Coal shortage will take the place of electricity shortage to be the most prominent challenge to China's economy this year, an official with the State Reform and Development Commission (SRDC) said Thursday.

"China faces overall power shortages of coal, oil and electricity, among which coal shortage will rise to be the first concern," said Cao Yushu, deputy secretary-general of the commission, said at a regular news conference, "To balance the demand and supply of coal will be the major task for China's economic control in 2005."

China's coal production exceeded 1.9 billion tons in 2004, a 15 percent increase year-on-year. However the supply continues to fail to meet the demand. By the end of December 2004, power stations had stocked only 10.99 million tons of coal, 1.12 million tons less than the previous month, according to SRDC.

Zhu Hongren, another official with SRDC, predicted that China's coal demand in 2005 will climb to more than 2 billion tons, half of which will be used for power generation.

But most coal mines across the country are worked to capacity already, making safety and production growth more difficult, Zhu said.

Supply and demand of coal, oil and electricity will be mainly dependent on companies, which are subject to principles of market economy, Cao said.

And the government only plays a role in supporting the construction of large coal bases, exploring more coal transportation lines and upgrading mining facilities to ensure safety.

Source: Xinhua