Beijing warns about slow progress on green growth

Top leadership is confident of achieving expansion targets but rapid factory development is hampering efforts to curb pollution

PUBLISHED : Thursday, 23 January, 2014, 1:19am
UPDATED : Thursday, 23 January, 2014, 4:31pm

The central government has expressed confidence in achieving a sound rate of economic expansion but warned about slow progress in curbing pollution in the mainland's push for a greener growth model.

At its first press conference on the economy in Beijing this year, officials from the National Development and Reform Commission said yesterday that there should "not be any problems" for the country to meet the 7 per cent annual average growth target under the 12th five-year plan, which covers 2011 to 2015.

The mainland's gross domestic product growth hit 9.2 per cent in 2011 before slowing to 7.7 per cent in 2012 and last year.

However, Xu Lin, head of the NDRC's development planning department, said the country's progress towards several environmental targets had been "slower than expected".

Rapid factory expansion without paying enough attention to environmental protection has caused serious pollution across the mainland, with the choking smog hurting people's health.

A report issued by the Chinese Academy of Social Sciences said the mainland had the second-worst air pollution in the world after India in 2012.

Xu said the mainland had cut energy consumption per unit of GDP by 5.54 per cent since 2011, still far from the goal of a 16 per cent reduction by next year. Carbon intensity had fallen 6.6 per cent, also below the 17 per cent target for the five-year period.

Mizuho Securities' Greater China chief economist, Shen Jianguang, said the key to improving the environment was fixing the old evaluation system that gauged local officials' performance based on the economic growth they achieved.

The top leadership under President Xi Jinping has begun amending the system by requiring officials to also make improvements in cutting pollution and controlling debt.

"It's a difficult process. It took London decades to clean the air," Shen said. "At least the changes have begun to take place. Doing something slowly is better than doing nothing."

The NDRC officials said investment would continue to play a "key role" in supporting economic growth this year. "There's not an issue about curbing the investment scale. Instead, we will maintain a reasonable size of investment based on the premise of improving the investment structure," said Ou Hong, deputy head of the fixed-asset investment department.

The agency pledged to reduce steel overcapacity in Hebei province by 70 million tonnes by 2018. It would also strengthen scrutiny of the operations of local government financing vehicles, encouraging them to invest in areas including environmentally friendly and energy-saving industries and social housing projects, spokesman Li Pumin said.