Because of the recent rise of oil price, many Chinese have postponed or even canceled their plan to purchase a car, and for the same reason, the production costs of machinery and iron and steel sectors also underwent a rocketing growth.

The latest statistics from China's National Bureau of Statistics showed that China altogether produced 1.603 billion tons of standard coal last year, up 11 percent over the previous year, but energy supply was still insufficient.

From January to April this year, 24 provinces in China were forced to impose restrictions on electricity supply, and during the first quarter of the year, China had to imported 30 million tons of crude oil, which led to eight billion US dollars trade deficit.

It is a signal of the current imbalance of resource distribution in China, and furthermore, an implication that energy issue has become a major challenge to China's economic growth prospect, analysts said.

They warned that, the energy issue, in the latter half of 2004,would become a problem in almost every industrial sector, and China's eastern parts, where most of the country's heavy industrial enterprises are located, would suffer from the shortage most.

Xu Dingming, head of the energy bureau with China Development and Reform Commission, told Xinhua that the energy issue in China is no longer a demand-and-supply shortage now, and it is a matter of how to raise the energy utilization efficiency.

China has suffered poor energy utilization efficiency for a long time under the planned economy, Xu explained.

To solve the problem, Xu said, China has to take comprehensive measures, noting that energy infrastructure construction should be strengthened and energy utilization management should also be optimized.

(Xinhua News Agency June 19, 2004)