Think tank suggests China speed up reform on prices of resources

China's top think tank says the government should reform on resource prices for more efficient economic growth.

The price reform should increase costs of resource products for businesses in extensive growth mode, said the report made by the Development Research Center (DRC) under the State Council.

The DRC report called for deeper reform on price formation mechanism of power, petroleum, natural gas, coal and water to let market play a bigger role in resource distribution.

DRC attributed the present highly energy-consuming growth mode to price system which fails to reflect the rarity of resources.

Statistics with the center show that water is China's most precious resources but China's water price is merely one third of the world average.

Low price led to over consumption and waste of water resources, said the report. The same story happened to rural lands.

The research organization suggested deeper reform on land system and higher cost of land use to protect rights of farmers.

Tax policies should also be improved to encourage saving of resources and restrain profligacy, said the report.

Government statistics show that China's energy consumption for unit domestic gross product (GDP) rose slightly by 0.8 percent in the first half year.

The figures represent a major challenge for China's economic planners, who had planned a four percent cut in the country's energy consumption for per unit of GDP this year.

Source: Xinhua