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Chinanews, Beijing, May. 8 – Last month, the State Development and Reform Commission (SDRC) issued a set of data on economic operation for the first quarter of the year. According to the data, high energy-consumption industries gained momentum1 of development, while the proportion of the service industry, which consumes less energy, in China's GDP kept declining for three years consecutively2.
Statistics show that in 2006, the service industry accounted for 39.5% of the national GDP, which was 1.2 percentage points less than 2004, and 0.4 percentage point less than 2005. At the same time, development of six high energy-consumption industries, including steel and nonferrous metal, increased by 20.6% in the first quarter compared with the same period last year. In many places, local governments remain unaware3 of the importance of developing the service industry. Many local governments pay high attention to developing the secondary industry. Industrial sector4, especially heavy industry, has been overdeveloped, said Xia Nong, deputy director of the Policy Making Department under SDRC. It is estimated that every percentage point growth in the service industry will consume one-fifth of the amount of energy for related growth in the secondary industry. If the proportion of the service industry to GDP can be raised by one percentage point, while the proportion of value-added industry can be reduced by 1 percentage point, then the amount of energy consumption for every 10,000 yuan of GDP can be reduced by 1 percentage point. China should raise the proportion of the service industry in the country’s industrial structure and make it become the pillar industry in the national economy. This will be the only way for China to improve economic structure and transform economic growth mode, said Xia.
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