New pilot projects in specific sectors such as coal and chemical production are being designed to develop a greener economy.

The government-sponsored projects of the so-called "circular economy" are ultimately aimed at eliminating emissions by making more efficient use of resources.

The National Development and Reform Commission said on Wednesday it will develop a national campaign to promote a circular economy, a concept put forth by a US economist in the 1960s.

Pilot projects are also planned in other sectors such as electricity generation, building materials and recycling of household appliances.

A circular economy that recycles materials can take better advantage of resources and energy, minimize waste discharge, and reach a harmonious interaction between society, the economy and the environment.

Motivated by the country's resource shortage and the ongoing investing spree, the commission's Minister Ma Kai said last year that China's economic development this year will focus on conserving resources.

The measures on circular economy are seen as a step to turn Ma's words into action.

Given the current economic development trend in China, the gross domestic product (GDP) will undoubtedly quadruple by 2020.

To sustain such an economic miracle, an average annual growth rate of 8 percent is critical, along with the necessary resources to support the growth.

Aside from other problems along the bumpy road to prosperity, insufficient resources can be the single most dangerous threat to an otherwise rosy scenario, according to the commission.

Experts said the circular economy is an ideal development model but more incentives are needed to realize the model.

"Basically, a circular economy will not work unless there are clear incentives and responsibilities," said Zhang Jianyu, a visiting scholar with Tsinghua University.

The commission said China is only now starting to develop a circular, more environmentally friendly economy.

Policies, laws and regulations on issues like recycling home appliances and construction materials should be put in place and recycling systems should be set up as soon as possible, said the commission.

In recent years, China has taken considerable strides in environmental protection.

In 2002, the country passed a law promoting clean production methods.

Many provinces and cities have also instituted local regulations supporting clean production.

R.C. Lao, a Chinese Canadian working as an environmental expert with the State Council, said the government is busy mapping out standards for the circular economy.

"The standards will detail upper limits of energy and resource consumption for all sectors," said Lao, also the resident project manager of the Canada-China Project on Cleaner Production.

(China Daily July 23, 2004)