SUSTAINABLE ECONOMY: Pictured is a workshop of Quanzhou Pengxiang Artificial Stone Co. Ltd. in Fujian Province for packaging stone plates made from reused stone powder and broken rocks (ZHANG GUOJUN)

Countermeasures

Despite the severe difficulties, policymakers have never relaxed their efforts to propel the green economy. On July 11, the Ministry of Industry and Information Technology (MIIT) released a list of industrial enterprises that must eliminate outdated and polluting capacities. The list included 2,255 companies in 18 sectors including iron and steel making, cement, copper smelting, papermaking, and dyeing and printing.

"This move is a needed boon to curb the energy-intensive industries and pave way for the country to meet the target of energy conservation and emission reduction," said Pan Yuhong, a researcher with the Shenzhen-based think-tank CIConsulting. "It is also important for the country's industrial upgrade and economic restructuring."

Zhu Hongren, chief engineer of the MIIT, said the market should have played an important role in conserving energies and clearing pollutions.

"However, the market mechanism is not effective because enterprises don't have to pay full price for consumed resources and energies, as well as the cost of the environment, land and labors," he said. "China has yet to put in place a complete market-based pricing scheme of resource products like electricity and fuel."

"Many highly polluting enterprises shunned the responsibility of energy conservation and emission reductions," he said. "With less costs, many of them have lowered product prices, leading to a sales boom."

As a result, it is necessary for the government to continue eliminating outdated capacities and allow the market to play a bigger role in resource allocation, said Zhu.

He added that the task was difficult because it involved a series of issues, such as asset losses, debt repayment, employment and local economic development. "Besides this, it would have huge impact on fiscal revenues of local governments."

In a bid to press ahead with the green economy, the MIIT and the Ministry of Environmental Protection have raised the entry threshold and project construction environment requirements for some energy-guzzling and polluting industries. Meanwhile, the National Development and Reform Commission and the MIIT have stopped approving new projects for those sectors.

The government is also taking vigorous efforts to improve the market mechanism to conserve energy. For example, some central and eastern provinces have imposed higher electricity tariffs on companies that use too many resources. The government has also set up a bonus fund to encourage enterprises to phase out polluting capacities. The high-performing companies can receive bonuses while those bad performers will have to suffer punishments.

Zhu said this year the MIIT will assign concrete tasks of eliminating outdated capacities to enterprises and release the list of designated enterprises for public supervision. The ministry will also take follow-up legal and economic measures to ensure implementation of the program, he added.

Sectors Identified as Energy-Consuming Industries

- Chemical raw material and chemical product manufacturing industries

- Non-metal mineral production and processing industries

- Nonferrous metal smelting and pressing industries

- Ferrous metal smelting and pressing industries

- Oil refining, coking nuclear fuel processing industries

- Electric power and heat production and supply industries

The energy consumption of the above industries accounts for a high proportion of their output value.

(Source: National Bureau of Statistics)

Targets for Industrial Energy Conservation and Comprehensive Resource Utilization in 2011

- Reducing energy consumption per unit of the industrial added value by 4 percent

- Decreasing carbon dioxide emission per unit of the industrial added value by at least 4 percent

- Cutting water consumption per unit of the industrial added value by 7 percent

- Increasing the comprehensive utilization rate of industrial solid wastes by 2.2 percentage points

Targets of Eliminating Outdated Capacities for 2011

Getting rid of 153.27 million tons of cement making, 31.22 million tons of iron smelting, 27.94 million tons of steel making, 19.75 million tons of coking 8.196 million tons of papermaking.

(Source: Ministry of Industry and Information Technology)