Energy consumption keeps increasing along with rapid economic growth and although China over the last 20 years has successfully met half its energy needs through development and the other half through conservation, its energy conservation is still below the world average. On the whole, China's pattern of extensive economic development with high rates of growth, of energy consumption and of pollution remains unchanged.

Statistics reveal that energy consumption was 4.1 percent higher than that of the GDP in 2004, and there are severe coal and electricity shortages in many places resulting from multiplied investment in iron and steel, cement, electrolytic aluminum, and real estate.  

China's Medium and Long-Term Energy Development Program for 2004-2020 prioritizes energy conservation, and adjustment and optimization of the energy structure. The Law on Renewable Energy Development and Utilization, originally slated to become law after 2005, went to the NPC Standing Committee for approval in December 2004.

China's first Medium and Long-Term Energy Conservation Plan was published at the end of 2004. This lays down specific regulations for indices of energy consumption, covering thermal power generation, electricity supply and coal consumption, for major products. By 2010, these indices as a whole will reach or approach the international advanced level of the early 1990s. By 2016 the energy efficiency of important energy-consuming equipment, such as the coal-fueled industrial boiler, must reach or approach international advanced level. The indices of some automobiles, electro-motors and household appliances should also be up to the international advanced level by 2010.