Wang Mengkui

While China has many favorable conditions for sustained rapid economic growth, it also has many contradictions and difficulties in this respect. Realizing industrialization and modernization involves the consumption of large amount of resources. For this reason, breaking through the resource constraints is a vital issue the country cannot avoid.

The true facts we are facing are: On the one hand, China’s per capita possession of resources is relatively low and the country is precisely in the middle period of industrialization which consumes lots of resources. The demand for resources will increase further with the rapid progress in industrialization and urbanization, with the fast growth of urban and rural construction and with the continuous expansion of the scale of the economy. On the other hand, the extensive mode of growth, the irrational structure of the economy, the growing intensity of resource consumption and the serious wastes in various areas of social production and life have aggravated the shortages in resource supply.

China pursues a principle that emphasizes both resource development and resource conservation and gives a greater priority to resource conservation. It has made tangible achievements in reducing the consumption of resources. During the 22 years from 1980 to 2002, the energy consumption for per 10,000-yuan GDP at the constant prices dropped 66.8 percent from 14.34 tons of standard coal to 4.76 tons. Power consumption declined 22.7 percent from 7,200 KWs to 5,200 KWs. From 1971 to 1999, the energy consumption for unit added value at the international purchasing power parity fell 68 percent, while the average decline during the same period was 27.7 percent for the whole world, and 11.2 percent and 32.3 percent respectively for European and Asian countries. From the international perspective, China’s progress in recourse conservation is remarkable.

However, this progress is made on the base numbers of extremely high resource consumption characterized with the country’s highly extensive mode of growth in the past. In terms of the intensity of resource consumption, China still has a long way to go in catching up with the world’s advanced levels. China’s average levels of unit energy consumption in the eight sectors, including iron and steel, nonferrous metals, power generation and the chemical industry, are more than 40 percent higher. The rates of industrial water re-use are 15-25 percentage points lower. The overall rates of mineral resources recovery are 20 percentage points lower. The energy consumption for per unit heating is 2-3 times higher than in the developed countries that have similar climatic conditions. While energy supply grows sharply, it still cannot meet the demand. In recent years, the intensity of resource consumption has been on the rise, and so has the elasticity coefficient for energy. This is an indication that the cost of economic growth has increased. We have paid high costs in terms of resources and environmental soundness for our rapid economic growth. Nowadays, resources such as farmland, freshwater, energy and minerals have become serious constraints to economic development. If we do not adopt a new approach, we would find it hard to carry on even now, let alone to strive for sustainable development and modernization.

We have two roads ahead of us. One is to continue the traditional road of industrialization characterized with high resource consumption and serious environmental pollution. The other is to take a new path of industrialization characterized with low resource consumption and less environmental pollution and build a resource-saving society. Clearly, the first road is impassable and too costly. We have no other choice except the second one.

This is not an expedient solution to resource shortage. It is a major strategy of vital importance to the future of our country. In essence, it is a question of choosing the most effective road to modernization for China. In other words, resource conservation should become an important component of the Chinese-style of modernization. As one of our basic national policies, we must pursue the road of rational and sustainable development.

This road is by no means an easy one. Everyday, while we see many encouraging developments, we are also frightened at resource shortages and wastes. It is inappropriate to overestimate the progress we have made in resource conservation, because the tasks ahead are formidable and require efforts in many areas:

--Develop a resource-effective mode of economic growth. Industrial restructuring must emphasize a higher level and a greater proportion of the service industry in the national economy. The service industry is noted for less resource consumption and can help improve the efficiency of the whole economy. In transforming and developing the secondary and tertiary industries, reducing resource consumption should become a primary target. In keeping with the principles of quantitative reduction, reutilization and resource conservation, great efforts should be made to develop a circulating economy and to intensify the integrated use of resources and the recycling and utilization of renewable resources so that land, water, energy and mineral resources can be utilized fully and efficiently.

--Actively adopt new technologies. Modernization is based on technological advancement. More efficient use of resources and discovery of new resources also depend on scientific and technological progress. In particular, turning the population pressure into a human resource advantage cannot be realized without better education and more advanced science and technology. Therefore, it is imperative to vigorously develop high and new technologies that can play major catalytic roles in social and economic development, and to properly handle the relationship between capital- and technology-intensive industries and our present labor-intensive industries. Labor-intensive industries and products should also increase their technological contents. The processes and products noted for high resource consumption, heavy environmental pollution and outdated technologies should be eliminated through mandatory procedures.

--Remove the deep-rooted system origin of the waste of resources and the extensive mode of growth. The failure of market prices to reflect real costs has caused a serious waste of water and energy. The irrational structure of investment leads to a blind expansion of construction scale. The tax calculation based on actual output instead of extractible reserves is a direct cause of the excessively low recovery rate of coal resources. The faulty land expropriation system, coupled with a land policy of low or zero prices, has drastically reduced the acreage of farmland. The loose social regulations on quality, material consumption and environmental protection and the faulty performance evaluation methods are also causes of the extensive mode of economic growth and the waste of resources. Therefore, providing system and policy guarantees for resource conservation should become amajor thrust of the reforms in the next phase.

--Strengthen legislation. A law to promote a circulating economy should be enacted as early as possible. In the meantime, conservation should be added to the contents of the laws on land management, water, construction, power, coal and other resources. Land legislation should also be amended in light of practical conditions. Developed countries have many sound laws and regulations on resource conservation. For example, they set ceilings on one-time water use for toilet flushes and mandated that many commodities should have simple packaging or no packaging at all. In China, however, there have been no mandatory restrictions, except general calls on abandoning wasteful toilet water use and commodity over-packaging. Many regions even restrict the traffic of small-engine cars simply because these cars "do not look nice" or because they can overburden the roads. In fact, these regions are encouraging wasteful use of gasoline through administrative fiat.

--Nurture a resource-saving concept and mode of consumption in the whole society. Traditionally, the Chinese people advocate thrifty. However, an undesirable social trend, namely a mode of extravagant or even flaunty consumption, is fast developing today as a result of economic development and the emergence of a larger high-income class. This is not just a waste of resourcesbut harmful to the national spirit and threatens the country’s future. Persistent education should be carried out to let everybody know from their childhood that cherishing resources is a virtue and to let resource conservation and sustainable development become deep-rooted faiths. This education should become an important component of the spiritual civilization. In resource conservation, governments, enterprises and citizens all have a responsibility.

--Expand international cooperation in resource conservation and utilization. We should learn and draw on foreign systems, policies and management experience on resource conservation, introduce resource-effective equipment, technologies and processes, and encourage foreign businesses to invest in these related areas.

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