A high-profile drafting group has prepared a new law of energy, which is expected to encourage conservation as China's development has become constrained because of a shortage of energy.
Analysts said the energy law will offer a legal foundation to set up a cabinet energy department to govern the thorny issue.
"My understanding is that the drafting of the law is a preparatory step to set up a central government department to supervise energy security and clean use," Zhang Jianyu, visiting fellow with the Public Management School of Tsinghua University told China Daily yesterday.
The office of the State Council Energy Leading Group, which headed the draft work, did not elaborate on the comments, but said the law will focus on basic principles of energy saving, cleaner utilization, security and energy trade with overseas partners.
Minister of National Development and Reform Commission Ma Kai is acting as head of the drafting group, which is scheduled to be finished within this year.
Zhang, also the Beijing office head of the US-based environment protection organization Environment Defence, said: "It seems that momentum is gathering that China should have an umbrella energy law, as China has already had specific laws."
Laws covering electricity, coal, oil and energy saving have been enforced for years, and the law of renewable energy has started to take effect this year.
"But my opinion is that since we have already had so many sub-laws, drafting an effective umbrella law without altering other existing laws is very difficult," Zhang said.
However, Zhang's judgement to set up an energy ministry, which has been heatedly discussed since 2003, was ruled out by several high-ranking cabinet officials. Zhang Guobao, vice-minister of the National Development and Reform Commission, said at a press conference last year that the State Council has been considering strengthening the newly established cabinet energy leading group, instead of setting up a new ministry.
Xu Dingming, deputy office director of the State Council Energy Leading Group, said the main purposes of the law are to ensure energy saving, environmental protection, and energy security in China.
The country's top authorities have set two goals for the next five years. The first is to double the per capita gross domestic product (GDP) in 2000 by 2010, and the other is to reduce energy costs per unit of GDP by 20 per cent.
Xu's office believed there is a tremendous potential for energy conservation in China, which should be beefed up with the energy law.
Energy consumption per unit of GDP in China is 2.4 times higher compared with the global average, 4.9 times higher than European Union countries, and 8.7 times higher than Japan.