Doubts Rise over Missing Data

Concerns grow over China's energy goals.
An analysis by Michael Lelyveld
2011-10-24
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A coal fired power station in Huaibei in east China's Anhui province, Aug. 11, 2011.
A coal fired power station in Huaibei in east China's Anhui province, Aug. 11, 2011.
AFP


China's government has provided sketchy information on what appears to be a significant setback in its energy and economic policies, experts say.

The country has been promoting energy efficiency, setting a five-year goal of reducing 16 percent of its energy use per unit of GDP by 2015 under the 12th Five-Year Plan.

The campaign to cut energy waste has been a key part of Premier Wen Jiabao's effort to change China's construction-led growth model by stressing sustainable development and pollution control.

But officials have yet to release any information on the "energy intensity" index so far this year, although quarterly reports were standard practice during the last five-year period ending in 2010.

The government issued economic and production results for the third quarter last week, but it has yet to publish energy efficiency data for the first quarter or the first half.

"You would have to imagine that if they don't report the numbers that something's going on that makes it unpleasant to report them," said Mikkal Herberg, energy security research director for the Seattle-based National Bureau for Asian Research.

In 2010, the first-half statistics were released in early August, suggesting the report this year is nearly three months late.

Philip Andrews-Speed, a fellow at the Transatlantic Academy of the German Marshall Fund of the United States, suggested the government may simply be taking longer for the sake of accuracy.

But he also concluded that the efficiency gains of the past five years have slowed or reversed.

"That trend has at least temporarily stopped," he said."Whether this is because of fundamental difficulties or whether it's because the government has more important things on the agenda remains to be seen."

Silent

The coal and power sectors have recorded double-digit growth, but the government has remained silent on the total rate of energy consumed in the economy.

Instead, it has given partial provincial results that point to problems in meeting its goals.

On Sept. 13, the National Development and Reform Commission (NDRC) ordered 10 of China's provinces to improve their performance after missing their targets in the first half, the official Xinhua news agency reported.

The provinces Jiangsu, Zhejiang, Jiangxi, Henan, Hainan, Gansu, Qinghai, Ningxia, Xinjiang and Inner Mongolia all used too much energy, the NDRC said.

In the worst case cited, Inner Mongolia consumed nearly 40 percent more energy in its industrial chemical sector than in the year-earlier period.

Although it did not report nationwide results, the NDRC indicated that consumption is too high to meet its 3.5- percent energy-saving target for this year.

In a separate report, the Ministry of Environmental Protection said on Oct. 2 that nitrogen oxide emissions rose 6.17 percent in the first half.

The government is trying to reduce the smog-causing pollutant from coal burning and car exhaust by 1.5 percent in 2011, the official English-language China Daily reported, but first-half growth has made the goal hard to achieve.

Part of the problem has been the spillover effect from 2010, when the government pulled out all the stops to meet Premier Wen's previous goal of cutting 20 percent of energy waste during the last five-year plan.

Under pressure from the target, many provinces withheld power from factories, homes and even hospitals until the end of the year, forcing industries to use more power in early 2011 to make up for lost production.

Offset

The energy binge may have been too great to offset with second-quarter results.

"Usually in those cases, the choice is to not publish the numbers until short-term imbalances go away and the numbers smooth out and you can have a better story to tell," Herberg said.

But Andrews-Speed said there have been few signs of the energy-saving campaign in 2011.

"They haven't done very well in the first six months of this year, probably because there are other economic priorities and possibly, with a new government due in a year or so, other political priorities," he said.

There are also signs that Wen has gotten little cooperation in meeting his economic restructuring goals.

"This points out how much of a struggle Beijing has in enforcing its writ in the provinces," Herberg said.

Much of China's energy consumption comes from construction-related industries like steel and cement, which supply real estate development. The government has tried to rein in the runaway sector by curbing bank loans and requiring more affordable housing.

But nine-month figures showed a 32-percent jump in property investment from a year-earlier, the National Bureau of Statistics (NBS) said last week. Residential housing development has soared 35.2 percent, driving energy use higher.

The government has made some headway in slowing economic expansion in hopes of cooling inflation. The NBS posted a 9.1-percent GDP growth rate in the third quarter and 9.4- percent rise for the first nine months, compared with 10.4 percent for all of 2010.

But slower growth may actually make it harder to show better efficiency numbers, since industries may use nearly as much energy to produce at lower rates, Herberg said.



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