June 05,2009

Again, China's Electric Consumption Does Not Support Official Growth Statistics

By CSC staff, Shanghai

China's power consumption in May continued to decline. Although the National Bureau of Statistics denied the conflict between economic growth and power consumption decline since the beginning of the year, Zhao Bingren, ex-chairman of China Electricity Regulatory Commission, expressed his doubt on economic statistics reported by some areas.

According to the figures from the State Grid, power generation in the last 11 days of May dropped 5.7% year on year, higher than the decline in the second 10 days of May, mainly because working days in the last 11 days of May this year are lower than that in the previous year, as the Dragon Boat Festival occurred at the end of May.

The power generation situation in Yunnan and the south of Hebei is apparently better than that in the rest of China, due to the increase in steel production in the south of Hebei and supportive policies towards high energy-consuming industries in Yunnan. However, power generation is still hovering at low levels in most areas with intensive high energy-consuming industries. In May, decrease in power consumption in Shanxi and Inner Mogolia stood at 5% to 6%, higher than the average level of the country.

Power consumption decrease in Guangdong, Shanghai, and Zhejiang reached about 10%, 13.6%, and 6.1%, all higher than the country's average.

"During January and May, electricity demand dropped about 4% year on year," revealed Zhao Guobao, vice director of the National Development and Reform Commission and director of the National Energy Administration. According to the research of the National Energy Administration, change in product structure and decrease in inventory of high energy-consuming products is an important reason for the conflict among energy consumption, electricity consumption, and GDP growth.

Zhao Bingren said statistics reported by some local governments representing drastic economic growth might not be true. "I visited two provinces, and think their statistics are not true. They can never make up two important figures: power consumption and transportation. "

Power consumption in Sichuan dropped 9.9% in the first quarter, but its economic growth in the same period reached 10.8%. The local government explained the economic growth is mainly led by the post-disaster reconstruction. "I don't know how the economy grows in this area," said Zhao Bingren.

Shao Bingren is now vice director of the Committee of Population, Resources and Environment of the NPC. He thinks the economic situation in China is not so optimistic. The government's investment has mainly flowed to state-owned enterprises and infrastructure construction, instead of the whole society. In the first quarter investment in non state-owned sectors dropped by 3.3%, and the investment decline in foreign-invested and private enterprises is even bigger.

The export situation has not been improved, and internal demand has not been well stimulated. Financing difficulties of many small and medium enterprises have not been solved. The employment situation is still severe.

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