Cooling fires of China's fast-growing economy
Thursday, 4 October 2007
BEIJING, Oct 3 (Xinhua): Tianjin Development Zone thrives on foreign investment, but when it recently rejected a large foreign paper-processing project, there was little concern.
The plant was one of more than 100 enterprises rejected by this zone in the largest northern China port city in less than one year because of its heavy energy consumption and pollution.
"This is in line with the central government's efforts to boost the economy while saving energy and protecting the environment," says Li Yong, chairman of the zone's administrative committee.
Likewise, Wuxi City in eastern China has refused a 1.8-billion-US dollar papermaking project. Shanghai Songjiang Industrial Zone turned down a 1.9-billion-yuan polluting project. And Jiangsu Kunshan Industrial Zone actually spent 500 million yuan to move away polluting enterprises in the past three years.
The government's strategy and tactics of absorbing foreign funds have altered from "swapping the market for technology" in the late 1970s when China started its economic reform and opening to the outside world, to "locally attracting foreign funds" to boost regional economic development in the 1990s, and the use of low-pollution or high-end projects now, says Professor Xu Fu of Nankai University in Tianjin.
Industry officials state that the new focus is not on raw growth, but on the cost it incurs, as the country pursues sustainable development.
China has been striving for "rapid and efficient" economic development over the past decade.
Since 1990, China's economy has been expanding rapidly, averaging an annual growth rate of almost 10 per cent. At the end of 2005, China overtook the United Kingdom to become the fourth largest economy in the world by nominal gross domestic product (GDP), after the United States, Japan and Germany. Over the past five years, China has contributed a yearly average of around 13 per cent to the world's economic growth.
However, China has paid a price for the blind pursuit of GDP its high energy consumption, accompanied by high pollution, has threatened its sustainable development and prompted criticism from around the world.
One of the side effects of China's rapid rise has been the sacrifice of the environment. Huge burgeoning coal plants are being constructed around the country to feed the increased demand for energy.
Industry officials comment that the deplorable record in energy efficiency is one of the motives behind the government's changes, listing efficiency at the top of the economic agenda.
Ma Kai, minister in charge of the National Development and Reform Commission (NDRC), has pledged, "We will continue to change the country's pattern of growth this year, by further reducing energy consumption and pollution."
And President Hu Jintao has voiced concern too: "Governments at all levels should strive to better control economic growth and prevent the economy from overheating." Rein in investment China's economy remains highly investment-reliant. The first half of this year saw a 25.9 per cent growth in fixed assets investment to 5.41 trillion yuan, despite a slowdown from 29.8 per cent in the same period last year.
The plant was one of more than 100 enterprises rejected by this zone in the largest northern China port city in less than one year because of its heavy energy consumption and pollution.
"This is in line with the central government's efforts to boost the economy while saving energy and protecting the environment," says Li Yong, chairman of the zone's administrative committee.
Likewise, Wuxi City in eastern China has refused a 1.8-billion-US dollar papermaking project. Shanghai Songjiang Industrial Zone turned down a 1.9-billion-yuan polluting project. And Jiangsu Kunshan Industrial Zone actually spent 500 million yuan to move away polluting enterprises in the past three years.
The government's strategy and tactics of absorbing foreign funds have altered from "swapping the market for technology" in the late 1970s when China started its economic reform and opening to the outside world, to "locally attracting foreign funds" to boost regional economic development in the 1990s, and the use of low-pollution or high-end projects now, says Professor Xu Fu of Nankai University in Tianjin.
Industry officials state that the new focus is not on raw growth, but on the cost it incurs, as the country pursues sustainable development.
China has been striving for "rapid and efficient" economic development over the past decade.
Since 1990, China's economy has been expanding rapidly, averaging an annual growth rate of almost 10 per cent. At the end of 2005, China overtook the United Kingdom to become the fourth largest economy in the world by nominal gross domestic product (GDP), after the United States, Japan and Germany. Over the past five years, China has contributed a yearly average of around 13 per cent to the world's economic growth.
However, China has paid a price for the blind pursuit of GDP its high energy consumption, accompanied by high pollution, has threatened its sustainable development and prompted criticism from around the world.
One of the side effects of China's rapid rise has been the sacrifice of the environment. Huge burgeoning coal plants are being constructed around the country to feed the increased demand for energy.
Industry officials comment that the deplorable record in energy efficiency is one of the motives behind the government's changes, listing efficiency at the top of the economic agenda.
Ma Kai, minister in charge of the National Development and Reform Commission (NDRC), has pledged, "We will continue to change the country's pattern of growth this year, by further reducing energy consumption and pollution."
And President Hu Jintao has voiced concern too: "Governments at all levels should strive to better control economic growth and prevent the economy from overheating." Rein in investment China's economy remains highly investment-reliant. The first half of this year saw a 25.9 per cent growth in fixed assets investment to 5.41 trillion yuan, despite a slowdown from 29.8 per cent in the same period last year.