Retrospective and prospective decomposition analysis of Chinese manufacturing energy use and policy implications

The forward looking (prospective) decomposition analyses are conducted for three different scenarios. The scenario analysis indicates that if China wants to realize structural change in the manufacturing sector by shifting from energy-intensive and polluting industries to less energy-intensive industries, the value added average annual growth rates (AAGRs) to 2015 and 2020 should be more in line with those shown in scenario 3. The assumed value added AAGRs for scenario 3 are relatively realistic and are informed by possible growth that is foreseen for each subsector.