China's energy consumption per unit of gross domestic product dropped by 2.78 percent in the first half of 2007 marking a steady year-on-year improvement, the government announced on Monday.

 

The government's five-year plan from 2006 and 2010 set itself the target of reducing energy consumption by 20 percent per unit of GDP. Last year, this target was missed falling only 1.33 percent, only one third of the four-percent annual target.

 

Larger enterprises had led this latest fall in energy savings though, proclaimed a joint statement from the National Bureau of Statistics, the National Development and Reform Commission, and the Office of the National Energy Leading Group.

 

The statement said energy consumption per unit of industrial output for companies with annual sales over five million yuan fell by 3.87 percent.

 

This is seen as a result of the government seeking to eliminate outdated and high energy-consuming small facilities as it seeks to meet its energy saving target.

 

However, an adverse reaction stemmed from power consumption per unit of GDP rising by 3.64 percent year-on-year in the first six months.

 

The energy consumption per unit of industrial output fell 7.76 percent year-on-year in the coal industry, 6.49 percent in the steel industry, 7.84 percent among construction materials producers, 5.17 percent in the chemicals industry and 2.57 percent among power companies, all of them among the country’s leading power-hungry industries.

 

However, the energy consumption per unit of industrial output rose by 1.27 percent in the oil and petrochemical industry as well as by 1.58 percent among nonferrous metal producers.

 

Justin Yifu Lin, chief of Peking University's China Center for Economic Research, urged the government to increase resources tax to encourage energy efficiency.

 

Analysts said the government was reluctant to make such a move as it might drive inflation further up as companies passed the added cost to customers.

 

China's consumer price index, the main gauge of inflation, jumped by a 33-month-high of 4.4 percent in June, well above the government target of three percent for 2007.

 

(Xinhua News Agency July 31 2007)