China's Energy Strategy: Economic Structure, Technological Choices, and Energy Consumption

By Xiannuan Lin | Go to book overview

decrease the amount of intermediate energy used to deliver one unit of final goods and services. Because final-demand shifts alone would have caused China's energy consumption to grow at a much higher rate than it actually did from 1981 to 1987, production-technology changes must generate a sizable energy savings to offset the strong upward pressure on China's energy consumption. We will quantify these energy savings and identify their sources in the next chapter.


NOTES
1.
See chapter 2 for a detailed discussion of the structure of energy consumption in China's economy.
2.
We exclude energy products from the table because energy outputs are measured in physical units, which makes their energy intensities incomparable with the intensities of nonenergy products. If we measure energy output in RMB value terms, energy products have a level of total energy requirements that is similar to that of many heavy-industry products.
3.
The mix changes in table 4.6 are for illustration only. We actually conduct the analysis at an eighteen-sector industrial disaggregation.
4.
This was the result of the gradual elimination of food rationing and the increased availability of agricultural products on the free market.
5.
As we would expect, this mechanism caused high inflation in 1987 and 1988, which led to the introduction of an austerity program in 1989-1990.
6.
Tracking the effect of imports on China's energy use is a difficult task because energy requirements of imported products may be very different in China and in foreign countries and because some of the import goods may not be available domestically. Our estimation of energy savings from imports is a rough approximation based on the energy that would have been used if the imported products had been produced domestically by the same or a similar industry.
7.
Despite several rounds of devaluation, the RMB was still overvalued during the 1981-1987 period. One obvious piece of evidence was that foreign currencies commanded a much higher value on the black market than that implied by the official exchange rate.
8.
Imports are entered into the final demand portion of an input-output account with negative values.
9.
See the next section, "Direct versus Intermediate Energy Use," for more details on China's residential energy use.
10.
In this research, hydropower is considered as an intermediate input to electricity generation and does not contribute to direct energy consumption as we define it here.

-94-

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China's Energy Strategy: Economic Structure, Technological Choices, and Energy Consumption
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Tables and Figures ix
  • Preface xv
  • 1 - Introduction 1
  • Notes 11
  • 2 - Energy in China's Economy, 1981 and 1987 13
  • Notes 36
  • 3 - Accounting for Energy-Use Changes: A Structural Decomposition Analysis 39
  • Notes 94
  • 5 - Energy Effects of Production-Technology Changes 95
  • Notes 126
  • 6 - Energy Conservation in Action: A Case Study of the Iron and Steel Industry 129
  • Conclusion 158
  • Notes 161
  • 7 - Summary and Conclusion 163
  • APPENDICES 173
  • Bibliography 185
  • Index 199
  • About the Author 204
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