China's energy saving potential from the perspective of energy efficiency advantages of foreign-invested enterprises

- A new input-output table distinguishing firm ownership and trade mode is employed.
- The foreign-invested enterprises are 5%-35% energy efficient than Chinese enterprises in 2007.
- China could save 20.3% of energy use if industrial COEs could duplicate the technologies of FIEs.

The paper investigates the energy saving potential associated with firm ownership-related differences in energy efficiency such as those between domestically and foreign-owned firms. Because of a gap in official statistics this topic has barely been touched upon in the scholarly literature. This paper employs a new energy input-output table that distinguishes firm ownership (Chinese owned enterprises, COEs; and foreign-invested enterprises, FIEs) and trade mode (export processing and normal goods production) to analyze the energy efficiency advantage of FIEs in China in 2007. The results show that the total energy intensities of COEs in the industrial sector are generally 5%-35% higher than that of FIEs across industry groups. At an aggregate level, China could save up to 20.3% of its energy use, if industrial COEs could duplicate the energy use efficiency and production technology of FIEs. This gain would require major technology upgrades among COEs.