Special Report: Global Financial Crisis
BEIJING, Dec. 12 (Xinhua) -- As the global financial crisis strains China's economy, slowed growth has taught the government a good lesson about environmentally-friendly practices.
China's rise in the past decade to become the world's fourth largest economy relied on high input, high energy consumption and high capital accumulation, resulting in negative effects on its sustainable and stable growth.
"The global financial crisis has exposed the problems rooted in country's economic growth," said Li Shengping, head of the development and reform bureau in Luoyang City of central Henan Province.
Companies that were heavy polluters are more vulnerable to the crisis while those with advanced environmentally-friendly technologies have become more competitive, according to Li.
In Changzhi City of west China's Shanxi Province, 160 companies have shut down since October because of higher overhead and product price decrease. All of these companies were engaged in high energy-consumption and high-pollution, including industries such as steel and calcium carbide manufacturing.
The companies, if not already closed by a nationwide campaign to eliminate outmoded business practices, will eventually be pulled out of the market for lack of competitiveness, industry analysts said.
Conversely, the Maanshan Iron and Steel Co. was noted for its strong resistance against the cold snap of financial crisis.
The company introduced a production line for train wheel last month, which became big news when most steel mills were cutting production.
The boom was a result of huge investments in energy-saving projects that helped cut costs, said general manager Su Jiangang.
Through waste-heat recovery, the company can generate 100 million kilowatt hours annually, or 60 percent of the demand. This saves the company 40 million yuan (5.8 million USD) each year. The use of an advanced energy-control system would cut more than 100 million yuan from the company's annual budget.
"Emission reduction and energy saving is not only an issue of environmental protection, but important to a company's profitability, especially when the financial crisis deteriorates the economic situation," said Gu Zhanggen, the Party secretary of the company.
Energy-saving measures also benefited small-businessmen like Deng Licui.
Deng owns a goose farm in Weiwu County of central Anhui Province. Her goose farm encountered its worst financial situation in more than 10 years when goose feather prices decreased drastically amid slackening demand.
Deng cut costs by installing methane generators on her farm. This saved her more than 10,000 yuan in electricity costs per month.
"A good earning is depends on the market, but cutting costs is one's own decision", Deng said.
Although the financial crisis has cast shadows on the economy, it provides a good opportunity for both China and the world to accelerate the transition toward economic sustainability, according to Xie Zhenhua, deputy director of the National Development and Reform Commission.
As the world's second-largest energy consumer, the Chinese government has set a target to reduce energy consumption per unit of gross domestic product (GDP) by 20 percent and major pollutant emissions by 10 percent from the 2005 levels by 2010.
Meeting the five-year energy efficiency target is crucial to re-balance the economy, but only around a quarter of the planned reduction was completed by the end of 2007.
Scholars have said that to break out of the vicious circle of an unsustainable system, China must increase investment on technology innovation and shift its reliance on fossil energy to clean energy sources such as wind power, bio-energy and solar power.
The opportunity came from the country's 4-trillion-yuan economic stimulus package, which aimed to spur economic growth by boosting domestic demand.
According to the package, 510 billion yuan would go toward technology innovation, industrial structure adjustment and environmental protection.
Of the 100 billion yuan added to the fourth quarter central budget, 3 billion yuan was allocated for rural methane projects.
Experts believed by developing new energy, the rural communities -- which comprise the majority of China's population -- could contribute to the transition to a more environmentally-friendly development.
According to the Ministry of Agriculture, by the end of 2007, 26.5 million rural households were installed with methane generating pits. These devices generate 10.2 billion cubic meters of methane, equivalent to 16 billion kilograms of coal.
Besides increasing investment, the Chinese government is enhancing supervision amid concerns that some local governments or companies might use the financial crisis as an excuse to shirk from environment protection efforts as well as emission reduction and energy-saving measures.