Energy, efficiency to be prioritized over next five years
China published detailed proposals Tuesday for economic and social development in the 13th Five-Year Plan (2016-20), following the conclusion on Thursday of the fifth plenum of the 18th Communist Party of China Central Committee.
The proposals, highlighting innovation, coordination, green development, opening up and efficiency, will serve as guidelines for the country's leaders in formulating economic and social development plans over the next five years.
As the last five-year plan before 2020 - the year in which China is supposed to achieve its goal of building a moderately prosperous society - the plan has gained wide attention.
The proposals, which were published by the Xinhua News Agency, touched on a wide range of aspects, including calling for further reforms in the financial and energy sectors.
From the industry level, the proposals outlined the need to promote new-energy cars and reduce broadband connection costs, as well as fully unleashing the power of the Internet. Experts said the proposals also set up guidelines for furthering economic reforms, which will be important in realizing the goals for 2020.
The proposals called for more efforts in building a clean, safe, efficient and modern energy system and efforts to open up sectors such as oil, natural gas, electricity and transportation to private capital. It also called for improving the energy reserve system.
"Energy storage has existing rules and regulations. As the economic growth rate slows down, more time and energy can be diverted toward improving and perfecting the existing mechanisms," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times Tuesday.
The price slump in the oil and gas sector has reduced operational costs for many energy users, allowing them to focus on improvement of energy storage mechanisms, said Lin.
The 12th Five-Year Plan focused on increasing the scale of Chinese companies, and the bigger picture in the 13th Five-Year Plan is to improve their efficiency, Lin said, noting that opening certain sectors to private capital is also aimed at improving efficiency.
Experts said natural gas consumption is expected to rise at the expense of coal during the next five years, as China moves toward a greener energy consumption model.
China was the world's largest energy consumer in 2014, with coal accounting for 66.03 percent of the country's primary energy consumption, according to the BP Statistical Review of World Energy 2015 released in June.
The BP Energy Outlook 2035, released in February, estimated that by 2035 China's natural gas consumption will double from its levels in 2014, when it accounted for less than 6 percent of total consumption.
"To build a greener economy, the country could encourage steps to introduce more gas-powered vehicles, in particular trucks in the logistics industry, to give a boost to the economy and reduce pollution," an industry insider, who declined to be named, told the Global Times Tuesday.
A less positive trend that should be noted is that some gas consuming businesses are retreating back to carbon fuel and hydrocarbons, due to the need to lower their operational costs amid the slowdown in the economy, the insider said.
Natural gas is cheaper than electricity but more expensive than coal and oil, he said.
The proposals also called for greater reform in the financial sector and loosened controls on foreign exchange.
"The focus for deepening reform in the next five years will be on increasing the efficiency and quality of the services offered by the financial industry to the real economy," Xu Hongcai, director of the Economic Research Department under the China Center for International Economic Exchanges, told the Global Times Tuesday.
Market-oriented interest rate reform, exchange rate reform and capital account liberalization are all aimed at better allocation of financial resources and allowing the market to play a more decisive role, Xu said.
