The finance committee of the National People's Congress Standing Committee is expected to amend the PRC Conservation of Energy Law by the end of 2006, amid concerns that China's goal of reducing energy consumption per unit of gross domestic product (GDP) by 4% risks failure in 2006.

China's plans to cut energy consumption is at serious risk of not being met due to increased energy demands, which are required to fuel investment in the mainland's growing property and automotive sectors. Currently, China's energy consumption efficiency is only one-quarter of Japan's and about 50% of the US' level. Fu Chenya, president of the China National Offshore Oil Corporation, says if China can achieve energy efficiency at levels similar to Japan's and the US', China will be able maintain its economic growth rate and consume the same amount of energy over the next decade.

The amendment will focus on clarifying the enforcement, supervision and incentives for energy saving. Local officials will be held accountable for not meeting energy-saving targets and will be prevented from approving new projects that fail to meet energy-saving standards.

The current law, promulgated in 1997, mainly covers the manufacturing sector, while the amendment is expected to extend coverage to include civil buildings, transportation, government agents and utilities.