| China’s Energy Consumption and The Idea of an Energy Efficient Society [1] |
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| Written by Wang Jian | |
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Page 1 of 8 In the 1980s and 1990s, China's energy consumption elasticity averaged 0.4. That is, for every one percent of GDP growth, the energy consumption increased by 0.4 percent. Based on this number, the government made the assumption, in its long-term development strategy, that China's energy consumption elasticity would reach 0.5 by the year 2020. However, China's energy consumption growth in the past few years has far exceeded the economic growth rate. In fact, the energy consumption elasticity in 2003 and 2004 surged to 1.32 and 1.6, respectively. This demonstrates that China has entered the era of Heavy Manufacturing. China's Energy Consumption Structure Is Showing a Trend of Reversal In the early 1990s, light industry and heavy industry products were virtually equal in terms of total industrial output. By the end of last year, the percentage of heavy industry products rose to 67.5 percent. That figure climbed to 69 percent in the first seven months of this year. Because the energy consumption in heavy industries is generally four times that of light industries, China's transition into the stage of heavy manufacturing will inevitably lead to higher energy consumption, a common characteristic shared by industrialized nations when entering the same stage. When industrialized nations enter the heavy-manufacturing stage, energy consumption is more dependent on oil and natural gas than on coal. Oil and natural gas, called clean energy resources, generate more heating value while producing less harmful gas. Thus, despite accelerated energy consumption, nations using clean energy resources cause significantly less environmental damage despite accelerated energy consumption. However, the same shift in its energy consumption has not occurred during China's industrialization. As a matter of fact, the percentage of oil consumption in relation to overall energy consumption decreased from 24.6 percent in 1999 to 22.7 percent in 2004. Despite the 15.7 percent of annual growth in crude oil imports since 2000, with a record 120 million metric tons imported last year, oil usage in relation to overall energy consumption dropped because of a slowing in the growth of domestic oil production. Is this reversal of the pattern of energy consumption temporary or is it an indication of a long-term trend? My answer is the latter, because two major factors limit China's long-term shift to oil-based energy consumption. The first factor is the unavailability of world energy resources. China is short of oil resources. It has been predicted that China's maximum annual oil production is 200 million metric tons. Compared to China, the oil consumption per capita in many industrialized nations is far greater. In the United States, per capita oil consumption is 28 barrels. That number is 17 in Japan or Korea. In contrast, China's per capita oil consumption is 1.7 barrels, one sixteenth of the United States, and one tenth of Japan or Korea. |