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Green policy 'may strangle growth'

Ray Cheung

Market should drive environmental protection: economist

China must adopt market mechanisms to protect the environment instead of relying on government regulations, which could scuttle economic growth, a top government economist says.

'We cannot depend on too much government intervention to protect the environment,' said Sun Xiaoyu, a vice-president of the State Council's Development Research Centre.

'The key is to develop market-based incentives that promote sustainable economic growth.'

Speaking yesterday at a Beijing conference on sustainable development, Mr Sun suggested excessive government regulation might worsen the ecological crisis and harm economic growth.

To achieve sustainability, Mr Sun said the mainland needed to improve its economic efficiency. While the mainland accounted for 4.5 per cent of the world's total gross domestic product, it consumed 30 per cent the world's coal, 27 per cent of its steel and 25 per cent of its aluminium.

Niu Wenyuan , director of the Chinese Academy of Sciences' Institute of Policy and Management, also stressed that China must reduce its inefficient consumption of resources, while warning the country would face more environmental pressures as rural areas became more urbanised.

Professor Niu said the nation could maintain economic growth without increasing its energy consumption, particularly as population growth continued to slow, but it would need to institutionalise efficiency-driven changes to its economy and society.

Qu Geping , former chairman of the National People's Congress Committee on the Environment and Natural Resources, was more optimistic about the mainland's ecological future, citing improved government management and policies.

Professor Qu said the government was implementing more effective regulations, such as requiring all government agencies to assess the environmental implications of their actions as part of their five-year development plans.

He also noted the country was spending more on cleaning up and preventing pollution.

Professor Qu said the mainland's spending on environmentally related goods and services represented 1.39 per cent of the nation's GDP in 2003 and was slightly more last year.

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