China strives to break bottlenecks of economic growth

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Last updated at: (Beijing Time) Saturday, January 17, 2004

China strives to break bottlenecks of economic growth

China is asserting greater efforts to ease the bottlenecks of economic growth as the galloping economy puts strains on coal, oil and electricity supply.

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China is asserting greater efforts to ease the bottlenecks of economic growth as the galloping economy puts strains on coal, oil and electricity supply.

Deputy Secretary General Ma Liqiang of the State Development and Reform Commission (SDRC) told local media Friday that excessive expansion of certain industries had increased the potential risks of economic growth, which requires special attention from the government.

Ma said certain areas in the country had put great pressure on coal, oil and electricity supplies and transport capacity due to rapid growth.

In order to increase coal supply, the government has recently adopted measures to encourage expansion of coal production, increase capacity of coal transport and reopen small mines shut down by the government. By the end of 2003, Shanxi Province, one of the largest coal producers in China, had reopened 68 percent of the small mines that were temporarily shut down during a nationwide work-safety operation in the past few years.

In addition, the government advised coal producers to increase supply to major power plants and metal smelting enterprises and transport more coal to the eastern and central parts of the country. These measures avoided shortages of coal in large areas and maintained continuous production of major power plants, Ma said.

In 2003, both output and consumption of electricity increased more than 15 percent in China. However, power supply in certain areas of the country was still strained. In early January this year, 16 provinces and autonomous regions had blackouts due to shortage of electricity supply. Electricity shortages were most obvious in Zhejiang, Sichuan, Shanxi, Hunan, Jiangsu and Fujian provinces. The government has urged local authorities and relevant enterprises to tap into potential capacity, use price leverage to guide electricity consumption and accelerate construction of new power plants.

Since November last year, railway authorities increased the daily transport volume of coal from 38,000 carriages to 50,000 carriages. So far 62 million tons of coal has been carried by railway, 11 million tons more than scheduled. Ma said the country has managed to secure the transport of coal, grain, oil and fertilizer though the railways are running at more than full capacity.

In order to ease the strain in diesel supply in certain areas of the country, the SDRC consulted with the two major oil producers in China to increase oil output and reduce oil exports. The companies increased supply to local markets in Jiangsu, Zhejiang, Shanghai, Chongqing, Yunnan and Guangdong and eased shortage of diesel supply in these areas.

Ma said the bottlenecks in transport, fuel and power supply have drawn high attention from Chinese leaders. He said the government will take measures to curb blind investment and redundant construction in certain industries so as to avoid severe fluctuations in the economy.

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