The Empirical Analysis Of China’s Energy Consumptionand Economic Growth

Energy is a very important input factor in the modern economic, andthe relationship between energy consumption and economic growth hasbecome very close. To maintain a steady economic growth, energysecurity is very important. Furthermore energy is scarce and the conceptof energy saving and environmental protection is becoming more andmore popular. How to control the energy consumption and energyintensity is very important. This paper will analyze the relationshipbetween energy consumption and economic growth in China, and thereason why Chinese energy intensity changes. And then I makesuggestion to china’s energy strategy.This article will be divided into four parts. The first part of this paperbriefly states the concept of energy consumption and economic growth,and I lay a theoretical foundation for further analysis. A brief introductionto some of the classic method of energy economics literature will also bedemonstrated to broaden the view of the study.The second part of this article will establish the vector errorcorrection model to analyze China’s economic and energy consumption data. Empirical analysis proved that there exits correlation between twoseries, and an one-way causal relationship from energy consumption tothe economic development.The third part use LMDI factors decomposition methods to analyzethe reasons for the decline of Chinese industry energy intensity throughthe perspective of industrial structure. The technical effect is the mainreason for the decline in energy intensity in China. Then shows the topten technical effect contributors in the secondary industry as well as thereason why the energy intensity drops from the policy view.The fourth section presents the energy problems we face recently andthe experience of developed countries. And make the suggestion onChina’s future energy strategy.