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China to set up energy task force as planner warns of dire power shortage

China said it intends to set up a special task force to handle energy issues as its top economic planner painted a dire picture of the nation's desperate power shortages.

The government has decided to establish a "national leading group" to oversee the country's sprawling energy industry, the China Daily reported on its website.

"Saving energy should top the agenda of the government's leading office," Minister of Water Resources Wang Shucheng told the newspaper, highlighting how the economy has recently veered dangerously close to running out of fuel.

Ma Kai, the head of the National Development and Reform Commission, told journalists that China was under great pressure to moderate growth in order to eradicate energy bottlenecks.

"We must keep economic growth within a reasonable range, that is a range which the energy and natural resources can keep up with," he said.

Otherwise, he said, "it will be hard to maintain our relatively high, relatively fast rate of growth."

Economic growth in China reached an eight-year high of 9.5 percent in 2004, with the unwelcome side effect that two thirds of the country's provinces reported energy shortages.

At a briefing on the sidelines of the ongoing annual meeting of the National People's Congress, or parliament, Ma said frenetic economic growth was only one of the reasons why there was not enough energy to go around.

"We consume more energy than Japan, even with an economy that's only one third that of Japan's," he said. "Energy waste and low efficiency are indisputable facts."

He said all of society would have to help, urging a two-pronged strategy to tackle the country's energy problems.

"With the one hand we should adopt all measures to increase the power supply while ensuring production safety," he said. "With the other hand, we should conduct demand side management."

Despite the serious problems faced by the Chinese economy, he told the outside world not to worry.

"Energy demand is basically matched by domestic supply," he said. "China's oil imports only account for about six or seven percent of total global oil trade, so China's impact on price fluctuations is very limited."

Although a "leading group" on energy is now in the works, there are no immediate plans to set up a Cabinet-level energy ministry, according to the China Daily.

Calls have been growing in China for the establishment of a regular ministry to replace the current energy bureau under Ma's commission, which has a staff of only 20.

Critics insist the bureau has failed to reduce the shortages, especially a lack of electricity nationwide since mid 2003.

China set up a Ministry of Energy in 1988 but it was dissolved five years later because its administrative functions overlapped with other departments.

Wang, the minister of water resources, has long been calling for a full-fledged energy ministry, the China Daily said, and his views were echoed Monday by Zhang Jianyu, a visiting scholar with Beijing's Tsinghua University.

"The government's decision to set up a leading group is a major step forward but is far from enough," Zhang told the newspaper.

"The leading group is a temporary office and is still weak compared with the importance of the sector," he added.

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