In the context of rapid economic growth in China, energy has consistently been a major constraint on long-term economic development. Despite maintaining robust economic expansion, the inefficiencies and environmental costs associated with an extensive growth model have become increasingly evident, prompting government intervention. The Chinese government has emphasized the need to control high-energy consumption and pollution by phasing out outdated production capacity and revising export policies. As industries have expanded rapidly, energy conservation and emission reduction have emerged as central pillars of macroeconomic regulation.
Under the "Eleventh Five-Year Plan," the Chinese government set a target to reduce energy consumption per unit of GDP by 20% between 2006 and 2010. In response, the National Development and Reform Commission issued directives to strictly regulate sectors such as steel, electrolytic aluminum, and copper. It also imposed restrictions on new high-energy projects in overcapacity industries like smelting, ferroalloys, and cement. A nationwide campaign was launched to clean up polluting and energy-intensive industries, while the People's Bank of China introduced guidelines urging financial institutions to tighten credit controls for high-pollution sectors.
According to data from the National Bureau of Statistics, energy consumption per unit of GDP dropped by 2.78% in the first half of 2007 compared to the same period the previous year. However, this rate still fell short of the government’s targets. Meanwhile, power consumption per unit of GDP increased by 3.64%, highlighting ongoing challenges in achieving energy efficiency goals.
China aimed to cut energy use per unit of GDP by 4% in 2007, but this goal was not met. In response, the country intensified its efforts to improve energy efficiency. The National Development and Reform Commission announced a total of RMB 21.3 billion allocated for energy saving and emission reduction this year, with RMB 9 billion dedicated to key energy-saving projects and enhancing management capabilities. These initiatives include thermal energy recovery, building insulation improvements, and upgrading coal-fired furnace efficiency.
Alongside these efforts, China’s energy companies are actively exploring new energy sources. Major oil and gas projects are managed by CNPC and Sinopec, but technical limitations and challenging terrains have led to reliance on foreign expertise. Recently, Chevron Corp. won the bid for a sour gas project in Sichuan, beating competitors like Statoil, Total, and Shell. Additionally, China is inviting foreign firms to participate in bidding for 12 gas fields in the Tarim Basin.
To reduce dependence on coal and crude oil, China is expanding nuclear power generation. Westinghouse Electric recently signed a contract to build four nuclear reactors in Zhejiang and Shandong provinces, with the first reactor expected to be completed by mid-2013. The project, now under Toshiba’s ownership, aims to significantly boost China’s nuclear capacity, targeting 40 million kilowatts by 2020—up from 7 million in 2005.
In parallel, China is promoting clean energy. The Ministry of Commerce announced the construction of the largest concentrating photovoltaic solar power plant in Xichang, Sichuan, with a capacity of 10 MW and an investment of RMB 60 million. This project, expected to finish in 2009, reflects China’s commitment to renewable energy. Concentrating photovoltaics, which boasts over 35% efficiency, is a promising technology. China aims to raise the share of clean energy in its total energy mix to 16% by 2020, supported by policies that prioritize solar, wind, and ocean power over coal.
Energy conservation and emission reduction remain central to China’s economic strategy. While progress has been made, the country still needs to intensify efforts to curb high-energy industries and accelerate the transition to clean energy. Addressing energy waste is essential for meeting sustainability goals and mitigating environmental degradation. By investing in innovation and international collaboration, China is working toward a more balanced and sustainable energy future.
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