China can gradually lift the energy subsidies, and let the energy price go up to the global level to make the whole economy more energy efficient, Nobel Laureate Andrew Michael Spence told Xinhua in an exclusive interview on Thursday on the sideline of the first Global Economic Symposium (GES) being held in Ploen, Germany.

Spence said "many countries have energy subsidies, including China, but these are in the process of disappearing." He thinks this is a good phenomenon for subsides make people produce inefficiently and it's a quite "expensive" thing that a lot of poor countries can not afford.

Although China can afford the subsidies, "it's still a bad idea", he said, China should gradually lift the energy subsidies and let the energy prices go up to the global levels over time, so that both companies and people may naturally make more efficient decisions.

He thinks this will help a lot on energy consumption and energy saving technology improvement for China. Spence also pointed out as a country China is a big energy consumer, but per capita is still low as China has 1.3 billion people, comparing things on per capita is more reasonable.

Spence stressed at the same time that lifting the energy subsidies should not be done in a hurry. It must be done in a "pretty careful" way and according to the specific situation in China to avoid conflicts among people, especially for "those poor people in the rural areas," he said, adding that some kind of "compensations" can be given to them when lifting the subsidies.

He was also quite confident about the abilities of Chinese government running the economy and praised that Chinese government has put improving energy efficiency as one of its priority and try to improve the air and water quality which all help prevent global warming.

Andrew Michael Spence, 64, an American-born, Canadian-raised economist, was awarded the 2001 Nobel Memorial Prize in Economic Sciences, along with George A. Akerlof and Joseph E. Stiglitz, for their work on the dynamics of information flows and market development.

The first GES opened in Ploen Castle, Schleswig-Holstein, Germany on Wednesday, aiming to formulate concrete solutions to tackle global economic problems. It attracted about 300 experts or leaders in the circles of politics, business and academics, including four Nobel laureates and former German Chancellor Helmut Schmidt.

(Xinhua News Agency September 5, 2008)