Time for transformation

That the country's economic growth rate has dropped from 9.7 percent in the first three months of 2011 to 7.6 percent in the second quarter of this year is not all that bad news. It provides the government with an opportunity to focus its efforts on the transformation of the economic growth mode.

The generation of electricity decreased by 1 billion kilowatt-hours from December last year to February this year, which means that carbon and sulfur dioxide emissions dropped. At the same time the consumption of resources also declined. The inventory of coal increased by 37 million metric tons in the second quarter of this year alone, which testifies to the reduced consumption of this fossil fuel.

However, the reductions in greenhouse gas emissions and the consumption of energy resources have little to do with the decrease in per unit of gross domestic product, which means they may both rebound if the growth rate gathers speed.

Economic planners must be sensible enough to realize that the long-advocated transformation of the economic growth mode, which is meant to change the current energy-intensive and environmentally unfriendly economy into an energy-efficient and green one, must be pushed even harder.

Most local governments have got accustomed to relying on investment in realty and traditional industries for fat returns at the cost of the environment.

The local stimulus packages, which have amounted to more than 10 trillion yuan ($1.59 trillion), along with many energy-intensive and polluting industries in central and western regions, may continue the vicious cycle of investment and environmental damage the country has suffered over the past three decades.

At this critical time, the central government must be tough with local governments and make sure more investment goes to energy saving technology and innovation to reduce greenhouse gas emissions, as we must not forget that our energy intensity per unit of GDP is still much higher than the world average.

However urgently the country needs to maintain its high growth rate for employment and government revenue, the transformation of the growth mode is the only way to realize sustainable and healthy development. It cannot remain a slogan any longer. Now is the time to act.

(China Daily 09/25/2012 page8)