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Author: Source: Published time: April 25, 2011
On April 22, Wang Siqiang, deputy chief of the General Office of the National Energy Administration said that the economic growth in China is supported by many favorable conditions, the momentum driving the growth of energy supply and demand is still strong, and the trend of energy developing in a positive direction is unchanged.
At the Press Conference for the Q1 2011 National Energy and Economic Situation, Wang Siqiang said, the domestic economic situation in China has had a good start and seen steady growth in investments, consumption, and exports, with strong support from domestic demand; fiscal revenue has increased very fast and the driving force behind economic growth has shifted from policy stimulation to autonomous growth; central finance’s expenditure on livelihood projects has significantly grown, accounting for 2/3 of total fiscal expenditure and boosting the improvement of residential energy consumption structure and level.
“In general, there are many favorable conditions and positive elements for the development of energy in China in the second quarter and even the whole year, though it is still faced with a daunting challenge,’ said Wang, adding that, with the change to the national and international socioeconomic situations, some unstable and uncertain elements may emerge in energy development in the country.
According to Wang, the domestic challenges in China include obvious conflicts in the economy that have shown no alleviation, in addition to some persistent problems with the system and structure. Such conflicts are mainly fast hikes of prices and a strong expectation of inflation as well as the prices of energy and raw materials in China rising with the strong hikes of international commodities prices, which channels pressure to the downstream. In March, the CPI in China rose by 5.4% while the PPI went up by 7.3%.
Besides, the central government of China has, since early this year, stepped up its macroeconomic control policies. The New Eight National Measures and the implementing rules by various local governments have been announced, which will dampen the growth of investments in the real-estate market; the People’s Bank of China has hiked the RRR (reserve requirement ratio) and recently made upward adjustments of deposit and lending rates, which will raise the financing costs of enterprises and dampen energy consumption to some extent.
Internationally, the major developed economies are implementing monetary easing policies. As a result, global liquidity has increased massively, major currencies fluctuated, and the prices of commodities such as grain and petroleum in the international market have been rising, with the pressure of inflation expanded from the emerging markets to the developed markets. In addition, the unrest in West Asia and North Africa will push the prices of energy higher, producing a double impact on the growth of the world economy and inflation. Worse, the earthquake in Japan will seriously impact the Japanese economy in a short term, thus inevitably affecting the recovery of the world economy.
