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re: china reducing energy demand Changes are afoot in China - no longer open slather for uneconomic and environmentally unfriendly energy projects. Emphasis now on using energy for profit purposes, reducing pollution and sustainable development. Energy demand to slow to 7% rate from 10%. New coal technologies to reduce waste and make it cleaner. here are some quotes:

"There will be a structural move away from energy and natural resource intensive industries towards the services sectors and IT industries. This is why government is forecasting electricity demand to grow by an average of 7% a year over the next five years compared with 10% a year over the last five years. Perhaps it also implies an implicit slowdown in the growth of industrial production.
Natural resources, including energy, are now considered to be strategic; their use should not be frittered away on silly projects. Where products are exported, which have a high natural resource content, they will be discriminated against via taxes.
A start has been made by imposing a 10% tax on certain copper and copper alloy semis; we suspect that this will become much broader with consequences for global markets

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How much of a slowdown is difficult to forecast. But, in our view, real GDP will fall to under 8% this year and around 7% in 2007; manufacturing will be hit harder as so much of industry will be restructured and this sector accounted for 41% of GDP last year.

"China is undertaking research with W European companies to drastically reduce emissions from coal fired power stations. Furthermore, China's nuclear Pebble-Bed Reactor (PBR) will be capable of producing clean electricity. These plants are small enough to be assembled from mass-produced parts and cheap enough to be available in large numbers. They come with the ability of having no spent fuel rods and are meltdown proof.

China will no longer allow low-tech plants, which are environmentally unfriendly, to be built. This prohibition won't be effective immediately, but it will become totally effective over a five-year period. We will see this in basic industries such as steel, aluminum and copper, for instance.

Government is also starting to impose export taxes on goods that are energy and/or natural resource intensive. The recent 10% tax on the export of certain copper and copper alloy semis is a start.

"China's energy intensity has improved dramatically since the 1970s but is still well below international levels. Government is focusing on improving its use of energy with a goal of cutting it by 4% this year and by 20% in five years.

There are three basic ways of achieving this objective. The first is to do away with building surplus industrial capacity (see following section) and the second is to introduce modern technology in the use of energy. The third is to ban the export of products that are low-tech and are energy intensive. (see Thursday's export tax of 10% on certain copper and alloy products

" Electricity consumption is now forecast to rise by 7% a year over the next five years compared with an average of 10% a year over the last five years.

This slower rate of demand is a product of curbing investment in energy intensive sectors, such as steel and machinery and encouraging growth in the services sector and IT industries, which are not energy intensive. It may also be a product of a slower rate of growth in industrial production.