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China's Fuel-Guzzling Economy Crushes Green Efforts

Tue, 08/03/2010 - 4:20am
Joe McDonald, AP Business Writer

BEIJING (AP) — Government efforts to make China's fuel-guzzling economy more efficient suffered a setback this year as surging growth drove a boom in steelmaking and other energy-intensive industries.

Beijing is in the final year of a five-year campaign to cut energy intensity, or energy consumed per unit of economic output, by 20 percent to curb pollution and dependence on foreign oil and gas. The government said in March that energy intensity had been reduced 14.4 percent by the end of 2009.

The trend reversed in the first half of this year and energy use per unit of output rose by 0.9 percent over the same period of 2009, the National Bureau of Statistics reported Tuesday.

China's growing energy consumption and imports have prompted complaints about its impact on oil prices and emissions of gases blamed for changing the climate. China is the biggest source of greenhouse gases and the International Energy Agency says it passed the United States last year as the top energy consumer.

Beijing warned in March that China was lagging on efficiency due to its stimulus, which drove a construction boom that boosted demand for steel, cement and other energy-intensive building materials.

That set back government efforts to shift China's economy away from heavy manufacturing and toward more technology-based businesses and cleaner service industries.

The economy grew by 11.9 percent in the first quarter over a year earlier and by 10.3 percent in the second quarter. Stimulus spending and a flood of lending by state banks helped to boost growth from a low of 6.1 percent growth in the first quarter of 2009.

Steel production rose 21 percent in the first half and the industry's power consumption soared 29.3 percent, according to figures from China's steel industry group reported Tuesday by the official Xinhua News Agency. China is the world's biggest steel producer.

The statistics bureau gave no details of other industries.

Chinese industries use 20 to 100 percent more energy per unit of output than their U.S., Japanese and other counterparts, according to the World Bank. Chinese officials say energy use is 3.4 times the world average.

Analysts say Beijing achieved easy successes early in its campaign by closing obsolete coal-fired power plants and factories and faces a tougher task of squeezing efficiency out of more modern industries.

China's energy consumption also has prompted criticism that its state-owned oil and gas companies are turning to international pariahs such as Iran and Sudan for supplies.

Beijing says it is trying to curb output of greenhouse gases but has rejected binding commitments and has called on the United States to do more to reduce its own emissions.

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