Planner urges China to cool growth and cut energy usage

CHINA should take measures to cool economic growth and cut energy consumption, an official with the National Development and Reform Commission said.

"Current economic growth, 11.5 percent or above 11 percent, is too fast and at too high a cost," Han Yongwen, the planning agency's secretary general, said at a conference in Beijing on Saturday. The world's fourth largest economy grew by more than 11 percent through the first three quarters of 2007, Bloomberg News said.

Chinese government is trying to cool growth in the world's fastest-growing major economy without triggering a sudden slowdown that may cost jobs and leave factories idle. Japanese companies including Toyota Motor Corp urged China in September to slow the pace of its expansion on concern overheating in Japan's biggest trading partner may cause economic turmoil.

"The central bank should use interest rate policies more boldly to damp investment expansion and asset price increases," Lin Yifu, head of China Center for Economic Research at Peking University said.

The central bank has asked commercial lenders to set aside more reserves on 10 occasions this year, to curb loan growth that fuels economic expansion. The bank raised companies' borrowing costs to a nine-year high last week, the sixth such attempt this year to cool lending and inflation.

Fixed-asset investment climbed 26.8 percent in the first 11 months of 2007. Inflation surged to an 11-year high of 6.9 percent in November.

The People's Bank of China will further tighten macroeconomic controls in 2008 and take "forceful measures" to control liquidity, the central bank said last Friday after a quarterly monetary policy meeting.

Chinese leaders this month named economic overheating and surging inflation as the two key risks to the economy in 2008. The government also wants to curb the amount of energy used in each unit of gross domestic product by 20 percent in the five years ending in 2010.

"The government should curb economic growth within a reasonable range that is compatible with energy and resource supply and without causing more imbalance," Han said, citing the nation's consumption of 15 percent of the world's energy, 30 percent of steel and 54 percent of cement in 2006.