the government should start with the energy conservation project, set up assessments of energy-saving projects and examination systems. It should also develop rational plans for industrial and regional distribution, and strictly control the launch of high energy consumption projects in order to avoid mistakes that result in unnecessary energy waste. From a micro perspective, the "Decision" recommends that the energy conservation of high energy consumers and public buildings and facilities be properly managed.

The Chinese government has requested appropriate staff be assigned by businesses to deal with energy conservation. Objectives and responsibilities need to be consigned to specific workshop, teams and individuals whilst the internal temperature should be no lower than 26 degrees Celsius in summer and no higher than 20 degrees Celsius in winter.

For a satisfactory result to be achieved, firm measures are sometimes needed.

The State Council recommended in the "Decision", that units and enterprises pursue a policy of strict "responsibility" and "accountability". This would include appropriate tasks and restricted targets being applied to different levels.

The State Development and Reform Commission have indicated that restricted targets for energy conservation set by the "11th Five-Year Plan" Guidelines should be distributed amongst provinces. The provincial governments should then allocate separate tasks amongst cities, counties and the main energy consuming enterprises.

Governments at different levels need also pay close attention to the assessment system. The Statistical Office, National Development and Reform Commission along with other departments are required to regularly publish data for energy consumption whilst provincial governments need to establish a system for publishing local energy consumption. Energy consumption indicators will be included in the annual economic and social development comprehensive assessment and evaluation system and will be recorded as a part of performance assessment of leading groups and officials of local governments and large and medium-sized state-owned enterprises.

Although the exact effects of taking greater measures towards energy conservation are unclear, what is clear is that these steps only represent the start and further obstacles will still need to be faced.

Editor: Yan