Chinese Premier Wen Jiabao said on Friday that the current macro-control policy must focus on energy conservation and emission reduction in order to develop the economy while protecting the environment.

"The challenge of reducing energy consumption and greenhouse gas emissions has proved arduous as China's economy grew 11.1 percent in the first quarter but power consumption surged 14.9 percent," said Wen.

"This is a crucial year for China in its efforts to meet the energy saving and emission reduction target set for the 2006-10 period," said Wen.

The Chinese government has set a target of reducing energy consumption for every 10,000 yuan (1,298 U.S. dollars) of GDP by 20 percent by 2010, while pollutant discharge should drop by 10 percent.

But energy consumption fell only 1.23 percent last year, well short of the annual goal of four percent.

"To reverse the situation, local governments must no longer regard the target as a flexible one, but an imperative", said Cai Zhizhou, a researcher at the China Center for National Accounting and Economic Growth, Beijing University.

"To curb excessive growth of the sectors that consume too much energy and cause serious pollution, China must tighten land use and credit supply and set stricter market access and environmental standards for new projects," said Wen.

"Restrictions should be imposed on exports in these sectors as soon as possible," he added.

"Outmoded production methods must be eliminated at a faster pace and how this policy is implemented by local governments and enterprises will be open to the public and subject to social supervision," he said.

"The ten nationwide energy saving programs, such as developing oil alternatives, upgrading coal-fired boilers and saving energy indoors, will save China 240 million tons of coal equivalent during the 2006-10 period, including 50 million tons this year," said Wen.

The Chinese government will advance reforms in the pricing of natural gas, water and other resources, raise the tax levied on pollutant discharge, establish a "polluter pays" system and severely punish those who violate the environmental protection laws, said Wen.

"Without faster restructuring and an efficient method of economic growth, China's natural resources and the environment will not be able to sustain its economic development," said Wen.

"We have no choice but to develop in an economical, clean and safe way," he said.